Banks must find 15 billion euros

The countdown for the recapitalization of domestic banks has started after BlackRock Solutions on Friday reported additional funding needs of about 15 billion euros for local lenders.

The US company, commissioned by the Bank of Greece to assess the loan portfolio of Greek banks, delivered its much-awaited report yesterday and the conclusion is that the recession has had a considerable impact on the country?s credit system.

Bank sources believe that the dramatic downgrade of the country?s growth prospects by its foreign creditors for 2012 and 2013 led to a significant toughening in the criteria used by BlackRock.

?It would appear that the picture is worse than we had originally estimated,? an executive official of a Greek bank said.

The report?s conclusions and the implementation of a deal on a Greek debt haircut will determine the sum of the additional capital requirements for local lenders, with the horizon being seen as the end of 2013. Bank of Greece officials are already processing the report?s data, with the results expected to reach the banks by the end of February.

Then it is up to commercial banks to submit plans to the central bank for their capital strengthening in order to cover their needs. They will include ways to find funds and a description of their new business plan in terms of how they will adjust to the new financial environment. These plans will need to be submitted and approved by the Bank of Greece by the end of April. Bain

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