Investors need incentives to join bank recap

The government is examining ways of getting private investors to participate in the recapitalization of the local credit system, in an effort to reduce the contribution that the state will have to make.

Bank officials stress that if the capital requirements for the four major banks — National, Piraeus, Alpha and Eurobank — remain at 29 billion euros, it would be impossible to attract private funds.

?For any serious hope of wooing private investors, the level of capital requirements will need to go down,? a senior bank official told Kathimerini. ?If that happens and ample incentives are given, then the participation of the private sector would become possible, which would help to reduce the possibility of the nationalization of the bank system,? he added.

Out of the 50 billion euros planned for the system?s recapitalization, 29 billion will go to the four majors and the remaining 21 billion will be used to cover the capital deficits of banks that will enter the restructuring process, as in the cases of ATEbank and Proton Bank.

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