ECONOMY

Banks turning skeptical on cash plan

Banks appear increasingly disinterested in the government’s funding plan, due to conditions attached to it and the strong financial position of some lenders. «Piraeus Bank has strong profits and a high level of assets, its share capital having being greatly strengthened by an increase,» the bank’s administration told Kathimerini. «So Piraeus does not need to strengthen its capital from the program envisaged by the bill.» Other banks appear to have the same viewpoint, believing that their current capital base is sufficient and they do not need to increase their liquidity through the 28-billion-euro bailout plan. Furthermore, they are seeing the first signs that international money markets are returning to normal. After the coordinated interest rate cuts, the benchmark three-month Euribor rate has dropped from 5.4 percent to 4.76 percent in just a few days. National Bank sources have for some days expressed reservations about taking up the government’s capital injection offer, citing the bank’s low ratio of loans to deposits that stands below 100 percent. Bank officials suggest that the conditions attached to the government’s scheme are not very attractive, while amendments to the plan announced by Economy Minister Giorgos Alogoskoufis on Thursday have agitated banks, given the close monitoring and remuneration caps they impose.