Re­cap bill to be voted to­mor­row

Cap­i­tal con­trols rule lo­cal in­vestors out of the process, with lenders turn­ing to for­eign in­sti­tu­tion­als

Kathimerini English - - Focus - BY YIAN­NIS PAPADOYIANNIS

Greek in­vestors are in ef­fect ruled out of the re­cap­i­tal­iza­tion process for lo­cal banks, as the cap­i­tal con­trols pre­vent their par­tic­i­pa­tion, while the bill for the process was set to be tabled late yes­ter­day in Par­lia­ment and will be voted to­mor­row.

Sources add that the ad­min­is­tra­tions of cer­tain banks are con­sid­er­ing ad­dress­ing only for­eign in­stitu- tional in­vestors due to the tight timetable.

Just hours be­fore the Euro­pean Cen­tral Bank an­nounces the stress test re­sults to­mor­row, there is op­ti­mism among lenders re­gard­ing the level of their cap­i­tal re­quire­ments.

How­ever, they are not hid­ing their con­cern about the par­tic­i­pa­tion of bond­hold­ers in case of a bail-in, as well as the way the share cap­i­tal in­creases will take ef­fect, as th­ese fac­tors may keep vestors away.

A Reuters re­port has put the es­ti­mated sum of cap­i­tal re­quire­ments for the coun­try’s four sys­temic banks at 14 bil­lion eu­ros, ac­cord­ing to the ex­er­cise’s ad­verse sce­nario. How­ever, when the re­struc­tur­ing plans are fac­tored in, the re­quire­ments of banks ac­cord­ing to the base­line sce­nario (which lenders will have to cover) come to just 4.5 bil­lion eu­ros. A Gold­man Sachs re­port put

in- the sum of lo­cal banks’ cap­i­tal needs at be­tween 13 and 20 bil­lion.

Yes­ter­day Deputy Prime Min­is­ter Yianns Dra­gasakis in­formed Pres­i­dent Prokopis Pavlopou­los about the re­cap process, stress­ing that the law will have been voted in time for the share cap­i­tal in­creases to be­gin on Mon­day, Novem­ber 2.

“Our pri­mary tar­get is to per­form the re­cap­i­tal­iza­tion in a way that does not af­fect de­posits, which means it will have to be com­pleted

1.0930 within 2015, as from next year the direc­tive im­pos­ing a hair­cut on de­posits above a cer­tain level will come into ef­fect,” said Dra­gasakis.

He also noted that there is in­vestor in­ter­est in the Greek banks, but there are also the dis­pos­able funds of the Hel­lenic Financial Sta­bil­ity Fund to cover any needs that may emerge. The pre­vi­ous re­cap failed be­cause they did not tackle the is­sue of bad loans, he com­mented.

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