Greek banks facing governance overhaul

24 July 2012

Greek banks that have been recapitalized as part of the country's bailout arrangement may have to overhaul their governance and management practices, it has emerged.

The European Commission (EC) has admitted financiers in the embattled eurozone member state might be forced to make significant changes to these aspects of their business as concerns about malpractice in the banking sector mount, Reuters reports.

Greek lenders are set to undergo audits to determine their due diligence and also conduct reviews into their management structures in return for the assistance they will receive from the eurozone bailout fund.

Last week, Reuters indicated undisclosed and secretive self-purchasing of bank stock could become increasingly commonplace in Greece, which, in turn, would raise questions over the strength of the nation's corporate oversight.

In response to this report, EC spokesman on competition and antitrust issues Antoine Colombani stated: "The recapitalization process will entail a significant revamp of corporate governance structures and management practices in banks where malpractice has occurred."

By Tony Aynsley

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