IMF warns of systemic risk from 10 indebted Greek business groups

Rumors are circulating within the Greek business and stock markets regarding high levels of over-indebtedness among several major corporate groups. There are concerns that the potential failure of these entities could pose a “systemic risk” to the banking sector.

Reports suggest that the Single Supervisory Mechanism (SSM) may have informed the four systemic banks about a specific large business group whose debt levels approach its total market capitalization. Bankingnews has identified GEK Terna as a group in question, noting it has secured 4.3 billion euros in loans.

These concerns are supported by a May report from the International Monetary Fund (IMF) titled “Greece – Financial System Stability Assessment.” In paragraph 29 of the report, the IMF explicitly warns of ten large Greek business groups with dangerous levels of debt dependency on banks. The IMF notes that if financial difficulties were to occur simultaneously in more than one of these companies, it could exert “significant pressure on the banking system.”