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Recession and bonds led to losses for banks

02 June 2012 / 17:06:16  GRReporter
4565 reads

"These losses will have to be covered either by cutting elements of the bank’s liabilities or through recapitalization with funds that will be requested from European partners and the International Monetary Fund. The final price for paying for these new funds will have to be borne by the state budget, i.e., again by the goodhearted Greek taxpayer, which will lead to a new debt increase. Given that today only half of the Greek citizens have loans, and about 80 percent of them are paid on time, favoritism of some of the creditors without specific criteria and procedures will cause a major redistribution of income and serious injury for those who have loans and/or are strictly performing their duties despite the difficulties. In the business sector, however, a similar action can distort competition. The consequences of such developments will be particularly negative, as this will allow more borrowers to default on their obligations. This in turn will have dramatic negative consequences for the economy, development and employment in the country," noted Eurobank’s research.

Tags: recession economic crisis losses capital adequacy Fund for Financial Stability
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