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Ten Percent of Bad Debtors Have Large Bank Accounts

debtSources from Bank of Greece say that several wealthy businessmen have allowed their companies to lapse into over-indebtedness. According to a Kathimerini daily report, one in ten bad debtors in Greece have large bank accounts.
Banks estimate that non-performing loans have reached 35 percent. However, a number of debtors have strategically defaulted their loans using the economic crisis as an excuse. Banks call them strategic defaulters and monitor their financial moves, according to the report.
There have been many cases where bank customers have non-performing loans from banks in which they have deposits that don’t justify their claimed inability to service their loans. As the economy improves, banks would expect that debtors would be better able to make payments. However, this is not the case for 10 percent of debtors.
Between 2009 and 2013, bank deposits decreased by almost 70 billion euros. At the same time, bad loans amounted to 70 billion euros in December 2013. Bank officials estimate that out of the 30 billion euros in non-performing loans, about 10 billion are from strategic defaulters. The report also says that many business owners had transferred company funds to their personal accounts and left their businesses at default. Therefore, there are many affluent owners but their companies are over-indebted.
The picture of affluent business owners with bankrupt or over-indebted companies is the result of the distorted Greek business culture that developed in the years of economic prosperity, when owners received high salaries and bonuses and are still very affluent. Banks have strong indications that there is a relationship between bad loans and money sent abroad.
At the same time, the report says, wealthy company and business owners are waiting from the state to resolve the general problem of bad loans anticipating debt haircuts.

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