GREECE: Country awaits stress tests results after criteria toughened for Greek banks 24 hours ahead of the publication

Record ID: 566364

  • Title: GREECE: Country awaits stress tests results after criteria toughened for Greek banks 24 hours ahead of the publication
  • Date: 24th July 2010
  • Summary: INTER MINISTERIAL MEETING ON PRIVATIZATION AT FINANCE MINISTRY VARIOUS OF FINANCE MINISTER GEORGE PAPAKONSTANTINOU AT INTER MINISTERIAL MEETING ON PRIVATIZATION
  • Embargoed: 8th August 2010 13:00
  • Keywords:
  • Location: Greece
  • Country: Greece
  • Topics: International Relations,Finance
  • Reuters ID: LVAANTLQQ54CAB351LI6J9E3EEJB
  • Story Text: Greece awaited the publication of the stress tests results on Friday (July 23) after European bank regulators toughened the criteria for Greek banks on Thursday (July 22), just 24 hours before a deadline to release their results.
    It was not immediately clear how the stricter criteria would affect the six Greek banks being tested as part of a wider European exercise aimed at assessing how 91 European lenders would cope with another economic downturn.
    An official at a Greek commercial bank told Reuters that they were notified that the parameters had changed and had been made more restrictive.
    The official said one of the changes concerned the level of provisions Greek banks could use to offset loan losses projected under the test.
    A separate banking source also confirmed that changes were made but declined to give any further details.
    Greece's media reflected worries ahead of the results. Greek financial newspaper IMERISIA wrote "Anxiety for the banks, markets move to stress tests rhythm".
    "Reshuffling of deck cards for the banks. Pass: National bank, Alpha bank, Eurobank and Piraeus bank. Anxiety for Atebank and Hellenic Postbank," wrote daily newspaper To Vima after the stricter criteria for the Greek banks were announced.
    The Governor of the Bank of Greece, George Provopoulos, held a meeting with Greek President Karolos Papoulias earlier in the day but declined to make any comments on the stress tests.
    Greek lenders have been hit hard by the country's sovereign debt crisis, which deprived them of access to wholesale funding to refinance their operations.
    A recession has also hit profit margins and increased bad loans.
    Greece's government and central bank have expressed confidence that all the country's lenders would pass the stress tests. Greek banks have been open about their exposure to government bonds, estimated at about 40 billion euros, but list the bulk outside their trading books.
    But analysts see some banks facing hurdles, naming state-controlled ATEbank as one of the most vulnerable. Its shares fell on Friday (July 23) on concerns that it would announce it needs to raise capital after bank stress tests are published later in the day.
    The government has received an offer for its stake in the lender, which has already said it was considering ways to boost its capital.
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