According to China's top economic planning body, some local companies are cutting back on their efforts to hire new university graduates.China Economyread more
German Chancellor Angela Merkel has presided over a tumultuous recent period, which for many, has left Europe on the brink.Commentaryread more
Tensions between China and the U.S. are threatening to slow global trade further, threatening some Asian economies.Asia Economyread more
U.S. President Donald Trump's former campaign chairman Paul Manafort was transferred to a detention facility in Manhattan on Monday ahead of an expected arraignment on state...White Houseread more
Airbus recorded orders and options for 123 planes, according to the aviation consulting firm IBA.iQ.Paris Air Showread more
Markets in Asia were mostly higher in Tuesday trade as investors awaited the start of a closely-watched meeting by the U.S. Federal Reserve, set to kick off later stateside.Asia Marketsread more
Wall Street analysts think Facebook's cryptocurrency payments project will give the company a big boost.Marketsread more
Chinese President Xi Jinping will travel to North Korea this week for a two-day visit, ahead of a possible meeting between Xi and President Donald Trump at next week's G-20...Politicsread more
The Pentagon said that the crew of one of the tankers, the Japanese Kokuka Courageous, found an unexploded limpet mine on its hull following an initial explosion.Politicsread more
China's Alibaba Group on Tuesday said its chief financial officer, Maggie Wu, will oversee the firm's strategic acquisitions and investments unit, as part of a business and...Technologyread more
Despite the popularity of companies like Beyond Meat and Impossible Foods, meat consumption around the world continues to rise.Food & Beverageread 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.