Stocks rose sharply on Monday as Treasury yields rebounded, quelling fears of a possible recessionUS Marketsread more
The Business Roundtable, a group of CEOs of nearly 200 major U.S. corporations, gave a new definition of the "purpose of a corporation."Marketsread more
J.P. Morgan estimates the average annual tariff cost per household will be $1,000 with the new round of Trump's tariffs.Marketsread more
J.P. Morgan says investors should remain guarded for the rest of August and wait until next month before buying stocks again.Marketsread more
The attacks come after state and local ransomware attacks in New York, Louisiana, Maryland and Florida resulted in the loss of significant sums.Technologyread more
Bianco Research's James Bianco suggests Wall Street is desperately looking for a signal that a 50 basis point cut is coming next month.Trading Nationread more
The conglomerate's head of investor relations released a more detailed statement about accounting practices under fire from Harry Markopolos.Marketsread more
Goldman notes that high-dividend payers are trading at their largest valuation discount in nearly 40 years.Marketsread more
Amazon is raising seller fees for thousands of small and medium-sized businesses in France because of a new digital tax passed by the French government.Technologyread more
U.S. Commerce Secretary Wilbur Ross said the U.S. will extend a reprieve given to Huawei that permits the Chinese firm to buy supplies from U.S. companies.Politicsread more
Amid the headlines of stores closures and retail bankruptcies, it can be tough to accept that the U.S. consumer is doing just fine.Retailread more
Greek banks could soon bring new problems to Europe, as regulators test how sound they are after eight years of economic turmoil.
The four biggest lenders in Greece — Eurobank, Alpha Bank, Piraeus and National Bank of Greece — are being stress tested ahead of the other European banks. This is because the country is set to end its third bailout program in August and both markets and creditors want reassurances that the Greek financial system can stand on its own two feet.
"There are a lot of fears in the markets that regulators will see a negative surprise for at least one or two banks," Jonas Floriani, director at investment banking firm AXIA Ventures Group, told CNBC over the phone.
The four banks have come a long way since 2015, when they were last tested. Since then, they raised nearly 15 billion euros ($18.55 billion) in new capital. However, if a problem is found in at least one of them, the other three lenders will also suffer given that they are all exposed to the same economy. If one had a problem, there would be reputational repercussions for the entire system, making it harder for them to borrow money from other banks.
"I'd like to believe the regulator will be reasonable, but it's a banking system that needs to be fixed," Floriani added, regarding the high level of bad loans in the banks' balance sheets.
Greek banks have the highest NPL (non-performing loans) ratio across the euro zone at 47 percent, according to the most recent figures from the European Commission. This is a much higher percentage than Italy's, which stood at 12 percent.
Daniele Nouy, the chair of the European Central Bank's supervisory board, said earlier this month that although the banks are in a much stronger position, there's still a "huge problem" with bad loans.
But every one of the four banks has prepared a plan to reduce the level of bad loans in their balance sheets. This concrete commitment to address the level of bad debt is making some analysts positive ahead of the stress tests.
Konstantinos Manolopoulos, director of research at the Investment Bank of Greece, told CNBC that it is hard to predict the outcome of the stress tests, but acknowledged the fact that the capital position of these banks is much stronger. He noted that the baseline scenario for tests in 2015 — which projected an economic contraction of 2.3 percent for that year — was more dramatic than the 1.3 percent contraction used in the most conservative scenario in the current tests.
This shows that the banks are in a better position three years on, he said.
Floriani from AXIA Ventures Group said in a note that the political uncertainty seen in the past has also simmered down for now and the banks will manage to go through the stress tests without the need for extra capital. As a result, he has a "buy" recommendation on Greek banks.
But according to Ricardo Garcia, chief euro zone economist at UBS, the efforts might not be enough for regulators. He told CNBC that the stress tests will show a gap in the banks' capital positions, though not a "dramatic one" given that there is a political component around this subject.
This political issue refers to the ending of the 86 billion euro bailout program in the summer. After eight years of economic turmoil and three bailout programs, both Greece and the European Union want to sell a successful story: that all the reforms implemented paid off. If the stress tests show problems in the banking system, it will be harder for Greece to end the program in the way it wants.
The Greek government is seeking a "clean exit " from the program — meaning that Greece would be at the mercy of financial markets after August this year. But that will be difficult to achieve if the stress tests show severe gaps in capital.
As a result, markets will be watching out for the outcome of the stress tests —due in May — to understand what might happen to Greece this summer: if creditors force Athens to request some additional financial and technical support after August. A negative outcome in the stress tests could send equities lower and Greek bond yields higher.