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September gives the start of the Greek banks' recapitalization

01 September 2012 / 20:09:41  GRReporter
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The case of the TT Hellenic Postbank is added to the case of Emporiki Bank and this will accelerate in the coming days the ways to transform the banking system. This process will occur, provided that there is an agreement between the government and the Troika but their views up to now are different.

Sources from the Ministry of Finance stressed that the case of the TT Hellenic Postbank is urgent, but can be solved immediately, since the candidates (the National Bank, Alpha Bank, Eurobank) are the same as for the Emporiki Bank. First, the issue of the purchase of Emporiki by Credit Agricole needs to be solved, then the one with the Postbank.

Meanwhile, a decision is sought about the publication of the TT Hellenic Postbank's balance. In the best scenario, it is expected to happen in the beginning of the week and parallel with it to have some kind of "security" by the state about the operation of the bank and about ensuring the rights and claims of depositors and creditors.

The pressure for a decision arises due to the fact that the bank cannot be recapitalized by the Fund for financial stability, since the Troika considers it as belonging to the credit institutions which are controlled by the state. This is due to the fact that the state controls, directly or indirectly, 44.5% of the shares - 34.5% through government bonds and the remaining 10% - by the Greek Post. Therefore, the TT Hellenic Postbank needs capital, which the state cannot, and according to the information, does not want to cover.

The Ministry of Finance believes that the only solution is the sale of a private institution. The disagreements they have with the Troika, are whether this sale will also follow the scenario of the Agricultural Bank ATE (i.e. "splitting" the bank of a bad and a good one) or the sale together with the bank, as it is today. The Treasury insists that the bank is healthy and the creation of a bad bank is not necessary.

Exactly in this direction proposals by the interested banks have been examined and a development on the issue is expected. On the other hand, representatives of the European Union, the International Monetary Fund and the European Central Bank reckon that the bank will have to be healed completely before it moves to the private sector and in this sense, there must be a bad bank for the TT Hellenic Postbank as well.

Meanwhile, at his meeting yesterday with President Karolos Papoulias, the Governor of the Bank of Greece Giorgos Provopoulos confirmed the attempts to change the conditions in the financial and the credit sector. In response to a question from the president, he said that he belongs to the people who believe that things need to move more and more quickly and aggressively, but there is some movement and that is something positive. According to Giorgos Provopoulos, there is a rearrangement of forces in the banking sector, which together with the recapitalization that has already begun, will create a more robust and efficient banking system. The Bank of Greece's Governor stressed that soon the European Central Bank will take over the supervision of the European banks and this will be positive for the Greek banking sector as well.

Yesterday, Finance Minister Yiannis Stournaras, during the parliamentary control, sent a message to the banking system that the survival of the economy goes together with the bank consolidation. In response to criticism from SYRIZA's deputy Panagiotis Lafazanis on the privatization of the Agricultural Bank ATE and the termination of negotiations about the TT Hellenic Postbank, the minister said that if there are no changes in the banking system, it will be destroyed and noted that neither the Greek economy can enter the market, nor its banks. Yesterday, Finance Minister Yiannis Stournaras said that the TT Hellenic Postbank is not broken, but on the contrary, its operation and investments are being provided. The Finance Minister stressed that the restructuring of the banking sector has begun and the government's aim is the problems of the Greek economy to be solved calmly, without consequences on employment and living standards. In turn SYRIZA's deputy rejected the claim that the TT Hellenic Postbank is viable, saying that there is no such information. According to him, this is done in order to sell the fund to private institutions.

By 15 September the decisions of Credit Agricole about the Emporiki Bank are expected, and over the next ten days the results of the talks between Piraeus Bank and Societe Generale are also awaited. September is shaping up as a critical month for the sector when the recapitalization's frameworks will be ready. The following fields of activity for the Greek Bank and the Financial Stability Fund are the small and the medium-sized banks - Attica Bank, Probank, FBBank, and Proton Bank, where the capital requirements are lower. The proposed solution is joining them to the big banks.

Tags: recapitalization banks TT Hellenic Postbank Emporiki Alpha Bank Provopoulos Stournaras
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