Last year NBG passed adverse stress test by e2bn, e3bn if you include tax law changes. Also if you look at what stress test predicted for credit provsions in 2014, the actual result was e0.4bn better and if you look at core PPI actual 2014 it was better by e0.7bn better than in stress test. So adjusting for actual 2014 performance the actual performance improves things by a further e1.1bn just adjusting to actual performance so far. The stress test also assumed a e1.7bn hit from Greek sovereign debt in the period 2014-2016. Assuming Greek gets a 3 year bailout to 2018 that seems unlikely as well. In fact with QE coming in Greece the private sector debt is likely to be big beneficiary as was case in Ireland.
I think the question will be which banks, if any, will need to be bailed in.
The fact that WSJ reported on Thursday that a European Commission memo about the directive says, Shareholders “should be severely diluted or wiped out” under a so called ‘bail-in’, which aims to stabilise a failing bank without the need for bailout by public funds.
Either way it will be a busy few months for short term and day traders.
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