Greece Seeks Lower Bank Capital Target
Wednesday, 22 January 2014
Greece wants its international lenders to agree to a lower capital ratio for its big banks so there is money left over in its bank rescue fund to help to plug the country's funding gap, Reuters reported, quoting bankers.
"There are talks between Greek authorities and the troika on whether the required capital adequacy ratio (known as Core Tier 1) can be reduced to 8 from 9 percent," Reuters quoted a banker close to the talks as saying. "Athens wants the required Core Tier 1 ratio lowered to 8 percent as is the case with European banks," he added.
A lower capital ratio would mean the banks need less cash, saving Greece money now, but potentially making it harder for them to attract new private owners. However, the government wants to be able to tap part of the money left over in the Greek bank bailout fund to reduce its sovereign funding gap this year and next.
Last week, the country's central bank said the banks were likely to need more capital after the latest stress test. The results of the test are expected by the end of January.