Greek finance minister expresses confidence in banking sector

09:40, July 24, 2010      

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Greek Finance Minister George Papaconstantinou expressed confidence in the Greek banking sector Friday after the announcement of the results of stress tests on Greek banks.

Six Greek banks took part in the stress tests conducted by European Union experts on 91 European banks in total, among which only ATEbank failed.

Experts of the Committee of European Banking Supervisors checked if banks across Europe can overcome more pressures due to the international economic crisis in the near future.

The result is regarded positive by Greek officials and analysts, since the Greek banking sector is under enormous pressure since the outbreak of the Greek debt crisis in late 2009. "The results are positive and prove that the Greek banking system can tackle even more difficult conditions than the current one," said Papaconstantinou in a first official reaction.

He added that in order to protect the good health and stability of the Greek banking sector, the Central Bank of Greece is in touch with all Greek banks participating in the stress tests to evaluate the outcome and examine the possibility of raising capital.

State-controlled ATEbank is given a deadline by the Greek government until Dec. 31 this year to make and implement a viable plan to face challenges. "The Greek government guarantees ATEbank's credibility," underlined Papaconstantinou.

Greek analysts added that after Friday's test ATEbank will have to seek new capital up to 240 million euros (307.6 million U.S. dollars) or the Greek government will have to examine more carefully the offer made recently by Greek commercial Piraeus Bank to buy ATEbank and also state-controlled Greek Postbank.

After a cabinet meeting held earlier on Friday afternoon, Papaconstantinou announced that next week the Greek government will appoint two or three advisors to suggest the next moves Greek state should make in the banking sector and a better management of its vast real estate property.

Greek media stressed that this decision paves the way for mergers and privatizations of Greek banks.

Athens also has the option to financially assist ATEbank from a 10 billion euros (12.8 billion U.S. dollars) Financial Support Fund created last month in the framework of the 110 billion euros (140.9 billion U.S. dollars) safety net which was activated by the European Union and the International Monetary Fund for debt-ridden Greece.

Representatives of the rest of the six Greek banks which passed the EU stress tests voiced satisfaction on the results and more optimism for the future of the banking sector in Greece.

Source: Xinhua


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