Len­ders eye in­ter­bank mar­ket

Bank of­fi­cials es­tab­lish con­tacts with top peers in Wash­ing­ton, but wor­ries about an­other re­cap per­sist

Kathimerini English - - Focus - BY YIANNIS PAPADOYIANNIS

Se­nior Greek bank of­fi­cials vis­it­ing Wash­ing­ton in the con­text of the An­nual Meet­ings of the World Bank and the In­ter­na­tional Mon­e­tary Fund have had con­tacts with ma­jor Euro­pean and US len­ders aimed at ex­pand­ing their fund­ing lines via the in­ter­bank mar­ket.

In­creased trans­ac­tions in the in­ter­bank mar­ket and the rise in de­posits in Greek ac­counts over the last five months have con­sid­er­ably im­proved the liq­uid­ity con­di­tions for lo­cal banks, as re­flected by their re­duced de­pen­dence on the emer­gency liq­uid­ity as­sis­tance (ELA) mech­a­nism.

The con­tacts with some of the world’s big­gest len­ders showed Greek of­fi­cials that Greece is no longer a ma­jor fo­cus of in­ter­na­tional con­cern and the fear of a Greek exit from the eu­ro­zone has re­ceded. Nev­er­the­less, the con­cern and un­cer­tainty over non­per­form­ing loans have not dis­ap­peared, while the up­com­ing stress tests and the risk of a new re­cap­i­tal­iza­tion are strength­en­ing wor­ries.

How­ever, this has not dis­cour­aged ac­tiv­ity in the in­ter­bank mar­ket or bond is­sues, such as that by Na­tional Bank this week, as banks of­fer col­lat­eral for such trans­ac­tions: loans of all cat­e­gories that are ser­viced nor­mally and are of­fered to in­vestors as guar­an­tee. The value of the loans used as col­lat­eral is sig­nif­i­cantly higher than the amounts banks draw.

All do­mes­tic banks have drawn con­sid­er­able liq­uid­ity from the in­ter­bank mar­ket in this way. Al­pha Bank, in par­tic­u­lar, has uti­lized a large part of its loan port­fo­lio through se­cu­ri­ti­za­tion: loans of large and medium-sized en­ter­prises, mort­gages and con­sumer 761.35 1.1810 loans as well as ship­ping credit have been se­cu­ri­tized, help­ing Al­pha draw 2 bil­lion euros through re­pos from the in­ter­bank mar­ket.

Dis­en­gage­ment from the ex­pen­sive ELA mech­a­nism is a top pri­or­ity for all len­ders, with Na­tional be­ing very close to this tar­get, hav­ing com­pleted the ma­jor­ity of divest­ments it had pledged to the Euro­pean Com­mis­sion and re­leas­ing sig­nif­i­cant liq­uid­ity in do­ing so.

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