By E. Sakellari
[email protected]
IMF auditors are expected back in Athens at the end of this month, with the focus now directly on the financial state of Greece's thrice recapitalized systemic banks.
The timing of the latest arrival by the IMF's experts is considered as crucial, given the very ambitious targets that domestic lenders have to meet in order to reduce the "bad debt" burdening their ledgers, and the recent less-than-spectacular results they posted. Speculation that another capital infusion is necessary was rife in the Greek capital over the recent period.
If Greek banks turn to the markets for capital, they'll face a risk of less than favorable spreads, as shown by yields accompanying the benchmark 10-year Greek bond.
Nevertheless, credit rating firms and creditors are reportedly pressing for the Greek state to again seek sovereign borrowing, regardless of markets' current volatility, citing two main arguments:
- the need for the country to return to normality, and,
- the fact that the exact "right time" remains unknown.
As far as repercussions on Greek banks from the state's prospective exit to the markets, something would-be investors will take into consideration, banking analysts point out that the four systemic banks must eventually cover their need for new capital from the markets, and not from any other source.
