ECONOMY

Eurozone banks’ body in ‘close contact’ with Greek counterparts

The eurozone’s body for dealing with failing banks said on Tuesday it was in close contact with Greek regulators as the country’s banks face tough times.

“Greek banks are living in a challenging economic environment,” Elke Koenig, chairman of the Single Resolution Board (RRB), told the European Parliament.

“But the promising part of that is they have a very engaged and very active resolution team. We are in close contact with our Greek colleagues,” she added.

From January 2016, the SRB will be responsible for dealing with any failures among the eurozone’s top 150 lenders.

Greek banks were some of the biggest decliners among European equities on Monday and suffered deposit outflows of about 400 million euros ($449 million) as the pace of daily withdrawals picked up from last week, bankers said.

Koenig said the Greek authorities are responsible for dealing with any national banking failure during 2015 though the SRB will be in charge of any collapses among the top four Greek banks from 2016.

Last week rating agency Standard & Poor’s cut its ratings on several banks across Europe but Koenig said she was “not concerned” about this.

The downgrade reflected a belief at the rating agency that governments won’t be willing to bail out banks if they get into trouble, she said.

“It’s reflecting they really believe in bail-in,” Koenig said, referring to new rules that force a bank to hold bigger capital and debt cushions to shield taxpayers from having to intervene in a crisis.

[Reuters]