Recapitalization on the way for Greek commercial banks. In response to the European stress tests, the Bank of Greece would like credit intermediaries to strengthen their capital positions by the end of 2012. The measure was reported by the Sunday edition of the Kathimerini newspaper.
Despite already having tier 1 capital values equal to or higher than the 9% required by current regulations, Greek banks are currently cut off from the European interbank market because their issues are judged too risky. The reason lies in the disruptive knock-on effect that a Greek public debt bankruptcy would have on the balance sheets of commercial banks. The main Greek lenders (including the National Bank of Greece, Alpha Bank, Efg Eurobank and Piraeus Bank) are also strongly present across the border, particularly in Romania, Bulgaria and Albania.
