Thursday, December 2, 2010

Fearful Greek banks scramble for liquidity

Financial Times
December 2, 2010

Greek banks are seeking liquidity amid fears the mounting eurozone crisis will prolong their exclusion from international lending markets and trigger a further flight of deposits.

Responding to banks’ concerns, the finance ministry this week allocated a further €20bn ($26bn) of state guarantees to be used as collateral for funding by the European Central Bank.

Greece’s big four banks – National Bank of Greece (NBG), Alpha Bank, EFG Eurobank and Piraeus Bank – would each receive about €3bn-€4bn when the funds are disbursed, analysts said.

The international lending markets are closed to Greek banks because the markets price in a high risk that the government will default on its bonds.

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