Banks to be recapitalized by Friday, says banker

Greece’s four largest commercial banks will receive 18 billion euros ($23 billion) recapitalization funds by Friday, a senior banker at one of the four said on Tuesday.

“We will get the money by Friday at the latest. Maybe we will get it tomorrow,» said the banker, who declined to be identified.

The funds are needed to recapitalize Alpha Bank, National Bank of Greece, EFG Eurobank and Piraeus Bank.

Once they receive the recapitalization, in the form of European Financial Stability Fund bonds, the banks will be able to resume funding operations with the European Central Bank, he said.

“With this 18 billion euros in EFSF bonds we will participate again in ECB liquidity operations,» the banker told Reuters on condition he not be identified.

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 program 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.

Recapitalizing the banks is a crucial element of a bailout Greece received in March from the European Union, ECB and International Monetary Fund. [Reuters]