ECB: Greek Bank Recapitalizations to Finish ’Shortly’

Wednesday, 23 May 2012 06:52 PM

 

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The European Central Bank said it expects the recapitalization of Greek banks to be concluded soon, and welcomed generally the legal foundation for the fund that will carry out the task.

“The ECB expects that the bridge recapitalization will be finalized shortly,” the Frankfurt-based central bank in a legal opinion published on its website.

At the same time, the ECB noted several reservations with the draft legislation for the Hellenic Financial Stability Fund, relating partly to a possible conflict of interest with the Greek central bank. A 130 billion-euro ($165 billion) bailout earlier this year from international donors including the European Union and the International Monetary Fund provided 50 billion euros to recapitalize Greek banks after they reported losses from the country’s debt restructuring.

“The HFSF’s responsibilities need to be clearly defined, to ensure that the HFSF does not inadvertently interfere with the powers of the Bank of Greece as supervisory and resolution authority and as guarantor of the stability of the financial system,” the opinion said.

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