ECONOMY

Bank Austria expects eurozone credit system to withstand Grexit shock

Bank Austria expects pressure on liquidity should Greece drop out of the eurozone but it also expects the eurozone credit system to withstand the shock.

Deputy Chief Executive and CEE head Carlo Vivaldi told reporters on Wednesday that he hoped Greece stays in the eurozone but this was for its citizens to decide.

A potential exit “would be very bad for Greece. For Europe and for the markets in general for sure there will be volatility,” he said.

But given Greece’s limited economic importance and the European Central Bank’s aggressive support of markets via bond buying, “I think in the mid-term this could be absorbed.”

Asked if Bank Austria had a contingency plan for a “Grexit,” he said: “There could be pressure on liquidity, and on the liquidity side in all the banks we are conservative…. We think we have a liquidity situation which is allowing us to absorb shocks, so for us the contingency plan is to be strong on the liquidity side,” the Bank Austria official added.

[Reuters]