US investment Bank Goldman Sachs is reportedly in talks with the Serbian federal government to create a special fund for taking care of high-risk assets in the Balkan country, whose bad loans ratio is just one of the greatest in the region, daily Blic informed on Nov 3, quoting unnamed sources.

According to the report, finance minister Dusan Vujovic initiated talks on establishing the fund in summer season 2014 during a Goldman Sachs delegation's visit to Belgrade. The subject was also reviewed by PM Aleksandar Vucic as well as leading Goldman Sachs managers at a current meeting in London. 

A fund of this type would buy so-called contaminated assets from any type of commercial bank that are willing to sell them. Such a well-capitalised fund could manage to wait longer for the repayment of the bad loans, or to sell hypothecated properties when market problems are most beneficial.

Banks are normally all set to get rid of their bad loan collections at half the price of the debt, or perhaps as reduced as 20 percent or 10 percent, in order to keep their balances sound and also remain in line with regulatory requirements.

Blic points that in the past the Serbian government has actually thought about developing a state fund to buy non-performing loans, with domestic Bank’s sharing the operational costs of the fund. However, the banks failed to agree on the issue as those with tiny shares of bad fundings declined to finance the risky behaviour of their peers.

According to the most up to date central bank figures, the share of non-performing loans in Serbia rose to 23 percent at end-June from 20.7 percent at end-2013 and also 19.9 percent at end-June 2013. The NPLs ratio in the corporate sector was 27.4 percent at end-June, while the household loan arrears stood at 10.2 percent.