Lenders use third of plan funds

Banks have so far used up about a third of a 28-billion-euro bank support scheme designed to boost liquidity in the economy, the Economy and Finance Ministry said yesterday. The plan includes capital injections via the sale of preferred shares to the state, guarantees on bank debt and liquidity support through special government bonds. The ministry said lenders qualified for 3.8 billion euros in government-held preferred shares, 1 billion euros in state-backed debt guarantees and 4.4 billion euros in special bonds – a total of 9.2 billion euros. Applications came from all of Greece’s major banks. Economy and Finance Minister Yiannis Papathanassiou urged banks to step up lending in order to shore up the country’s slowing economy. «Banks must step up lending to businesses and households, not only because it is part of an obligation arising from the plan but also because it is also to their benefit,» said the minister in a statement.

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