Greece considers consolidating top banks, depositor bail-in, ‘bad bank’ for toxic loans; EUR 15bn recapitalisation required
The Greek government is weighing a number of measures to rescue the national banking system, to be discussed at a meeting tomorrow, The Sunday Times reported without naming sources.
The government’s finance officials will meet with the heads of the country’s four biggest banks - Alpha, Eurobank, National Bank of Greece (NBG) and Piraeus - to consider options including consolidating the four into two; an enforced depositor bail-in; and the formation of a “bad bank” which would house toxic debt, the report said.
Senior sources cited in the piece said the banks need to be recapitalised to the tune of approximately EUR 15bn. The lenders’ deposits now total less than EUR 500m and NBG chairwoman Louka Katseli stated that the banks’ funds will not last beyond tomorrow, the report said.
Senior government officials cautioned that the banks will need to remain subject to capital controls for a further six months or more, the item reported. New controls are expected to be approved at the meeting tomorrow, including limits on corporate and individual international transfers, as well as continued withdrawal caps, the report said.
Eurozone finance officials are currently considering whether to grant Greece a EUR 53.5bn three-year bailout which should avoid the country exiting the euro zone, the report noted.
Sunday Times