Banks may get 3-billion-euro safety cushion

Greek banks are set to see their capital bases receive a considerable 3-billion-euro boost with the European Bank Authority’s recognition of their deferred tax assets by the end of the month.

In order to have the issue arranged, the Greek government has to table a legal regulation in the next few days, as it will need to be amended by the EBA by next Tuesday, September 30, in order to be factored into the lenders’ stress tests.

Bank officials told Kathimerini that the incorporation of the deferred tax assets will significantly increase local lenders’ chances of escaping unscathed from the stress tests, as their capital requirements will drop to low levels, allowing them to cover any shortfalls from the private sector.

That way, the Greek state is also more likely to retain intact the cash reserves of 11 billion euros from the recapitalization at the Hellenic Financial Stability Fund’s coffers.

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