Non-performing loans in the banking system in Cyprus reached 46% of total loans, which is 19 billion euros or 120% of GDP.
Such data led by the International Monetary Fund Luis Kortavaria. He spoke at the ongoing international conference in Nicosia on Debt and Loan Restructuring, organized by the Central Bank of the Republic of Cyprus.
According to him, healthy banks - "difficult and time consuming task for the implementation of which no miracle recipes," said Kortavaria. Banks need to understand that "it is necessary to eliminate some borrowers." "Of course, it is necessary to minimize such cases, however, the goal is to remain on the market only good borrowers," - said the representative of the IMF.
Head of the Central Bank of Cyprus Panicos Demetriades in his speech acknowledged that the level of debt and non-performing loans reached an unprecedented scale. "For many years, approaches in Cyprus and other countries in the field of risk management and credit policies were flawed because based on the measurement of assets and excessive expansion of the real estate market - said Dimitriadis. - These recipes have led to a significant increase in debt, especially conditions in an attempt to overcome the hardships of the financial crisis. "
He stressed that "debt management and restructuring of loans have become one of the most difficult problems faced by the banking sector in Cyprus towards the restoration of financial stability."