Tuesday October 21, 2014 Search
Weather | Athens
24o C
11o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Bankers set to oppose buyback plan

 Bond scheme is bereft of financial logic as it constitutes double borrowing, credit sector chiefs argue

By Yiannis Papadoyiannis

Bank managers are planning to express their opposition to the credit sector’s likely participation in the bond buyback program at a meeting with Finance Minister Yannis Stournaras scheduled for Thursday.

The administrations of all commercial banks are stressing that they cannot possibly participate voluntarily in a program that leads to the financial exhaustion of shareholders.

Senior bank officials told Kathimerini that besides the legal consequences of a possible voluntary participation, such a serious decision, which would signify a change in the lenders’ portfolios, cannot be approved by their governing boards alone. They underlined that such a decision would require discussion and approval at general shareholders meetings, but that would compromise the buyback plan as it is a process that takes time.

In their meeting with Stournaras the bank managers will ask for their exemption from the buyback and propose alternative solutions to the problem.

They will also request changes to the terms of the recapitalization process. The main point is how to reduce the amount of capital requirements, which could take place via the bond swap or through the guarantee of bank bonds by the European Financial Stability Facility (EFSF), which would allow for their valuation at their nominal value. That would reduce capital needs by 11 billion euros at once and render recapitalization much more attractive for private shareholders. The more funds private investors contribute in the recapitalization process, the less money the state will have to pay through the Hellenic Financial Stability Fund (HFSF).

Bank officials argue that the scheme proposed for the buyback process is bereft of financial logic as it constitutes double borrowing and additional burdening for taxpayers. By contrast, they say, the guarantee of bonds would have a better result at no additional cost. However these alternative plans were rejected by the representatives of the country’s creditors a few weeks ago and there is no sign of them changing their attitude on the issue.

Analysts say that banks are right to protest as in spring they were burdened by the 53.5 percent bond haircut and a few months later the state is asking to buy the bonds back at 30 percent of their value.

ekathimerini.com , Thursday November 29, 2012 (00:34)  
Think-tank says political uncertainty slowing investment in Greece
Tax debts to Greek state exceed 70 billion euros
Greek 2013 budget gap revised down to 1.8 pct/GDP
Greece said to seek tailor-made plan for bailout exit
Accomplice of Greece´s Number 1 fugitive arrested while trying to leave country
Self-styled anarchist Polykarpos Georgiadis, linked to Greece's Number 1 fugitive, was arrested at Athens International Airport on Tuesday while trying to board a flight to Brussels, in viol...
Trial over 2012 torture of Egyptian bakery worker in Salamina begins
The trial of four men accused of torturing an Egyptian bakery worker in 2012 on an island near the Greek capital, began on Tuesday in Piraeus after being postponed four times. Waleed Taleb w...
Inside News
BASKETBALL
PAOK fans stop coach Markopoulos´s move to Olympiakos
Olympiakos is once again in the lookout for a new coach after the refusal of PAOK to release Soulis Markopoulos, while Panathinaikos defeated Kolossos on Rhodes on Monday to become the only ...
BASKETBALL
Reds lose to Nea Kifissia, search for new coach
Nea Kifissia recorded the biggest win of its short history in the top flight defeating Olympiakos 68-67 on Sunday, in a Basket League weekend marred by the abandonment of the Thessaloniki de...
Inside Sports
INTERVIEW
The past, present and future of the Greek debt crisis
For a decade, until mid-2012, Josef Ackermann was the CEO at Deutsche Bank. It was a position that earned him the nickname “shadow chancellor” of Germany and allowed him to play a decisive r...
COMMENTARY
Self-opposing coalition
Even though a number of polls see the total percentage of the two ruling parties trailing that of SYRIZA, New Democracy and PASOK are still in government and the leftists in opposition. This...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Accomplice of Greece´s Number 1 fugitive arrested while trying to leave country
2. Think-tank says political uncertainty slowing investment in Greece
3. Trial over 2012 torture of Egyptian bakery worker in Salamina begins
4. Tax debts to Greek state exceed 70 billion euros
5. Greek 2013 budget gap revised down to 1.8 pct/GDP
6. Greece said to seek tailor-made plan for bailout exit
more news
Today
This Week
1. The past, present and future of the Greek debt crisis
2. Self-opposing coalition
3. Gang importing heroin into Greece busted
4. Gutsy rectors
5. Applications for heating oil subsidy set to start
6. SDOE to probe Proton Bank loan to Thessaloniki businessman
Today
This Week
1. Possible third figure in Amphipolis mosaic may be uncovered shortly
2. Greece to contribute 1 mln towards Gaza reconstruction
3. Greece nearing bailout exit, says gov't spokesperson after IMF talks
4. Istanbul skyscraper casts shadow over Greece's banking ambitions
5. Coalition shooting itself in the foot
6. GPO poll gives SYRIZA clear lead over New Democracy
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.