Stress test scenarios to be released

The European Banking Authority is scheduled to release the macroeconomic scenarios for European banks’ stress tests on Wednesday, although certain sources say this may be postponed until the end of the week.

The announcement will include the scenarios for the Greek banks, and they are expected to show to what extent the European Central Bank is optimistic (or not) about the Greek situation, largely determining the results of the exercise.

The EBA will announce the baseline and adverse scenarios on which the tests will be based, including estimates for the Greek economy in the period from 2018 to 2020 concerning the growth rate and the course of unemployment and property prices (both commercial and residential).

Local bank officials appear quite optimistic, saying that the new test will take place in a radically improved environment for Greece and its banks. Crucially, lenders had managed to reduce their nonperforming loans portfolios by end-2017 by even more than the ECB had asked them, while there has been a considerable increase in the number of borrowers who are actively seeking a solution to their debt problem since the start of online auctions late last year.