Greece May Free Its Banks From $47 Billion of Bad Debt
- Central bank plan sees banks’ tax claim assets moving to SPV
- Special vehicle will issue bonds, use proceeds to buy bad debt
Photographer: Kostas Tsironis/Bloomberg
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Greece’s central bank is working on a plan to help banks cut their bad debts in half, the latest effort to restore trust in the country’s financial system, two people with knowledge of the matter said.
Under the proposal, Greek lenders would transfer about half of their deferred tax claims to a special purpose vehicle, which would then sell bonds and use the proceeds to buy some 42 billion euros ($47 billion) of bad loans from the lenders, according to the people. They asked not to be identified because the plan hasn’t been finalized yet.