A banker proposes as a first to write down loan amounts in orderto unfreeze the banking market.
Many bank customers want to keep paying their loan instalments, butthey are genuinely unable to do it for pre-crisis amounts soinstead of ending up in default, which "impairs the value," theamount of a loan could be reduced, for instance, from 40,000 to30,000 euros, which would result in a manageable instalment, saysVladimir Kalinov, vice-president of the risk division of RaiffeisenBank.
This is the first high-level banker to publicly propose a reductionin the value of loans.
Individuals have borrowed 23 billion euros from banks, around 10billion euros of which are mortgage, real estate loans, andconsumer loans used to purchase homes. Since home prices have beencut to the 2006 level, almost all loans granted in the 2007-2008period should be reduced in order to come up with an updated valueof the homes.
"There are customers willing to make the effort to continue to paya lower instalment and for them we can take into consideration the"write down" option (reducing the book value of a loan).Unfortunately, there are legislation-related difficulties becauseif this is a move coming from the bank, then the loan valuedifference is subject to a 16% tax payable both by the bank and thecustomer. No one is happy to take on this cost and I thinksomething should be done because many banks would opt forwrite-down if the legislation allowed such operations underacceptable terms," Kalinov told ZF in an interview.
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