HFSF chief reported to have resigned

Confusion followed the reported resignation on Friday of the recently appointed head of the Hellenic Financial Stability Fund (HFSF), Paul Koster, who cited personal reasons.

The Dutch manager had been appointed only a month and a half ago to replace Panayiotis Thomopoulos, but being based in Dubai, where his family also lives, he had been flying to Athens for meetings two to three times per month, which drew criticism due to his long absences. It was not immediately clear whether that was the actual reason for his decision to resign.

Reports suggested however Koster was under pressure to revoked his resignation on Friday night.

The HFSF, which will acquire majority stakes in all banks to be recapitalized, is an independent body whose management the Greek government has no influence over.

The news comes at a time when Athens is under pressure to help support the Cypriot credit system, which has been battered by its exposure to Greek bonds. While sources from Cyprus say that Greek and Cypriot technocrats are continuing to examine the possibility of reducing Cypriot lenders’ presence in Greece, with the final objective being the sale of one of the main Cypriot banks to a Russian entity, Greek officials deny that any such technical negotiations have started.

If the opportunity for the acquisition of Cypriot banks’ Greek branches does arise, it will be the HFSF that decides whether any of the banks under its control following the completion of the recapitalization process absorb the Cypriot-owned branches in Greece.

Meanwhile, National Bank of Greece said in a bourse filing on Friday that the Canadian investment fund interested in participating in the Greek group’s share capital increase is facing obstacles. Fairfax Financial Holdings’ interest in covering as much as 1.5 billion euros of the group’s capital needs “remains at an early stage, given the fact that it requires certain changes in the existing legal framework for the recapitalization of systemic banks which, in any case, lie beyond the competence of NBG,” the filing said.

Finance Minister Yannis Stournaras ruled out any changes to the lender’s recapitalization terms earlier this week, insisting on the original timetable of the process as provided by the country’s bailout agreement with its creditors.

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