Fitch warns of challenges for local credit system


Ratings agency Fitch said in a report issued on Tuesday that Greek banks still face multiple challenges.

The report warned that local lenders are likely to maintain material reliance on the European Central Bank’s emergency liquidity assistance (ELA) mechanism for most of this year.

They are also seen to remain highly vulnerable to any deterioration of the Greek operating environment due to their exceptionally weak asset quality, among other problems.

Fitch further highlighted that the continuing capital controls in Greece mean that the domestic banks’ issuer default ratings are likely to remain at Restricted Default (RD) in the near term.