Greece has won an important concession from the European Central Bank that could help its top four lenders pass a landmark review of the eurozone’s banking sector, three sources familiar with the process told Reuters.
The sources said Greece had convinced the ECB to take into account the banks’ restructuring plans in reaching its verdict on their finances, part of pan-European efforts to ensure banks are adequately structured in case of another financial crisis.
The ECB is testing whether banks have properly valued their assets and whether they have enough capital to withstand another financial crisis without taxpayer bailouts.
The results will be announced on October 26, before the ECB becomes the eurozone’s banking supervisor on November 4.
Greek officials had been pushing the ECB since July to row back from its original stance that the tests, covering 131 of the eurozone’s largest lenders, would only consider the impact of restructuring plans if they had been agreed with the European Commission by December 2013.
That was problematic because the latest restructuring plans of Greece’s four largest banks, who were recapitalized twice amid their country’s brutal six-year recession, were not agreed with the EC until June.
But the sources said the ECB had in recent weeks agreed to extend the deadline and take account of recently agreed plans by Piraeus, National, Alpha and Eurobank.
“They’ve promised to disclose a summary of the dynamic balance sheet and take it into consideration,” a source familiar with the talks said.