According to Goldman Sachs, the impact of the recent Supreme Court decision regarding Katseli Law loans is likely to be manageable for Greek banks, although details of the decision are still awaited.
Goldman Sachs has assessed the implications of a recent Supreme Court ruling concerning loans under the Katseli Law in Greece, suggesting that the impact on Greek banks will likely be manageable. The Katseli Law, officially Law 3869/2010, was enacted to assist borrowers facing financial difficulty by allowing them to reduce their main residence mortgage debt and repay the remainder over extended periods. However, the special provisions for protecting housing loans under this law expired in 2019 and were replaced with a different bankruptcy framework.
The Supreme Court’s recent decision mandates that interest on Katseli loans be calculated on a monthly basis, a change that could affect borrowers' repayment structures. Goldman Sachs notes the importance of understanding the full details of the ruling before making a definitive assessment of the potential risks and challenges it poses to banks. While the situation remains fluid, analysts suggest that the banks may be positioned to absorb any resulting impact due to their improved capital buffers.
This ruling and its implications could have significant consequences for borrowers previously protected under the Katseli Law and for the broader financial system in Greece. As the country continues to recover from economic hardships, the actions taken by the banks in response to this decision will be crucial in determining the overall stability of the sector and the welfare of indebted individuals, particularly in the context of housing stability in the nation.
