The new Bank of Greece governor Yannis Stournaras warned institutional investors that settling their bad debts poses a serious challenge to the Greek banks, while speaking at the 3rd Eurobank Investment Forum.

Stournaras did not miss the opportunity to refer to his achievements while being Greece’s Finance minister – up until June – asserting that positive developments nevertheless leave no room for complacency.

He also mentioned that reforms should be continued in order to achieve recovery and highlighted the danger that political instability creates for Greek economy.

In relation to his current role as Greece’s central banker, he stressed that dealing with the issue of bad loans falls under the following two requirements:

The first requirement is economy recovery and a decrease in unemployment rate, whereas the second requirement is to set in place a new “bad loans active management” practice on an individual bank framework, offering priority to the borrowers who are facing temporary financial problems.

According to Stournaras, this approach will help “unlock” funds for the financing of the Greek economy.

Nevertheless, he called on the banks to offer loans only to truly viable businesses and to encourage the development of business partnerships.