ECONOMY

HFSF hopes for a speedy recap process

hfsf-hopes-for-a-speedy-recap-process

The Hellenic Financial Stability Fund (HFSF) expressed confidence on Wednesday that a bank bail-in will be avoided if, as is hoped, private investors cover the capital requirements to emerge from the asset quality reviews and stress tests.

Fund sources stress that any bail-in process in the bank recapitalization would set a very negative precedent for the eurozone, while making it much harder for Greek banks to return to the interbank market.

In a meeting with reporters on Wednesday, the head of the HFSF, Giorgos Michelis, and its managing director, Aris Xenofos, referred to the four main challenges that the fund has to face: the recap of the systemic banks, the strengthening of the banks’ administration, nonperforming loans and the role of the HFSF in the new privatizations fund.

They emphasized that the recap timetable is particularly tight, as the law on the operation of the HFSF must be passed within October, the stress tests results must be announced by the end of the month, and banks will need to find investors to cover their funding needs by December 15, as after that the markets will hibernate for the holidays.