Fitch expresses reservations about BoG's plan to reduce bad loans

Fitch Ratings has reservations about the Bank of Greece's plan aimed at the reduction of local banks' bad loans, owing to a number of unknown factors that it has discerned.

Along with the proposals from the Hellenic Financial Stability Fund (HFSF), Fitch says such plans depend on the attitude of investors toward Greek bonds supported by nonperforming exposures, compliance with rules regarding state subsidies, the precise impact on banks and the fiscal effects on Greece, including the consequences on the country's cash buffer.