Greek banks able to tap investors after stress tests, HFSF Says

Marcus Bensasson, Nikos Chrysoloras & Christos Ziotis

Greece is unlikely to have to inject more money into its banks during the European bank stress tests this year, helping to boost the nation’s public finances, top executives at the Hellenic Financial Stability Fund said.

Money managers including Paulson & Co., Fairfax Financial Holdings Ltd. and Fidelity pumped 8.3 billion euros ($11 billion) into Greece’s four biggest banks in the first half of this year. Institutional investors may again be called on to inject money if the European Central Bank’s own tests in October conclude more is needed, HFSF Chairman Christos Sclavounis said.

“They could be expected to provide the funds,” he said in a July 15 interview at the fund’s office in Athens.

The government-owned HFSF is the biggest shareholder in Greece’s four biggest banks. It was created in 2010 during the country’s debt crisis to prop up lenders that were bleeding deposits and shut out of interbank funding markets. The turmoil culminated in a 240 billion-euro ($338 billion) bailout from the European Union and International Monetary Fund and the biggest debt restructuring in history.

The HFSF may now be poised to return the 11.5 billion euros it has left from the 50 billion euros it received as part of the country’s international aid package. Greek government officials have pushed for those funds to be used to close a financing gap in the country’s bailout program, which the IMF last month estimated at 12.6 billion euros for 2015.

Goal achieved

“Our strategic target has been to have the a market open for Greek banks so they can cover their capital and liquidity needs and I think that’s a goal that...