Calamos Supports Greece
GreekReporter.comGreek NewsEconomyGreek Banks Face Two More Years of Recession

Greek Banks Face Two More Years of Recession

Bank of Greece Governor Giorgos Provopoulos
Bank of Greece Governor Giorgos Provopoulos

Even as the Greek government touts a coming primary surplus and predicts the beginning of a recovery next year, The Governor of the Bank of Greece Giorgos Provopoulos said he expects the country’s deep recession, now in a sixth year, will last another two years and that its banks will face a series of  “adverse scenario” stress tests.
The purpose of the stress tests is to determine whether the country’s largest banks – the National Bank of Greece, Piraeus Bank, Eurobank and Alpha Bank – are able to cope with future crises, after being recapitalized with a 28-billion-euro rescue package from the Hellenic Financial Stability Fund.
While the similarly “adverse scenario” stress tests from 2011 and 2012 have been exceeded, the central banker, in an interview with Reuters, warned that these stress tests should not be treated as predictions.
Despite all that, Provopoulos claimed that he was “increasingly optimistic” about the future of the Eurozone and Greek economy, underlining the estimations of a return to growth in 2014.
“Under the baseline scenario, which represents our forecast and the Troika΄s forecast, Greece will return to growth in 2014,” he said, referring to the country’s international lenders, the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB.). “Under the adverse scenario, growth kicks in in 2016, with small negative growth rates until then,” he added.
Greek banks will have to prove they have enough capital to withstand another two years of recession, he said to the news agency, noting the tests for 2011-12 showed had bad off the major banks – National Bank of Greece, Piraeus, Alpha Bank, and Eurobank – were, he said.
The adverse scenario from Greece΄s 2011/2012 stress tests was exceeded, but Provopoulos said the latest adverse scenario should not be interpreted as a forecast in this year΄s tests, which are being carried out on National Bank of Greece, Piraeus, Alpha Bank and Eurobank.
Greece may have to agree a third bailout program because it will not have enough money to meet spending in 2014 and there has been speculation that the cash could come from the bank bailout fund.
“It is imperative that the unused funds amounting to between 8 to 9 billion euros remain available as a backstop for the banking sector,” said Provopoulos.

See all the latest news from Greece and the world at Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!

Related Posts