First Greek bank bailout cash could come before stress test, says eurozone source
Greek banks could get a first capital injection soon after a bailout deal is agreed, as much as 10 billion euros, even before the ECB completes a stress test, a eurozone official familiar with the issue said on Monday.
The official who asked not to be named, said a bank test may not be finished before October but that it was recognised the Greek banks need urgent capital to normalise their operations.
So an initial sum may be allocated even before the European Central Bank can assess the total of how much is actually needed.
The comments suggest that European officials are warming to Greek plans to get cash to banks as soon as possible and at the very latest before the end of the year.
Athens wants to ease capital controls, in place since June, which now limit withdrawals to 420 euros per customer per week.
It also wants to avoid having the recapitalisation slip into 2016, at which time new EU regulations would require charges, or haircut, on large depositors, including companies.
The EU has suggested Greek banks may need anything from 10 billion euros to 25 billion euros, but the final amount is dependent on stress tests and an asset quality review. These tests will be accelerated, the source said.
Athens and international lenders are making unexpectedly quick progress in talks over an up to 86 billion euro bailout package, aiming to wrap up the deal this month and use the fresh money to repay a bond due to the ECB on Aug 20.
Another source said that the initial instalment must be sufficiently large to shore up confidence and a figure around 10 billion is seen making a psychological impact.
Greece's bank rescue fund injected 25 billion euros into the four main banks – National Bank, Piraeus, Eurobank and Alpha — in 2013 in exchange for shares, and last year they raised a further 8 billion from international investors.
[Reuters]
