EBRD: Greek Crisis Will Continue To Weigh In SE Europe
The increase of bad loans and the fragile economic recovery will keep credit growth flat in the biggest part of central Europe, while the southeast part of the continent affected for years to come as a result of Greece΄s debt crisis, the EBRD΄s senior economic aide said on Wednesday.
"There is one cross-cutting theme in the region and that is the high level of non-performing loans and the weakness of bank balance sheets," said Piroska Nagy, senior advisor to the chief economist at the European Bank for Reconstruction and Development, Reuters reports.
She noted that while economies in the region have by large stabilized, Western lenders active in central Europe remain preoccupied with repairing their balance sheets instead of accelerating loan growth.
"The priority is to support the clean-up of balance sheets, it΄s a bank job and should be market-driven," Nagy told the Reuters Central European Summit via videolink in London.
"There will be some further consolidation. Several big bank groups are undergoing restructuring. They are selecting core markets and they might divest from non-core markets," she said.
"Bank groups will identify non-core markets to withdraw, that should be welcome ... It will be a market-based solution using this coordination mechanism," she said, noting that there had been no tendency in the region to nationalize the banks.
(Capital.gr)
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EBDR=BERS