Bank of Greece’s Yannis Stournaras has issued a stern warning to banks over non-performing loan (NPLs) exposures.
On Monday a published interview with the Financial Times quotes Stournaras issuing a warning to banks who are unsuccessful at lowering their NPLs saying that they could face penalties.
“Banks must take the initiative. If banks don’t, then there is a problem,” Stournaras said, adding “But they will do so because we have targets for NPL (non-performing loans) reduction. If they don’t achieve the targets, then there are going to be penalties, both regulatory and administrative.”
Stournaras explained that this is something that must be done in order to keep Greece’s financial institutions afloat and bluntly stated that “…banks can force incumbent shareholders either to put more capital into their companies so these can pay back their debts or effectively step down.”
He also reassured that there have been new measures put into place to deal with implementing the repercussions of falling short in lowering NPLs.
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