ECONOMY

Greek banks to tap market, rescue fund to plug capital gaps, sources say

Greek banks to tap market, rescue fund to plug capital gaps, sources say

Greece's four big banks will turn to private investors to plug any capital shortfalls the European Central Bank's asset quality review and baseline stress tests reveal, two banking sources close to the matter said on Thursday.

The HFSF, Greece's bank bailout fund, will cover any additional capital needs found in the ECB health check's adverse scenario if it cannot be raised in the market, the banking sources told Reuters, as the authorities finalise their recapitalisation framework.

Capital controls, new austerity measures imposed as part of the country's third international bailout and a mountain of non-performing loans have increased the credit risk and reduced the profitability outlook of Greek banks.

The European Central Bank's Single Supervisory Mechanism is assessing the capital needs of National Bank of Greece , Piraeus , Alpha Bank and Eurobank . Results are expected by the end of the month.

[Reuters]