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GreekReporter.comGreeceFT Insists Greek Banking System Needs 20 Billion Euros

FT Insists Greek Banking System Needs 20 Billion Euros

greek-economic-crisis FTThe Financial Times published another article concerning the Greek economy stressing the fact that Greek banks are in need of a 20 billion dollar capital, even though the IMF denied it yesterday and spoke of a 5.5 billion recapitalization.
This new article states that “healthy chirruping is once again fading to an ominous quiet,” after IMF officials appear to believe that the Greek banking system needs a new 20 billion euro capital – much more than the 6 billion euros the national authorities or external consultants of BlackRock believe to be the deficit.
Therefore, according to FT,  Greece, a geographically and economically peripheral eurozone member, is once more at the heart of things and as commented in the article “the precariousness of the country’s finances will, of course, be a political touchpaper, especially in Germany where the population continues to balk at the transfer of wealth from north to south.”
However, it was mentioned that there is a second very important aspect to the latest Greek struggle.
The ECB, the only banking supervisory authority in the eurozone, is not expected to complete the Asset Quality Review (an in-depth assessment of the value of loans on the books of 130 “big” banks), before autumn. The same applies to the stress tests carried out by the EU regulator, the European Banking Authority. Hence, many believe the focus on Greece will consolidate or dissolve investor confidence in the integrity of the European banking system.
“Establishing the reasons for the range of estimated capital shortfalls at Greek banks is key,” read the article. Meanwhile, the ECB finds itself in a strange middle position, which puts its credibility in danger.
“As troika meetings in Greece continue this week, the noise is already making investors and the general populace nervous about how short of money the banking system really is. A decision is needed – and soon,” concluded the FT article.

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