Greece calls for flexibility from banks during coronavirus crisis

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Greece urged banks on Thursday to do more to support individual and business borrowers who have been regularly servicing their loans to soften the blow of the coronavirus lockdown.

Finance Minister Christos Staikouras called for more flexibility from Greek banks, which have said they would offer individual borrowers hit by the coronavirus crisis a three-month freeze on loan repayments as part of relief efforts.

This move followed a decision to suspend loan repayments for businesses, meaning they would only need to pay interest and not repay any principal for six months.

“Banks ought to act with a greater degree of flexibility, as they have started to do, towards the direction we have agreed,” Staikouras said, citing the European Banking Authority’s (EBA) detailed guidance on how banks could help borrowers in need.

“(The EBA guidance) will facilitate banks’ decisions on their required effort to support borrowers with performing loans – businesses and households,” Staikouras said.

Greece has so far reported 821 confirmed cases of coronavirus, with 22 deaths. Authorities have closed restaurants, bars, shops, playgrounds, schools, shopping malls, universities and gyms to stem its spread.

The EBA, which postponed an EU-wide stress test to 2021 to allow banks “to prioritise operational continuity”, has asked supervisory authorities to make full use of flexibility in the regulatory framework to support the banking sector.

Greek banks have been working to reduce a pile of about 75 billion euros ($82.65 billion) of bad loans, the legacy of a 10-year financial crisis that shrank its economy by a quarter.

Sourced by: Reuters

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