New credit system due this fall

The countdown for the streamlining of the local banking system through the lenders’ recapitalization has begun.

By the end of September, when the major challenge of recapitalization is expected to have been dealt with, the market will practically have an all-new banking system that will have rid itself of the excessive exposure to Greek state bonds and of the uncertainty generated by the loan portfolios and the business funding of companies that was debatable at best.

“As of fall 2012,” one bank official said, “we will be talking about a new credit system as the two main market worries -- bond exposure and loan portfolio quality -- will have received a definitive answer.”

Local banks estimate that the recapitalization will require about 30 billion euros, mostly to cover losses created by the private sector involvement plan’s debt swap program and the deterioration of their loan portfolios as calculated by US company BlackRock Solutions.

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