Stress Test: Greek Banks Show €5 Billion Capital Need

According to a second stress test conducted in the recent months by the Bank of Greece, the leading four banks of the country are expected to need a total of about €5 billion in extra capital. The Greek central bank conducted this second health check on the country’s top four banks (National Bank of Greece, Alpha Bank, Piraeus Bank and Eurobank), so as to assess whether last summer’s recapitalization worth €28 billion has left the banks capable of absorbing eventual future shocks, as bad loans keep rising. This estimate, which is based on the figures provided by the Bank of Greece for each bank, has to get the final approval of the troika, which is overseeing all financial transactions of the country on behalf of Greece ’s international creditors. “The estimate for the total capital need is about €5 billion,” said a senior bank official, declining to be named. The source didn’t say what individual banks would require. The results, which were expected to be published by early last month, were delayed due to the prolonged talks held with the inspectors of the troika, the European Union, International Monetary Fund and European Central Bank (EU-IMF-ECB). The officials of the Bank of Greece declined to provide any comments, saying only that the stress test results would be released soon.

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