According to Moody’s, political uncertainty in Greece ahead of the national elections to take place on January 25 is credit negative for the Greek banks.

More specifically, the credit rating agency noted on January 8 that the political uncertainty surrounding the next Greek government and the subsequent re-emergence of speculation around a Grexit have a negative effect on depositor confidence and banks’ liquidity.

The speculation is mainly driven by the fact that SYRIZA is leading opinion polls, Moody’s said, noting that the main opposition party strongly opposes the austerity measures and structural reforms required for financial support from the country’s international lenders.

Moody’s underlined that although deposit outflows have increased over the past few weeks, the banks maintained their liquidity through ECB funding.

However, this funding is dependent on Greece abiding by the conditions set by the troika and remaining within the EU support program, the agency notes.