Over the next few months, adequate instruments should be established for an orderly and swift debt resolution, while the European Commission should provide the necessary authorisation without undue delays, taking into account the probability of external, worldwide downside risks. It should be reminded that all Member States under financial stress have made use of similar systemic solutions, in the form of Asset Management Companies.
Greek banks have maintained satisfactory capital adequacy ratios and this has been extremely significant for financial stability considerations. Going forward, it will be up to each individual bank and their equity-holders to assess their business models and growth prospects. At present, legacy NPLs impose a major constraint upon Greek banks’ profitability.