The European Un ion and International Monetary Fund have set aside some 50 billion euros to recapitalise and support the lenders, the biggest private holders of Greece’s debt.
The banks all took part in the largest debt restructuring in history this month that saw bondholders lose as much as 74% on their investments.
“The recapitalisation of the banks will be completed by September 2012,” Provopoulos told To Vima newspaper. “I believe that the available amount will not need to be fully exhausted.”
Provopoulos said he still hoped there would be mergers in the Greek banking sector after Alpha Bank on Wednesday scrapped plans to tie up with rival Eurobank in what would have been Greece’s biggest bank merger in decades.
The merger fell through after the debt swap inflicted a bigger hit on their portfolios than expected, with Eurobank particularly affected as its exposure to Greek sovereign bonds was roughly double.
“It’s possible that we will see mergers. After its recapitalisation the banking sector will be much healthier and stronger,” Provopoulos said ahead of the publication on Monday of the central bank’s monetary policy report.
He warned once again that for Greece to leave the eurozone would be like “opening the gates of hell.” “Fortunately the decisions by the Eurogroup and successful completion of PSI (debt swap) are making this scenario distant and give Greece the chance to enter, with hard work, a virtuous circle,” he said.
Source: Financial Mirror
Published on 19 March, 2012