Greek banks in line for €18bn recapitalisation
GREECE’S four largest commercial banks will receive €18bn (£14.5bn) recapitalisation funds by Friday, a senior banker at one of the four said yesterday.
“We will get the money by Friday at the latest. Maybe we will get it tomorrow,” said the banker, who did not want to be identified.
The funds are needed to recapitalise Alpha Bank, National Bank of Greece, EFG Eurobank and Piraeus Bank.
Once they receive the recapitalisation, in the form of European Financial Stability Fund (EFSF) bonds, the banks will be able to resume funding operations with the European Central Bank (ECB), he said.
The ECB suspended some Greek banks from funding operations last week because their capital was too low, forcing them to obtain higher-cost funding from an emergency programme at the Bank of Greece.
Greek banks saw much of their capital vanish this year because of losses in an historic bond swap that wiped out most of the value of their holdings of Greek government debt.
Ratings agency Fitch yesterday warned that a range of banks across the Eurozone will need to be recapitalised before the current crisis can be solved, and pointed to banks in the UK to prove that such a strategy can work and restore the sector to health.