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Welcome, 77 artists, 40 different points of Attica welcomes you by singing Erotokritos an epic romance written at 1713 by Vitsentzos Kornaros

Friday, January 9, 2015

Moody’s: Political Uncertainty Negative for Greek Banks

Moody’s ratings agency estimates that the January 25 snap elections in Greece, which create political uncertainty, will have a negative effect on Greek banks. “The political uncertainty regarding the Greek government and the consequent resurgence of rumors about a possible Greek exit from the Eurozone affects the confidence of depositors and impedes the access of banks to liquidity,” highlighted Moody’s in its latest report. The ratings agency said the speculation follows polls that indicate Greek main opposition SYRIZA as winner of the upcoming elections. SYRIZA, is noted in the report, is firmly against the fiscal consolidation measures and reforms agreed between the Greek coalition government and its international lenders. “Although there was a slight decrease in deposits in recent weeks, Greek banks maintained their liquidity, increasing their dependence on European Central Bank funding,” underlined Moody’s, adding that the availability of the European Social Fund (ESF) for Greek banks implies that Greece complies with the conditions set by the Troika and remains in the EU support program. “We expect that the funding recently acquired by Greek banks with their borrowing from the interbank market and the securitization of loans will be temporarily ‘dry’ and this will worsen their liquidity, at least until the normalization of the political situation and the new government reach an agreement with the Troika for the support program, which was extended until the end of February 2015,” was further estimated in the report. In addition, it was noted that interbank lending has been marginally reduced during the last two weeks and was replaced by funding emerging from the European Central Bank (ECB). “Borrowers are likely to negotiate with banks for non-performing loans in the hope that any new government will promote friendly measures for them, including debt cancellation, a topic widely discussed by political parties in recent months,” Moody’s concluded, revealing that the chances are high for a delay in the improvements of banks’ asset quality, which was expected within the second half of the year by the agency.


READ THE ORIGINAL POST AT greece.greekreporter.com