##4 ) ( 3. 145 ) ( 1. 041 ) 88. 955 84. 720 source : bank of greece. hence, despite the genuine effort on the part of greek commercial banks, more drastic solutions are needed in the foreseeable future with a handson approach. the speed up of efforts by both greek banks and authorities is more than essential for a rapid convergence of the domestic npl ratio to the european average. looking at the various strategies put forward for the effective resolution of the greek npl issue, from my point of view, securitisation schemes are probably the silver bullet for the greek npl problem. it ’ s an attractive, market - friendly idea because it converts bad quality assets to marketable securities, which could be of interest to a larger set of buyers, ` 12 including foreign institutional buyers. the advantage of securitization is that there is significant diversification of risk away from a single credit name, and with the issue of tranches, investors can choose the riskreward combination that best reflects their preferences. securitisation also generally achieves a lower average cost of funding and, if guarantees are provided to the securitised assets, can result in higher npl prices than direct sales. recently, two proposals are under discussion in order to address the issue of npls, one by the bank of greece and the other by the hfsf, which have both as a common ground, the ideas of securitisation and a systemic approach to the problem. they could be seen as complements, rather than substitutes. more analytically : the bank of greece ’ s proposal - main characteristics the proposed scheme envisages the transfer of a significant part of non performing exposures ( npes ) worth of around €40 billion along with part of the deferred tax credits ( dtcs ) worth of around €8 billion, which are booked on bank balance sheets, to a special purpose vehicle ( spv ). subsequently, legislation will be introduced enabling to turn the transferred deferred tax credit into an irrevocable claim of the spv on the greek state with a predetermined repayment schedule. to finance the transfer, the spv will proceed with a securitisation issue, comprising three classes of notes ( senior, mezzanine, and junior ). it is anticipated that private investors will absorb part of the upper class of securities ( senior ) and the vast majority of the intermediate part

george provopoulos : international financial turmoil and its impact on the greek economy key remarks by mr george provopoulos, governor of the bank of greece, at the meeting with the presidency and members of the hellenic federation of enterprises, athens, 14 july 2008. * * * the international financial system it will take some time until normality is fully restored... 1. the international financial turmoil, which began almost a year ago, is still ongoing and continues to affect financial markets and macroeconomic aggregates. extreme situations have been avoided, thanks to the action taken by major central banks ( in the form of finetuning operations to restore normal liquidity conditions ) and by governments, in particular those of the united states and the united kingdom, aimed at averting the risk of a broader systemic crisis. 2. however, it remains uncertain how long it will take before credit markets return to normal conditions. τhis continued uncertainty is reflected in, at times, strong tensions in money and credit markets ( which are more sensitive to risk factors – whenever these appear ) and in equity markets ( where there are occasional swings of investors'risk aversion and, thus, liquidity preference, as well as of their uncertainty regarding the macroeconomic outlook of the united states or other countries ). 3. due to globalisation, uncertainty in the global economy also affected the greek economy and the economies of the wider se european region, although these economies have proved quite resilient. impact on the real economy : despite the slowdown, the economic fundamentals of the euro area are sound. greece needs to intensify, rather than simply not relax, efforts to address structural weaknesses and macroeconomic imbalances … 1. the uncertainty surrounding the global economic outlook remains higher than usual. it seems that the adverse effects of the financial turmoil on world economic activity will be stronger and more protracted than initially thought. this is the case in particular with the us economy ( where the housing crisis is serious and is spilling over to other sectors ). any prolongation or deepening of the economic slowdown in the united states could have repercussions on the euro area and thereby on the greek economy. 2. i should clarify that by " uncertainty " i mean the possibility that downside risks to the growth projections made until recently could materialise. according to these projections made by international organisations, the growth rates of the global economy and of the european economy are slowing down, but growth is continuing, despite the