Greek Banks Face $15.9 Billion Bill After Economic Debacle

Greece’s four main banks must raise 14.4 billion euros ($15.9 billion) in fresh capital,  the European Central Bank said, as investors and taxpayers face the cost of repairing the damage from six months of wrangling between the nation’s government and its creditors.

   An asset-quality review carried out by the ECB resulted in valuation adjustments of 9.2 billion euros for the National Bank of Greece SA, Piraeus Bank SA, Eurobank Ergasias SA and Alpha Bank AE, the Frankfurt-based supervisor said Saturday in a statement. The banks’ capital gap amounted to 14.4 billion euros under a simulated stress test scenario, and 4.4 billion euros under baseline macroeconomic assumptions. The four banks will have to submit recapitalization plans to the ECB’s supervisory arm by Nov. 6.

   “Covering the shortfalls by raising capital would then result in the creation of prudential buffers in the four Greek banks, which will facilitate their capacity to address potential adverse macroeconomic shocks,” the ECB said in the statement, adding that a minimum of 4.4 billion euros, corresponding to the AQR and baseline shortfall, is expected to be covered by private means.

   The capital shortfall is “significantly lower than feared,” German Deputy Finance Minister Jens Spahn said, while U.S. undersecretary for international affairs Nathan Sheets said in an interview before the results that the health of the Greek financial system is now “clearly better” than a few months ago.

Πηγή: bloomberg.com