Rather than see the banks limp on, crippled by non-performing loans that would both inhibit their ability to retain depositor funding and discourage any new lending, the government already stepped in at the beginning of 2009 to begin the portfolio restructuring of the system. The approach being adopted is comprehensive and transparent.
It is designed to remove the overhang of large hard-to-recover property loans from the books of the banks, freeing their management to concentrate on providing the credit and other services needed for the economic recovery. The banks are being recapitalized – by parents in the case of the foreign-owned banks, through market-sources, backed-up by injections of capital by government where necessary for the rest.