EU gives temporary okay to recapitalisation of banks

The EU Commission gave its temporary green light to the recapitalization of the main Greek banks - Alpha Bank, EFG Eurobank, Piaeus Bank and National Bank of Greece - through the Hellenic financial stability fund. "Greek banks are currently operating under extreme conditions, the bridge recapitalization by the Hellenic fund ensures the stability of the Greek banking sector", said Joaquin Almunia, the commissioner responsible for competition. Athens' institutes of credit have experienced significant losses and a deterioration of their capital after participating in the exchange programme of Greek bonds, Brussels explained. With the recapitalization, it will instead be possible to bring the level of capital up in order for Greek banks to function on the market and bring up to 8 percent the Core-tier 1 ratio. State aid will be controlled by Brussels to verify whether they are in line with EU regulations. The commission also temporarily approved aid to the Proton Bank until it takes a final decision on the restructuration of the Nea Proton Bank, the new bank created with the operation.