Bank ac­cess to bailout cash lim­ited

Kathimerini English - - Front Page -

Greek banks will have re­stricted ac­cess to bailout funds un­til a fresh in­jec­tion of eq­uity to re­cap­i­tal­ize them sev­eral months from now is ap­proved, sources told Reuters yesterday. An ini­tial 10 bil­lion eu­ros will be made avail­able “im­me­di­ately” to shore up con­fi­dence in Greek banks, but it will be placed in a re­stricted ac­count, at least un­til a “stress test” is fin­ished by the mid­dle or end of Oc­to­ber, they said. The Euro­pean Sta­bil­ity Mech­a­nism – which pro­vides fi­nan­cial as­sis­tance to euro area mem­ber states ex­pe­ri­enc­ing fi­nanc­ing dif­fi­cul­ties – will be re­spon­si­ble for dis­tribut­ing this cash, if banks fall short of min­i­mum cap­i­tal re­quire­ments. But no dis­burse­ment is ex­pected for now as banks are seen main­tain­ing ad­e­quate cap­i­tal un­til the full 25 bil­lion eu­ros out­lined in the res­cue pack­age agreed be­tween Athens and its in- ter­na­tional lenders are avail­able, one source said. Greek banks, closed for much of July, have been kept on a life­line by the Euro­pean Cen­tral Bank and are lim­it­ing cash with­drawals to a weekly 420 eu­ros per cus­tomer to pre­vent a run. But they have built up a 5-bil­lioneuro liq­uid­ity buf­fer thanks to cap­i­tal con­trols, in­di­cat­ing con­fi­dence is re­turn­ing. “When the full re­cap­i­tal­iza­tion of banks is ful­filled it will have a ma­jor im­pact for the econ­omy,” one of the sources said. “We know that there is around 40 bil­lion eu­ros in cash un­der the mat­tresses in the real econ­omy and that money could come [back to the banks] very very quickly.”

Build­ing ac­tiv­ity in May, as mea­sured by the num­ber of per­mits is­sues, saw a small rise of 1.9 per­cent af­ter larger in­creases in the pre­vi­ous months. Over­all this year, there has been a 6.1 per­cent rise in the num­ber of per­mits is­sued com­pared to 2014, 13.4 per­cent when mea­sured by sur­face area and 16.6 per­cent in terms of vol­ume.

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