Greek stocks fall on bank stress test worries
- October 31, 2014
The Athens stock market has fallen 3.6 per cent in trading, with
the banking index plunging 7.3 per cent over concern about the state of
the Greek economy.
The stock market has been under pressure since three Greek banks were found to be short of capital on Sunday under stress tests of eurozone banks by the European Central Bank.
The banks found wanting showed the biggest share price falls on Thursday, even though they have acted to fill the shortfalls.
Stock in Eurobank was down 7.14 per cent and in National Bank of Greece 8.0 per cent. Stock in Piraeus Bank was down 5.88 per cent.
And shares in the fourth-biggest bank, Alpha bank, which passed the tests, fell by 5.0 per cent.
Meanwhile the borrowing rate on Greek debt bonds shot up to more than 8.0 per cent. Such a high rate casts a cloud over how Greece will be treated on the debt market as it emerges from bailouts by the International Monetary fund, European Union and ECB.
On Monday, the main Athex index fell by 3.29 per cent and the bank index fell by 3.77 per cent.
Tuesday was a national holiday, and on Wednesday the main index lost 2.67 per cent and the bank index by 5.68 pe rcent.
The stress tests found that Eurobank and National Bank of Greece were short of capital at the end of last year. Piraeus Bank also failed but has since improved its balance sheet and is no longer on the list of 25 banks across the eurozone which were short of capital at the end of December.
Eurobank needed 1.76 billion euros ($A2.64 billion) of new capital and National Bank of Greece 930 million euros.
However, the ECB also said that allowing for financial operations under way, Eurobank had almost dealt with its need for extra funds and National Bank of Greece had dealt with its problem.
The Greek central bank, which had welcomed the results of the tests on Sunday, repeated this view on Monday, saying that none of the four banks had a problem over capital.
The stock market has been under pressure since three Greek banks were found to be short of capital on Sunday under stress tests of eurozone banks by the European Central Bank.
The banks found wanting showed the biggest share price falls on Thursday, even though they have acted to fill the shortfalls.
Stock in Eurobank was down 7.14 per cent and in National Bank of Greece 8.0 per cent. Stock in Piraeus Bank was down 5.88 per cent.
And shares in the fourth-biggest bank, Alpha bank, which passed the tests, fell by 5.0 per cent.
Meanwhile the borrowing rate on Greek debt bonds shot up to more than 8.0 per cent. Such a high rate casts a cloud over how Greece will be treated on the debt market as it emerges from bailouts by the International Monetary fund, European Union and ECB.
On Monday, the main Athex index fell by 3.29 per cent and the bank index fell by 3.77 per cent.
Tuesday was a national holiday, and on Wednesday the main index lost 2.67 per cent and the bank index by 5.68 pe rcent.
The stress tests found that Eurobank and National Bank of Greece were short of capital at the end of last year. Piraeus Bank also failed but has since improved its balance sheet and is no longer on the list of 25 banks across the eurozone which were short of capital at the end of December.
Eurobank needed 1.76 billion euros ($A2.64 billion) of new capital and National Bank of Greece 930 million euros.
However, the ECB also said that allowing for financial operations under way, Eurobank had almost dealt with its need for extra funds and National Bank of Greece had dealt with its problem.
The Greek central bank, which had welcomed the results of the tests on Sunday, repeated this view on Monday, saying that none of the four banks had a problem over capital.