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Greece Considers Bank Bad-Loan Plan After Stock Rout

  • State-guaranteed bonds would be similar to Italian plan
  • Lenders’ shares rebound, led by Piraeus, Eurobank, Alpha Bank
A Piraeus Bank SA branch in Athens. 

A Piraeus Bank SA branch in Athens. 

Photographer: Kostas Tsironis/Bloomberg

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Greece is weighing a plan to help banks speed up their bad-loan disposals, possibly including a government guarantee, in a bid to restore confidence in the battered sector, people familiar with the matter said.

While the details are still being worked out, the proposal would see lenders unload some bad loans into special purpose vehicles, taking them off banks’ balance sheets. The SPVs would issue bonds, some backed by the state, and sell them to investors, the people said, asking not to be named as the information isn’t public.