Australian lender stops transactions with local banks

More and more signs are pointing to a deterioration in Greece?s ailing economy, as the European Commission is reportedly pressing Athens to shut down state-run ATEbank, an Australian lender has stopped transactions with the local credit system, and HSBC is selling its local stockbrokerage firm.

Reuters reported on Thursday that according to sources in Brussels, the Commission is putting pressure on the Greek government to wind down certain lenders, including the biggest among the state-owned, ATEbank. ?Some banks are going to be squeezed; some are going to be closed down,? an anonymous source said.

?If you have a financial stability component, then you could be prepared to rescue a bank, but we are beyond that point now in a number of countries. ATEbank will have to be closed or wound down over time,? the same official told Reuters.

The Athens News Agency reported on Thursday that Australia?s fourth-biggest lender, National Australia Bank (NAB), had announced its decision to stop all transactions with the Greek credit system due to uncertainty regarding the outcome of the crisis. All money sent from NAB will be directed to Greece through Deutsche Bank, it added.

NAB officials attributed the decision to the recent downgrade of Greek banks and its policy of protecting clients, but Greek bank officials say that transactions with Australia are minimal.

HSBC, one of the world?s leading banking groups, announced on Thursday the sale of its local stockbrokerage subsidiary to a group of investors led by the current chief executive officer of the Greek firm, Nikos Pantelakis. The local stockbrokerage held a 3.24 percent market share last month.

Meanwhile, the economic climate index posted a small decline in May, according to a monthly survey conducted by the Foundation for Economic and Industrial Research (IOBE). It fell to 76 points from 77.3 in April, a drop attributed to the pressure on the industry and construction sectors.

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