Mr. Poul Thomsen, Director of the European Department, underscored the IMF's faith in the Greek economy, backtracking on earlier negative statements.
Mr Thomsen made the following statement at the FT Investment Management Summit in London on Thursday:
On the subject of the Greek banking system, let me emphasize that we see no financial stability concerns at all in Greece. The issue is that we need to be sure that there is a strategy to deal with Greece’s exceptionally high level of nonperforming loans over the medium term.
In this regard, we had suggested to update the 2015 asset quality review (AQR) by next spring. The European Central Bank (ECB) has instead proposed bringing forward the already scheduled stress tests and undertaking targeted asset reviews, suggesting that this will allow us to gather the information necessary to assess whether the current strategy for ensuring the soundness of the banking system is adequate, without having to go through a full asset quality review (AQR).
We think that this is a constructive proposal that achieves the same broad objectives, and we are now discussing the exact modalities with our colleagues at the ECB.