THERE has been no haircut on
It was refuting a "completely misleading" report by local daily Simerini that claimed the
Simerini's claim even prompted public remarks by DIKO leader
The CBC was swift in responding to the article, saying the paper's reports relate to the methodology formulated by the EBA for the adverse scenario of the stress tests.
"It is pointed out that this refers to the level of hypothetical losses that will be estimated merely for the purposes of the stress test," the CBC's statement said. "This specific parameter [of sovereign debt write-down] will apply to all EU countries and all banks that hold government bonds in their books at nominal value. The write-down level is based on each country's credit rating."
The Public Debt Management Office was also unequivocal in dismissing the claims made in Simerini's piece.
"This decision in no way affects the nominal value of government bonds or investors' rights," the Finance ministry department said. "It must be noted that
The stress tests are carried out by the EBA, in coordination with the ECB, in preparation of the assumption of supervision of banks across the Eurozone at the end of the year. Stress-test results are expected in
Under the stress test parameters as laid out by the EBA, in order to pass banks must show that their core-tier 1 capital ratio will not fall below 5.5 per cent in a severe economic crisis – the adverse scenario – and 8 per cent under normal circumstances – the baseline scenario.
As Georghadji clarified at a news conference on Wednesday, banks will have to cover capital shortfalls under the baseline scenario within six months and nine months under the adverse scenario.
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