{"id":18290,"date":"2018-08-28T11:16:58","date_gmt":"2018-08-28T08:16:58","guid":{"rendered":"https:\/\/bestinsurance.gr\/a1\/?p=18290"},"modified":"2018-08-28T11:16:58","modified_gmt":"2018-08-28T08:16:58","slug":"greek-bank-chiefs-say-they-can-easily-handle-loss-of-ecb-waiver","status":"publish","type":"post","link":"https:\/\/bestinsurance.gr\/a1\/archives\/18290","title":{"rendered":"Greek Bank Chiefs Say They Can Easily Handle Loss of ECB Waiver"},"content":{"rendered":"
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Greek Bank Chiefs Say They Can Easily Handle Loss of ECB Waiver<\/h1>\n<\/div>\n
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  • Heads of lenders say Greece needs investment, bad-loan cleanup<\/li>\n
  • CEOs of four systemic bank speak about the challenges ahead<\/li>\n<\/ul>\n<\/section>\n
    By\u00a0Sotiris Nikas\u00a0and\u00a0Marcus Bensasson<\/p>\n

    (Bloomberg) —\u00a0<\/section>\n

    Greek bank bosses brushed off concerns that the end of a special rule giving them access to the European Central Bank\u2019s cheap money will\u00a0spell trouble.<\/p>\n

    The expiry of Greece\u2019s bailout program last week came with a catch. It ended outside control of Greece\u2019s economic policy, but forced the country\u2019s banks to stand on their own two feet again, even though they still have the worst bad loan problem in Europe. While the program ran, the ECB waived a rule stopping it from accepting the country\u2019s junk-rated sovereign bonds as collateral. As such it was able to supply vital liquidity.<\/p>\n

    That waiver is now over.<\/p>\n

    At the peak of the debt crisis, Greece\u2019s banks needed over 150 billion euros ($175 billion) of liquidity from the ECB, having lost almost all interbank funding and much of their deposit base. That need has now fallen to only 13 billion euros, as of the end of July. Of that, only around 3.5 billion is backed by Greek government collateral that is now ineligible for ECB operations.<\/p>\n

    As such, all four chief executive officers of Greece\u2019s systemic lenders told Bloomberg News they\u2019re confident they can get by.<\/p>\n

    \u201cGreek banks have already substituted the bulk of the emergency liquidity at peak crisis with market funding,\u201d said\u00a0Fokion Karavias, chief executive officer of\u00a0Eurobank Ergasias. \u201cBar a significant further deterioration of market conditions, we expect no difficulty in using the remaining Greek government bonds for similar market transactions.\u201d<\/p>\n

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    The impact from not being able to use Greek government debt will be \u201cminimal,\u201d said National Bank of Greece chief executive\u00a0Paul Mylonas.<\/p>\n

    Christos Megalou, chief executive of Piraeus Bank, went further, describing the removal of the waiver as \u201cpractically a non-event.\u201d His bank, the country\u2019s biggest by assets, has taken measures to shift about 1 billion euros of ECB funding onto the interbank repo market, he said.<\/p>\n

    Read More: Why Greek Banks\u2019 New Loans Are Not Enough for Cratered Economy<\/p>\n

    Alpha Bank has maintained funding lines from the ECB by substituting Greek government bonds and treasury bills with other ECB-eligible assets, according to its chief executive,\u00a0Demetrios Mantzounis. Greece\u2019s fourth-biggest lender has also increased its open market repo transactions with international counterparties, he said.<\/p>\n

    Attracting Investment<\/h3>\n

    As the Greek banks prepare to report their financial results for the first half of the year this week, the banks\u2019 bosses said that what Greece needs most is to follow through with the reforms that will attract investment.<\/p>\n

    The major challenge ahead for the banks will be managing the stocks of non-performing exposures, which at close to half of all loans are the most in the euro area, according to Eurobank\u2019s Karavias. In the following months, they will be presenting regulators with plans to reduce the ratio to the mid-teens by the end of 2021, he said.<\/p>\n

     <\/p>\n

    Greece remains Europe\u2019s most indebted country as a proportion of gross domestic product, and the economy is still struggling to recover from the loss of more than a quarter of its output during the crisis. The unemployment rate is still almost 20 percent, making it hard for people to repay their bank loans.<\/p>\n

    \u201cAdditional improvement in confidence to attract both domestic and foreign investment requires the steady implementation of structural reforms, and a rebalancing of the tax burden,\u201d said National Bank\u2019s Mylonas. \u201cThe main risks other than implementation fatigue arise from external factors,\u201d with the country\u2019s two largest neighbors — Turkey and Italy — both experiencing economic difficulties, he said.<\/p>\n<\/section>\n

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    Greek Bank Chiefs Say They Can Easily Handle Loss of ECB Waiver Heads of lenders say Greece needs investment, bad-loan cleanup CEOs of four systemic bank speak about the challenges ahead By\u00a0Sotiris Nikas\u00a0and\u00a0Marcus Bensasson (Bloomberg) —\u00a0 Greek bank bosses brushed off concerns that the end of a special rule giving them access to the European<\/p>\n","protected":false},"author":1,"featured_media":2934,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[2],"tags":[],"class_list":["post-18290","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-2"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/18290","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/comments?post=18290"}],"version-history":[{"count":1,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/18290\/revisions"}],"predecessor-version":[{"id":18291,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/posts\/18290\/revisions\/18291"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media\/2934"}],"wp:attachment":[{"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/media?parent=18290"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/categories?post=18290"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bestinsurance.gr\/a1\/wp-json\/wp\/v2\/tags?post=18290"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}