Banks will get an extension until the end of October for the publication of their first-half financial reports so that the second installment of 25 billion euros for the recapitalization of banks will have been disbursed by then to the Hellenic Financial Stability Fund (HFSF) and legislation on the recapitalization of the banking system will have been passed.
Normally banks should have published their results for the first half by the end of August, but this year, they had until late September due to a previous extension. In the coming weeks the government will proceed to a new regulation extending the deadline to end-October.
By that time the government is hoping to have dealt with the major issue of banks or have completed the necessary process for the distribution of the recapitalization. It aims to pass the relevant legislation within the month.
Sources suggest that neither the government nor the representatives of Greece?s creditors (known as the troika) want a solution that would lead to the full nationalization of banks. Instead, they are seeking incentives that would safeguard the private character of the credit system while also examining the use of European mechanisms to access funding.
The greater the participation of the private sector in the process, or the more the European Financial Stability Facility (EFSF) participates, the less money the government will need to contribute.
On Monday Yiannis Papadakis, the deputy governor of the Bank of Greece, told Parliament?s financial committee that apart from the four major banks — National, Piraeus, Alpha and Eurobank — no other Greek lenders are believed to be capable of surviving following their recapitalization. He underscored that Hellenic Postbank was not deemed sustainable as checks showed it to be trailing its competitors considerably. The ?weak? banks must find a ?way of cooperation,? he added.