Greek banks may use less funds
Source: Agencies |
March 19, 2012, Monday
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Print Edition
Print Edition
GREEK banks hard-hit by the country's debt swap might not need all the aid earmarked by the EU and IMF to help them weather the crisis, central bank chief George Provopoulos was quoted as saying.
The European Union and International Monetary Fund have set aside 50 billion euros (US$65.9 billion) to recapitalize and support the lenders, the biggest private holders of Greece's debt.
The banks all took part in the largest debt restructuring in history this month that saw bondholders lose as much as 74 percent on their investments.
"The recapitalization of the banks will be completed by September 2012," Provopoulos told To Vima newspaper on Saturday. "I believe that the available amount will not need to be fully exhausted."
He said he still hoped there would be mergers in the Greek banking sector after Alpha Bank last Wednesday scrapped plans to tie up with rival Eurobank in what would have been Greece's biggest bank merger in decades.
The merger fell through after the debt swap inflicted a bigger hit on their portfolios than expected, with Eurobank particularly affected as its exposure to Greek sovereign bonds was roughly double.
"It's possible that we will see mergers. After its recapitalization the banking sector will be much healthier and stronger," Provopoulos said ahead of the publication today of the central bank's monetary policy report.
He warned once again that for Greece to leave the eurozone would be like "opening the gates of hell."
But he said the decisions by the eurogroup and successful completion of PSI (debt swap) "are making this scenario distant."
The European Union and International Monetary Fund have set aside 50 billion euros (US$65.9 billion) to recapitalize and support the lenders, the biggest private holders of Greece's debt.
The banks all took part in the largest debt restructuring in history this month that saw bondholders lose as much as 74 percent on their investments.
"The recapitalization of the banks will be completed by September 2012," Provopoulos told To Vima newspaper on Saturday. "I believe that the available amount will not need to be fully exhausted."
He said he still hoped there would be mergers in the Greek banking sector after Alpha Bank last Wednesday scrapped plans to tie up with rival Eurobank in what would have been Greece's biggest bank merger in decades.
The merger fell through after the debt swap inflicted a bigger hit on their portfolios than expected, with Eurobank particularly affected as its exposure to Greek sovereign bonds was roughly double.
"It's possible that we will see mergers. After its recapitalization the banking sector will be much healthier and stronger," Provopoulos said ahead of the publication today of the central bank's monetary policy report.
He warned once again that for Greece to leave the eurozone would be like "opening the gates of hell."
But he said the decisions by the eurogroup and successful completion of PSI (debt swap) "are making this scenario distant."
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