Thursday March 26, 2015 Search
Weather | Athens
14o C
09o 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)  
Bank deposits lost another 7.6 billion euros last month
Cash concerns keep Athens bourse action tight
Athens among top tourism destinations
High prices weigh on local organic market
Greek defense minister heads to USA after controversy
Defense Minister Panos Kammenos heads to New York this weekend for Greek Independence Day celebrations after finding himself at the center of a controversy that led to the US Congress failin...
Police find Xeros’s bomb-testing spot
Counterterrorism officers investigating the apparent links between November 17 convict Christodoulos Xeros and jailed members of Conspiracy of the Cells of Fire believe a plot of land in Neo...
Inside News
BASKETBALL
Reds survive KAO Dramas scare in Piraeus
KAO Dramas gave depleted Olympiakos a scare at the Peace and Friendship Stadium on Monday, but the league leaders eventually managed to get their 20th win in 21 games. The Reds won by 10 (72...
SOCCER
Olympiakos within reach of the Super League title
Olympiakos needs just two wins in its six remaining games to clinch another Super League title mathematically, as it enjoyed another easy home win on Sunday while its rivals lost on the road...
Inside Sports
COMMENTARY
A competent crew is key
Greek politicians are mostly strangers to technocratic management and deft bargaining. The political system has regrettably unraveled the country’s public administration – a process set in m...
EDITORIAL
A new rule book agreed by all
This country needs to introduce a code of conduct regarding people from outside of politics who are appointed to government positions. In fact, it would be good if that rule book were agreed...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. Greek defense minister heads to USA after controversy
2. Police find Xeros’s bomb-testing spot
3. Judges send 32 to trial for kickbacks in submarine deal
4. Greek, Chinese FMs discuss deepening countries’ ties
5. Eight suspects arrested for alleged social security fraud
6. Skouries miners accuse municipality of opposing project
more news
Today
This Week
1. Greece optimistic on deal with euro area next week
2. Opposition renews calls for minister to resign over legal cases
3. Greek foreign minister explores deepening of ties with China on Beijing visit
4. New Xeros safe house found near Athens, police say
5. Stathakis against scrapping tax breaks for islands
6. Fed's Bullard: Grexit would be a Greek issue, not a euro issue
Today
This Week
1. Bringing the beast to heel
2. Total victory is unattainable
3. Next Monday is D-Day for state funds
4. EU asks Greece for more reforms to speed talks on bailout
5. PM faces Merkel amid race to detail reforms
6. IMF said to consider Greece most unhelpful client in history
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2015, H KAΘHMEPINH All Rights Reserved.