NEWS

Gov't says speculation behind sharp drop in bank shares

TAGS: Politics, Banking

A big sell-off in Greek banking shares in the Athens Stock Exchange on Wednesday was the result of “speculative pressures” and do not reflect the fundamentals of the sector, the government said.

The banking index plunged more than 17 percent in intraday trading to end 8.78 percent lower.

The news of the latest bank share debacle prompted Prime Minister Alexis Tsipras to convene an emergency meeting on Wednesday afternoon with leading government officials.

Participants in the meeting, including Finance Minister Euclid Tsakalotos, Minister of State Alekos Flambouraris and Deputy Prime Minister Yiannis Dragasakis, were in agreement that the slide in the shares of banks “is not a reflection of their fundamental health,” a press release from the prime minister's office said.

“Therefore, the Greek government considers that the situation is due to speculative pressures and therefore it is closely monitoring developments,” it added.

The office also cited the successful outcome of the stress tests in May of banks, their high capital adequacy ratios, their success in surpassing targets to reduce NPLs in the first half of 2018, an increase in bank deposits and the significant reduction of lenders' dependence on Emergency Liquidity Assistance (ELA).

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