Greek Banks 14bn euros underwater
Duncan Richardson, News Editor
3 Nov 2015, 12:20 p.m.
Greece’s four largest banks need to raise £10 million pounds in reserves to ensure they can survive the next economic downturn.
The European Central Bank (ECB) have given Piraeus Bank, NBG, Eurobank and Alpha Bank until the end of the week to say how they will shore up their balance sheets. The capital could be raised from private investors or the banks could once again tap EU bailout funds.
The ECB stress test indicated the shortfall could range between 4.4 and 14.4 billion euros.
This is not the first time the Greek banks have been bailed out and probably won’t be the last. Greek banks are under considerable pressure as investors continue to withdraw their savings following the shutdown of the Greek banking system in the summer. Capital controls limiting the amount the Greek people can withdraw are still in place.
The Greek banks one way or another will be recapitalised as any bank failure could potentially cause further bank bankruptcies across Europe. Ultimately Greece’s debt problems will resurface as you can’t solve a problem of over indebtedness with even more debt.