Thursday, October 29, 2015

ECB Check of Greek Banks to Show 14 Billion-Euro Hole

Reuters/New York Times
October 29, 2015

The European Central Bank's health check of Greece's four big banks will show a total capital shortfall of up to 14 billion euros ($15.34 billion) if economic conditions become "adverse", two banking sources told Reuters on Thursday.

The ECB's Single Supervisory Mechanism (SSM) is assessing the capital needs of National Bank of Greece, Piraeus, Alpha Bank and Eurobank. Results will be released on Saturday.

The ECB's so-called comprehensive assessment of the banks' books included a scrutiny of their loan portfolios and stress tests carried out using baseline and more adverse scenarios for the course of the Greek economy to project possible credit losses up to 2017.

Under the baseline scenario, the stress test will show a capital gap of about 4.5 billion euros for the four banks, one of the sources said. Factoring in the adverse scenario, it could be as high as about 14 billion.

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