European Central Bank hints at stress tests for Greek banks to start next year
The European Central Bank (ECB) yesterday hinted that it could agree to the onging demand by the International Monetary Fund (IMF) for a review of the local credit sector as it was announced that Greek banks will undergo their stress tests earlier than their European Union peers are put through theirs next year.
ECB President Mario Draghi told the European Parliament that it was willing to show some flexibility: “What the Single Supervisory Mechanism plans to do next year is to have a stress test, possibly frontloading the stress test, and basically the SSM sent a letter to the IMF concerning exactly this expected line of action,” he said. ECB Executive Board member Benoit Coeure also discussed the issue and assured the IMF that the ECB will remain open to its demands, saying: “The discussion with the IMF is open, so that we make it work in a way that will cover the concerns of the Fund.”
The ECB aims to bring the process forward for the Greek banks to February of next year so that if any capital shortfall is identified it can be covered through a recapitalisation process as part of the ongoing bailout program.