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Greek Central Bank Head sees no risk of haircut on deposits

George Provopoulos, Head of the Central Bank of Greece

Greek banks are well capitalised and savers face no risk of seeing the value of their deposits trimmed, the country’s central bank chief said, financial daily Imerisia reported on Thursday.

“There is no chance of a haircut on deposits in the foreseeable future, given that banks have not yet made use of significant capital buffers and will create additional ones from the sale of non-core banking activities,” George Provopoulos was quoted as saying.

His comments were made at a briefing with bank employee union representatives on Wednesday.

The country’s top four banks were recapitalised with 28 billion euros ($38.6 billion) earlier this year to shore up their solvency ratios after losses from a sovereign debt writedown and bad loans.

They are undergoing stress test by BlackRock, the results of which are expected by the end of the year.

The tests on the four largest lenders, all majority-owned by Greece’s bank rescue fund Hellenic Financial Stability Fund (HFSF), are being carried out to check if this summer’s recapitalisation has left the banks capable of dealing with future shocks.

Provopoulos will meet with BlackRock’s CEO Lawrence Fink on Thursday, an official at the central bank said.

Banks in Cyprus were shut for nearly two weeks in March after the island agreed a 10-billion-euro bailout, which forced major depositors to pay part of the cost of the rescue.

Capital controls are still in place on the island, with limits on how much people can transfer from their accounts. Cyprus is gradually easing the controls.

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