Is the banking sector stable?
The current capitalization of the Greek banking system is saatisfactory. It is a traditional banking system that was not exposed to the toxic products that had threatened some other banking systems. The authorities’ objective under their program is to ensure that banks remain adequately capitalized and have adequate access to liquidity, including to emergency facilities. The new Financial Stability Fund – with capital of €10 billion – established under the program will help ensure a sound level of bank equity even under unfavorable circumstances. The extension of the government’s existing support facilities and the ECB’s decision to ease access to refinancing should also alleviate concerns about financing.
