Greek bank test results still due in May despite EBA delay, says source

The European Central Bank’s stress test of Greek banks is still expected to be finalized in May, despite a delay in the Europe-wide exercise, a source familiar with the situation told Reuters on Thursday.

The European Banking Authority announced earlier this week that it would only publish stress test results next November, several months later than in previous years, as banks need time to implement new accounting standards, called IFRS 9.

But Greece is due to exit its 86 billion euro (£75.7 billion) bailout in August, so an early bank sector health check is needed there to ensure there would be enough time to recapitalize lenders if the exercise uncovered a capital shortfall.

Indeed, the ECB, which supervises the biggest banks in the euro zone, has already said it would bring forward the Greek test, partly on the request of the International Monetary Fund.

“It is not expected to affect the timeline for the stress test on Greek banks,” a person familiar with the situation told Reuters, referring to the EBA delay.

Given the EBA’s delay, the Greek test will be part of a separate exercise and would follow a separate timeline, the source added. [Reuters]