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Greece to delay stress testing of banks till 'likely in October'
By George Georgiopoulos |
September 21, 2010, Tuesday
|
Print Edition
Print Edition
GREECE will postpone stress testing the country's banks for later in the autumn, a source at the central bank told Reuters yesterday.
"The stress tests will not be done in September," said a Bank of Greece official who did not want to be named. "They will take place later in the autumn, very likely in October."
As part of the emergency 110 billion euro (US$144 billion) funding package Greece clinched with the International Monetary Fund and its euro zone peers in May, it agreed on stronger supervision of the banking system, including quarterly stress tests.
There was no set date for the Bank of Greece tests but the official said there had been discussion internally at the bank on conducting them in September.
Greece's big banks took part in a pan-European stress test in July, with only one, ATEbank, failing to make the grade under the simulation's most adverse scenario.
"Banks were stress tested recently, not much has changed since then," the official said.
In the July test, ATEbank's Tier 1 ratio fell to 4.36 percent, below a 6.0 percent safety threshold.
"As is stipulated in the (EU/IMF/ECB) memorandum, there will be regular stress tests," the official said.
But he did not provide any details on how the tests to be conducted by the Bank of Greece would differ from the simulation conducted by Committee of European Banking Supervisors.
Greece's international lenders want to ensure the banking system is adequately cushioned against non-performing loans as the economic downturn deepens.
Greece's austerity-induced recession has led to increased loan impairments, forcing Greek banking institutions to set aside more cover for provisions.
"The stress tests will not be done in September," said a Bank of Greece official who did not want to be named. "They will take place later in the autumn, very likely in October."
As part of the emergency 110 billion euro (US$144 billion) funding package Greece clinched with the International Monetary Fund and its euro zone peers in May, it agreed on stronger supervision of the banking system, including quarterly stress tests.
There was no set date for the Bank of Greece tests but the official said there had been discussion internally at the bank on conducting them in September.
Greece's big banks took part in a pan-European stress test in July, with only one, ATEbank, failing to make the grade under the simulation's most adverse scenario.
"Banks were stress tested recently, not much has changed since then," the official said.
In the July test, ATEbank's Tier 1 ratio fell to 4.36 percent, below a 6.0 percent safety threshold.
"As is stipulated in the (EU/IMF/ECB) memorandum, there will be regular stress tests," the official said.
But he did not provide any details on how the tests to be conducted by the Bank of Greece would differ from the simulation conducted by Committee of European Banking Supervisors.
Greece's international lenders want to ensure the banking system is adequately cushioned against non-performing loans as the economic downturn deepens.
Greece's austerity-induced recession has led to increased loan impairments, forcing Greek banking institutions to set aside more cover for provisions.
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