Greece, IMF disagree on bank tests

Greece will release stress test results on its top banks this week without securing the agreement of the IMF, a source close to the talks said on Tuesday, in a further sign of disagreements between Athens and its international creditors. The stress tests determine the amount of fresh capital leading Greek banks need to cope with challenges such as mounting bad loans. Bank of Greece governor George Provopoulos earlier held an inconclusive meeting on the issue with the mission representing the country's creditors -- the European Union, International Monetary Fund the European Central Bank. "The thorn in the talks is the IMF estimate of 8.5-9 billion euros ($11.7-12.4 billion)," the source told AFP. According to reports, the Greek central bank estimates the top commercial banks need 5-6 billion euros, based on stress tests commissioned from private analysts BlackRock and confirmed by Ernst & Young and Rothschild as external advisors. The stress test results, to be released by Friday, were originally supposed to have been announced in December, and are separate from those to be conducted by the ECB this year as part of it taking over as the eurozone's banking supervisor. They have held up a planned capital increase by Eurobank, one of the four main lenders, which was recapitalised with state funds last year. Eurobank's chief economist Gikas Hardouvelis recently noted that Greek banks are fully capable of raising 6-8 billion euros in capital from the markets. All four of Greece's main lenders -- National Bank, Piraeus, Alpha and Eurobank -- were recapitalised as part of the Greek bailout. A sum of 50 billion euros from Greece's EU-IMF rescue loans was earmarked for their recapitalisation after heavy losses suffered by Greek banks taking part in a writedown of privately-held Greek government bonds last year. EU, IMF and ECB officials are currently conducting an audit of Greek finances that will determine whether Athens gets billions more in bailout loans, with Greece facing debt repayments of 6.6 billion euros ($9 billion) by next month.