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Chr. Staikouras: targeted structural reforms, with a modernizing sign

The Government is launching, with consistency, method and responsibility, important and targeted structural reforms with a modernizing sign, said the Minister of Finance, Christos Staikouras, speaking to the Finance Committee of the Parliament, on the provisions of the draft law “Reform of the and the Guarantee Fund for Investment Services, modernization of the Public Debt Management Organization and other urgent provisions “.

These reforms, underlined Christos Staikouras, aim at:

– the development of the Greek financial sector,

– improving the framework for action and strengthening the country’s tools in dealing with international financial markets,

– the adoption of tax incentives for the green economy, energy and digitization,

– implementing policies to address the effects of the unprecedented health and energy crisis as well as geopolitical turmoil,

– strengthening the country’s defense industry,

– facilitating the repayment of compensation to redundant employees of credit institutions closed during the crisis.

ΤΧΣ

Referring to the reform of the institutional framework of the Financial Stability Fund, Christos Staikouras underlined that under the management of a more flexible administrative body, and according to a specific goal, the Fund will be called upon, within an immediate period of time, to launch its investment by the banks in which it currently holds a stake.

In this direction:

1st It is explicitly provided that the disposal of the Fund’s holdings to the banks, within a specific time horizon delimited by its duration, is the purpose of the Fund, which it must serve. Therefore, the Fund must now act in this direction.

2nd A short extension of the duration of the HFSF is granted by 3 years, ie until December 31, 2025, from the currently scheduled expiration date, which is December 31, 2022. “The life of the Fund has been repeatedly extended in the past, for similar periods. “, pointed out the Minister of Finance.

3rd The management model of the HFSF is being reformed, with the aim of simplifying it and enhancing its flexibility in decision-making, in order to accelerate decision-making, including aiming at the timely re-investment of the credit institutions in which – today – it participates. Thus, the two existing bodies of the HFSF, namely the three-member Executive Committee and the seven-member General Council, are merged into a nine-member Board of Directors. In this new body, the Greek State, which is widely understood, ie the Ministry of Finance and the Bank of Greece, maintains its influence, while maintaining the required balance with the institutions. This nine-member Board of Directors consists of three executive and six non-executive members. Of these, the Ministry of Finance and the BoG will jointly appoint an executive member (currently the Ministry of Finance does not have the corresponding ability to appoint a member to the three-member Executive Committee of the HFSF, while only the BoG has this right), and further the Ministry of Finance as well as the BoG will appoint a non-executive member. The remaining members are appointed in accordance with the procedure provided for today by the Selection Committee.

4ον. Independence conditions are added for the independent non-executive members of the Board, such as, for example, a maximum term of office of 7 years on the Board, the exceeding of which hinders their further participation in it, as well as the evaluation of cases. conflicts of interest of members due to their employment in other positions.

5ον. It is envisaged that the Selection Committee, in the context of submitting a list of candidates to the Minister of Finance for the appointment of a member of the Board, must provide a minimum number of three candidate members proposed by the Selection Committee to the Minister of Finance, in order to increase the guarantees suitable members of the Board of the Fund and to ensure the possibility of selection in the Ministry.

6th The existing restrictions on the Fund’s voting rights, which will henceforth be exercised as a joint shareholder, are lifted.

7ον. The law reflects the general principles that govern the de-investment strategy, as well as the specifications for its formulation and implementation. The Fund adopts a collective deinvestment policy, which must comply with the principles of competition and be governed by principles such as the financial and operational viability of the credit institution, market conditions, macroeconomic conditions, and the conditions governing the expected impact of the deinvestment strategy on the financial sector, the market and the wider economy, respect for the principle of transparent action, the need to draw up a timetable for the implementation of the deinvestment strategy, and the need to return the Greek financial sector to a purely private equity structure. To this end, the Fund may hire an independent financial advisor to assist it in formulating the policy, which – prior to its adoption by the Fund – obtains the consent of the Greek State, said the Minister of Finance and pointed out that then , the execution of the disbursement per credit institution is prepared by a separate disbursement consultant, for the selection of which the Ministry of Finance submits its opinion to the Fund.

8ον. The special management rights of the Fund to the BoDs are limited, in cooperation with the BoG as responsible for the implementation of the banking legislation. banks in order to remove duplication of existing banking legislation and increase the investment of credit institutions.

Guarantee Fund

Regarding the new institutional framework regarding the establishment and operation of the Guarantee Fund for Investment Services, the Minister of Finance said that the main changes brought by this Draft Law to the existing institutional framework are the following:

1st The supervision of the “Guarantee” passes from the Hellenic Capital Market Commission to the Minister of Finance, and a member of the Board. of the Guarantee comes from the Ministry of Finance. The Presidency of the Board of the Guarantee is transferred to the Hellenic Capital Market Commission.

2nd Rules of good governance of the “Guarantee” are established, through criteria of incompatibility for the members of the Board. and drafting of Internal Rules of Procedure and Rules of Operation of the Compensation Committee.

3rd Clear conditions are set for the possibility of providing compensation, which amounts to a maximum of 30,000 euros per investor.

4ον. There is an obligation for the annual balance sheets to be prepared in accordance with International Financial Reporting Standards. “The aim is to enable the” Guarantee “to keep pace with developments in the context of the capital market operation and the architecture of the financial system at international and European level, acting in an ever-expanding and more complex range of investment services and financial instruments “, as stated by Mr. Staikouras.

ΟΔΔΗΧ

Referring to the provisions for the Public Debt Management Agency (ODDIH), the Minister of Finance stressed that the intensity of instability in the international financial markets, the emergence of new risks and financial instruments, as well as the increased demands, on the one hand for rapid and effective action of the State, on the other hand for control and transparency, have made it necessary to modernize the Organization.

The draft law, as he pointed out, introduces a new, unified and coherent scheme of organization of the services of ODDIH. 4 Directorates and 2 Independent Departments are established, with clearly defined responsibilities, which meet its modern needs. The international model of “Three Lines of Defense” is followed for the structure of the services. The first line of defense consists of the Lending and Management Division (“Front Office”) and the Settlement and Transaction Control Division (“Middle & Back Office”). The second line of defense is organized within the Directorate of Risk Analysis and Compliance. “Risk management and regulatory compliance functions promote a system of checks and balances, guaranteeing compliance with the principles of good governance, efficiency and transparency,” said Mr Staikouras, adding that the Establishment of an Independent Internal Audit Department (“Internal Audit”) completes the system of three lines of defense and “the Department is responsible for the independent control of the first two levels, in order to provide assurance to the management “Internal audit system promotes the adoption of best practices, addressing key weaknesses and raising management awareness of the necessary corrective measures”, while the establishment of an Independent Legal Support Department, which is necessary for operation of ODDIH, at the level of es external operation.

“The main axis of the performance of the new responsibilities of the ODDIH”, also said the Minister of Finance is the recognition of the necessary flexibility, in order for the Agency to be able to take the necessary actions and to issue the relevant acts, without the prior cooperation of another administrative body. . Besides, the whole action of O.D.D.H. is under the supervision of the Minister of Finance and is part of the relevant Lending and Debt Management Program, which is also approved by the Minister of Finance.

“Through the modernization of the legislative framework that governs its action, the ODDIH will be able to exercise in the best and most effective way its extremely critical responsibilities regarding the management of public debt, and in particular in relation to the financing of the Greek State, the improvement of the borrowing costs, the achievement of the best possible structure of the public debt and the management of the treasury of the State “, said Mr. Staikouras and pointed out that the possibility and the flexibility will be provided to Organization to take all necessary initiatives and actions aimed at improving and operating more efficiently the secondary market of government securities, in order to reduce transaction costs, to make Greek government securities more attractive to the international investment community and to expand – further – the investment their customer base.

In relation to the other provisions of the bill, the Minister of Finance mentioned:

-in the provision for payment of a special incentive for productivity to employees in Hellenic Aviation Industry SA (E.A.B. SA).

– the abolition of the luxury tax on products of tariff heading 43.03 (clothing, clothing accessories and other fur products) (currently exempt from the luxury tax on domestically produced fur products sold wholesale in-country between companies) and, items of par. 1 of article 17 of law 3833/2010 that are received as raw materials for the production of finished products (today this exemption concerns only the raw materials received for the domestic production of fur products).

– the incentive to provide a 100% discount on small and medium-sized enterprises’ expenditures related to green economy, energy and digitization.

-the concession without consideration, to the Ministry of Culture and Sports, of the ownership of part of the designated public property owned by the Greek State, for the construction of the Archaeological Museum of Lefkada.

-the possibility for a special liquidator of more than one specially liquidated credit institution to apply for a license from the Bank of Greece for the temporary use of cash of one specially liquidated credit institution for the rapid satisfaction of creditors of another specially liquidated credit institution under the same special liquidator .

Source: AMPE

Source: Capital

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