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ECB: Greek banks need up to $15.4B in new capital

Former Greece's prime minister and leftist Syriza party leader Alexis Tsipras (L) and New Democracy party leader Vangelis Meimarakis stand at their podiums before a televised debate in Athens, September 14, 2015.

Michalis Karagiannis | Reuters

Former Greece’s prime minister and leftist Syriza party leader Alexis Tsipras (L) and New Democracy party leader Vangelis Meimarakis stand at their podiums before a televised debate in Athens, September 14, 2015.

The European Central Bank is expected to say on Saturday that Greek’s battered banks need up to 14 billion euros ($ 15.4 billion) in fresh capital in order to survive.

It comes after years of economic decline in Greece – bailed out three times by international lenders – that has forced some 42 billion euros to be set aside against bad loans.

Although the banks are currently been kept afloat by access to money through the euro zone monetary system, there is a rush to get recapitalisation completed.

If it is not done by the end of the year, new European Union rules mean large depositors such as companies may have to take a hit in their accounts.

The announcement, to be made at 9.30 a.m. GMT, follows a series of stress tests on the banks to see how they are faring after the long-running dispute over reforms demanded of Greece for international support.

The four main banks concerned are National Bank of Greece, Piraeus, Alpha Bank and Eurobank.

This bailout stand-off between leftist Prime Minister Alexis Tsipras and his country’s international backers – the International Monetary Fund and European Union – almost saw Greece tumble out of the euro zone.

Finance

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