Flurry of contacts leads to IMF converging with the ECB

The International Monetary Fund has retreated from its demand for an asset quality review (AQR) of Greek banks, according to statements made on Thursday in London by the head of the IMF's European Department, Poul Thomsen. The Washington-based Fund insists, however, that a medium-term strategy is needed to tackle the issue of bad loans.

"On the subject of the Greek banking system we see no financial stability concerns at all in Greece," said Thomsen. He added that the European Central Bank's proposal to bring forward the already planned stress tests and undertake targeted asset reviews, without having to go through a full AQR, was constructive.

The compromise reached between the Fund with the ECB was not easy. It followed plenty of behind-the-scenes contacts, led by ECB President Mario Draghi, who put his weight behind averting the IMF call for an AQR from becoming a...