Greek banks expect to escape an extra AQR

There will be no extraordinary asset quality review (AQR) of Greek banks, senior credit sector officials have told Kathimerini following the public statements by the European Central Bank and based on various high-level meetings. They also note that local banks may spend more than 10 billion euros of their operating profits in the next three years on reducing bad loans.

Besides recent statements by ECB board member Benoit Coeure and the ECB's Single Supervisory Mechanism Vice Chair Sabine Lautenschlaeger, who rejected the International Monetary Fund's call for AQRs, the meetings bank officials have had in recent days with the technical staff of the creditors show that the latter do not consider an AQR likely.

The Bank of Greece has worked hard to avert such a prospect, which might destabilize the sector, and notes that local lenders should instead be focusing on meeting...