16/01/2013 07:48
The finalization of Pimco’s report on the capital needs of the banks remains uncertain, since yesterday’s meeting of the Steering Committee was not enough to restrict differences among the sides.
According to sources collected by StockWatch, there are still 6-7 points of deviations on the table, mostly focusing on the extreme scenario of Pimco for the banks.
Cypriot authorities and international creditors agree that the data in front of them is not enough to finalize the calculation of capital needs for banks by 2015 and asked by Pimco to open the "black box" of its calculations.
On both sides there seems to be dissatisfaction with the lack of information in relation to the calculation of the losses in the banks’ credit portfolios in the next three years, in the event of an adverse scenario.
They demand information on the calculations made for each bank and for each category of loan, both in Cyprus and Greece.
Talks will continue today and according to indications, a draft final report might be prepared- not a binding final report - until the Eurogroup on 21 January.
Pimco expressed willingness to give all the information that both sides say they are absent from the calculations, and if there is time, its officers that are currently in Cyprus will meet privately with the banks to submit their findings.
The terms of reference seem to have a constructive ambiguity about whether Pimco’s analysts should discuss with the banks about their precise findings.
The effort, however, of the U.S. company to have some kind of compromise at various points did not find the necessary respond, since both the Cypriot authorities and the international creditors did not hide their concerns about the depth of information given to them.
The adverse scenario talks about € 10billion, an expert said, while previously it had been known that the baseline scenario is close to €6,5 billion.
Yesterday, the President of the Republic asked by the European Commission the original loan to be granted to Cyprus to be based on the basic scenario, so there is no debt sustainability issue.
If support reaches €10 billion, the debt is estimated to reach 150% of GDP in 2014.
The apparent delay in finalizing the amount makes the discussion of the Cypriot memorandum at Eurogroup on Monday difficult, but no final decision would arise on Cyprus anyway.
The statements by European officials and the Cypriot president refer to a conclusion of the negotiations in March, after the elections, and after having cleared the way that any additional needs resulting from the due diligence will be covered.
The German Finance Minister reportedly said yesterday that the support package should include the participation of Russia, but he did not clarify what he meant. As we know, there are talks with Russia on the elongation of the 5-year loan received by Cyprus in 2011 until 2021 and indications are positive.
According to sources collected by StockWatch, there are still 6-7 points of deviations on the table, mostly focusing on the extreme scenario of Pimco for the banks.
Cypriot authorities and international creditors agree that the data in front of them is not enough to finalize the calculation of capital needs for banks by 2015 and asked by Pimco to open the "black box" of its calculations.
On both sides there seems to be dissatisfaction with the lack of information in relation to the calculation of the losses in the banks’ credit portfolios in the next three years, in the event of an adverse scenario.
They demand information on the calculations made for each bank and for each category of loan, both in Cyprus and Greece.
Talks will continue today and according to indications, a draft final report might be prepared- not a binding final report - until the Eurogroup on 21 January.
Pimco expressed willingness to give all the information that both sides say they are absent from the calculations, and if there is time, its officers that are currently in Cyprus will meet privately with the banks to submit their findings.
The terms of reference seem to have a constructive ambiguity about whether Pimco’s analysts should discuss with the banks about their precise findings.
The effort, however, of the U.S. company to have some kind of compromise at various points did not find the necessary respond, since both the Cypriot authorities and the international creditors did not hide their concerns about the depth of information given to them.
The adverse scenario talks about € 10billion, an expert said, while previously it had been known that the baseline scenario is close to €6,5 billion.
Yesterday, the President of the Republic asked by the European Commission the original loan to be granted to Cyprus to be based on the basic scenario, so there is no debt sustainability issue.
If support reaches €10 billion, the debt is estimated to reach 150% of GDP in 2014.
The apparent delay in finalizing the amount makes the discussion of the Cypriot memorandum at Eurogroup on Monday difficult, but no final decision would arise on Cyprus anyway.
The statements by European officials and the Cypriot president refer to a conclusion of the negotiations in March, after the elections, and after having cleared the way that any additional needs resulting from the due diligence will be covered.
The German Finance Minister reportedly said yesterday that the support package should include the participation of Russia, but he did not clarify what he meant. As we know, there are talks with Russia on the elongation of the 5-year loan received by Cyprus in 2011 until 2021 and indications are positive.
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