IMF’s Thomsen indicates shift in Fund’s position on Greek banks

Poul Thomsen, the head of the International Monetary Fund's European department, has pointed to a shift in the Fund's position on Greek banks. 

While IMF officials have been indicating that a further recapitalization of Greece's banks is probably necessary, with Thomsen himself calling for an injection of some 10 billion euros and an asset quality review (AQR), the position now appears to be different.

"On the subject of the Greek banking system, let me emphasize that we see no financial stability concerns at all in Greece," Thomsen told the Financial Times Investment Management Summit in London on Thursday. 

However, he stressed that Greece must ensure it has a medium-term strategy for the management of non-performing loans. "We need to be sure that there is a strategy to deal with Greece's exceptionally high level of non-performing loans over the medium term," he said. "In this regard, we had suggested to update the 2015 asset quality review by next spring," he said, addding that the European Central Bank's proposal to bring forward already planned stress tests and undertake targeted asset reviews, without having to go through a full asset quality review (AQR), was constructive.

In an interview with ANT1 channel on Wednesday, Greek Finance Minister Euclid Tsakalotos claimed that Greece will not require greater surveillance than that foreseen by the Eurozone's Single Supervisory Mechanism (SSM) and that the matter will be clarified by Friday. 

Thomsen's statements came just a few days after ECB President Mario Draghi told members of the European Parliament that Frankfurt is willing to show some flexibility on Greece. “What the [SSM] plans to do next year is to have a stress test, possibly frontloading the stress test, and basically the SSM sent a letter to the IMF concerning exactly this expected line of action,” he said.