Bank of Greece disputes IMF view on capital buffer

8 February 2017
954 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

Greece: 7,000 applications for adult movies
GREECE
shares23 views
GREECE
shares23 views

Greece: 7,000 applications for adult movies

Panos - Jun 23, 2021

After the first casting of the newly formed production company SugarBabes.tv in September 2019 and the endless queues of about…

Menendez Bill passed unanimously & goes to Senate for approval
DEFENCE
shares13 views
DEFENCE
shares13 views

Menendez Bill passed unanimously & goes to Senate for approval

Panos - Jun 23, 2021

The new bill on US-Greek defense cooperation was approved by the Senate Foreign Relations Committee with universal support. Now the…

Signatures for Line 4 of the Metro – Mitsotakis: The country is turning the page (videos)
FINANCE
shares18 views
FINANCE
shares18 views

Signatures for Line 4 of the Metro – Mitsotakis: The country is turning the page (videos)

Panos - Jun 23, 2021

The signatures for the biggest construction project that is taking place after Attiki Odos, fell tonight in Galatsi, where in…

Leave a Comment

Your email address will not be published.