Burton Mills - Greek Banks to Undergo Critical Test
Major Greek banks will face stress tests in May to assess if they are able to cope without bailout assistance.
TAIPEI, Taiwan, March 30, 2018 (Newswire.com) - Analysts at Burton Mills say that Greece’s four major banks have come a long way since they were last tested in 2015, having raised approximately 15 billion euros in new capital.
However, Daniele Nouy, chairperson of the European Central Bank says that the country still has a serious problem with bad debt.
Greek banks could cause new difficulties for Europe as regulators investigate how stable they are following eight long years of economic crisis.
Burton Mills analysts say that Greece’s four largest financial institutions will be stress tested before other European banks because the nation is coming to the end of its third consecutive financial bailout scheme in August this year. Creditors are seeking assurances that Greece’s financial structure can survive without further monetary assistance.
Burton Mills analysts say markets are fearful that there will be unwelcome surprises with at least one or two of the four major Greek banks. Although significant progress has been made in the last few years, if there is a vulnerability found with even one of the banks, the credibility of the remaining three will also suffer and it would be exceedingly difficult for any of the banks to borrow money.
Burton Mills analysts say the biggest problem with the Greek banking system is the elevated level of bad loans. Greece has a ratio of almost 50 percent of non-performing loans, the highest in the euro zone.
Each of the major Greek banks has come up with a strategy to decrease the number of bad loans on their balance sheets and this may be looked upon favorably by regulators when the banks undergo the stress tests in May.
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Source: Burton Mills