Bank of Greece Governor Giorgos Provopoulos said that certain banks may need some additional capital once the stress tests conducted by BlackRock Solutions are published.
The central banker underlined that there is no cause for concern even if banks do need to further strengthen their capital bases, as the Hellenic Financial Stability Fund (HFSF) has a large capital reserve amounting to €8.7 billion that will cover any additional requirements. Eurobank has already announced it will go ahead with a €2 billion share capital increase, but it is not yet known whether it will be partly or fully covered by the HFSF.
It remains unclear when the results of the stress tests on the country’s lenders will be published, as the government and its creditors have not yet agreed on the final terms necessary for the issuing of the results. Greece’s creditors are in favour of stricter terms, while the banks are hoping for more lenient rules that will allow them to release some of their capital into the market.
The European Central Bank wants the funds that are not used for the recapitalisation of the banks from the original €50 billion to be retained as a safety buffer for any future problems. The government, on the other hand, would like to utilise some of the unused funds to cover other needs, such as the bridging of the funding gap.
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© Kathimerini
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