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As far as the return to the markets, Mr. Stournaras stressed that the first trial return to the markets took place in July 2017 with a five-year bond issue, while in November 2017 a bond exchange was conducted for an amount of €25.8 billion. Subsequently, after the completion of the third review, a seven-year bond issue was launched, as part of the government’s plan for Greece’s return to international markets before the end of the programme. This issue, which took place amid turbulence in international financial markets, was successful.
He added that however, episodes of turmoil such as the recent ones appear to have a greater impact on countries with poor credit ratings and a weaker economy. These countries saw the yields on their government bonds rise considerably. This suggests that, in the present uncertain conditions, the Greek State’s return to the markets, as necessary as it may be for a return to normality, must proceed with caution.
As far as the banking system is concerned the central banker said that “the effective management of NPEs is the most crucial legacy problem that banks now have to tackle, if they are to fully consolidate their loan portfolios and become capable of increasing their lending. To this end, the legal and regulatory framework has been strengthened, and banks have taken important action. Specifically, electronic platforms for out-of-court settlement of debts and e-auctions of real estate were launched; the authorisation framework for credit servicing firms was simplified; and the first sales of loan portfolios were conducted. Moreover, new legislation now protects bank officers involved in bad loan restructuring against criminal prosecution, and the rights of secured creditors have been enhanced. The progress achieved in removing the obstacles to the management of NPEs and, in particular, the impact on strategic defaulters’ behaviour from the launch of e-auctions was a main factor behind the favourable picture in the fourth quarter.