Bank of Greece disputes IMF view on capital buffer

8 February 2017
964 Views

Greece’s central bank is disputing the International Monetary Fund’s view that the country’s banks need a 10-billion-euro capital buffer to cover any further bailout support, saying the IMF does not explain why such support would be needed.

In an annual review of Greece’s economic policies released on Tuesday, the IMF said that the buffer is needed because of remaining risks to banks’ asset quality and a “still bleak” prospect for profitability.

“Staff has maintained its assumption from May that a buffer of around 10 billion euros, 5.5 percent of 2016 GDP, should be set aside to cover potential additional bank support needs,” the IMF said in the report released on Tuesday.

It said that despite successive recapitalizations that pumped about 43 billion euros, equaling close to 25 percent of GDP, to Greece’s public debt since 2010, the banks’ balance sheets remain vulnerable to high levels of bad loans.

Another IMF concern is that half of Greek banks’ capital comprises so-called deferred tax assets, which it views as contingent liabilities of the state.

The Bank of Greece disputes this, saying the IMF is “unduly pessimistic” in its macroeconomic and fiscal projections and that it played down the progress achieved in the banking sector.

You may be interested

PM Mitsotakis cites Greek Constitution to back mandatory vaccinations
GREECE
shares25 views
GREECE
shares25 views

PM Mitsotakis cites Greek Constitution to back mandatory vaccinations

makis - Jul 23, 2021

Prime Minister Kyriakos Mitsotakis cited the Greek Constitution in response to those opposing mandatory Covid-19 vaccination during his meeting with…

Who Has Spent The Most Time In Space? (infographic)
WORLD
shares37 views
WORLD
shares37 views

Who Has Spent The Most Time In Space? (infographic)

Panos - Jul 22, 2021

As Russia celebrates 60 years since Yuri Gagain became the first person to orbit the Earth, the state of space travel looks…

What Do Americans Think Of Famous Billionaires? (infographic)
FINANCE
shares39 views
FINANCE
shares39 views

What Do Americans Think Of Famous Billionaires? (infographic)

Panos - Jul 22, 2021

Hot on the heels of fellow billionaire Richard Branson, Amazon founder Jeff Bezos is set to blast into space. He…

Leave a Comment

Your email address will not be published.