Banks? Q3 results to trigger action
The local banking system is bracing for major developments once the lenders have issued their third-quarter results, as this will start the countdown to their recapitalization.
By the end of the month the banks will have to publish the results which will crucially record the effect of the application of the expanded Private Sector Involvement plan, providing for a 50 percent haircut on Greek bonds.
Already some European banks announcing their results are cutting their positions in Greek bonds by 50 percent, while in some cases, such as that of Credit Agricole, they are proceeding to an even greater haircut, of 60 percent.
Sources suggest that local bank administrations are considering the possibility of not factoring in their losses from the Greek state bonds before the end of 2011. They make the point that significant technical aspects of the agreement are yet to be concluded and are hoping that the Institute of International Finance could secure them a more favorable deal than that for foreign bondholders.
