Greek bank stocks rebound as government downplays prospect of creditor clashes

Deputy PM cites inexperience of new ministers in making public statements

Greek bank stocks rebounded as the government moved to contain the fallout from pledges made by its ministers, seeking to downplay the prospect of an imminent clash with creditors.

Within 48 hours of the appointment of an anti-bailout cabinet under prime minister Alex Tsipras, stocks in Athens fell to lows not seen since the peak of the debt crisis, with banks, in which Greek taxpayers are the biggest shareholders, losing about $11 billion of their value.

The selloff followed statements by new ministers including a pledge to increase the minimum wage and to halt privatisations.

Deputy prime minister Yiannis Dragassakis said the initial comments were due to inexperience.

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“We have new ministers who are assuming such duties for the first time, and a society where a dynamic of such expectations has been created,” Mr Dragassakis said late on Wednesday.

“The Greek government is interested in attracting investors,” he added.

Alpha Bank shares had risen by 18.8 per cent at by mid-afternoon Athens after falling as much as 30 per cent on Wednesday. National Bank of Greece rose 9.7 per cent after also plunging almost 30 per cent.

The Athens Stock Exchange index rose 2.4 per cent, while the yield on benchmark 10-year Greek bonds fell 19 basis points to 10.14 per cent.

Uncertainty over the country’s financing prospects under a Syriza-led government spooked depositors in the run-up to Sunday’s election. Greek deposit outflows accelerated last week to levels not seen even at the peak of the debt crisis, taking the total outflow for January to €11 billion, according to a source.