Greek parliament approves bank recapitalization bill by Renee Maltezou on Oct 31, 2015, 12:14 PM Advertisement
 Greece's parliament on Saturday approved legislation outlining the process of recapitalizing the country's banks, coinciding with an ECB health check that showed its four biggest lenders need to plug a capital shortfall of 14.4 billion euros. Parliament approved the bill by a majority. The bill states that bank rescue fund HFSF will have full voting rights on any shares it acquires from banks in exchange for providing state aid. Under the bill the bank rescue fund will have a more active role, assessing bank managements. The exact mix of shares and contingent convertible bonds the HFSF will buy from banks in exchange for any fresh funds it will provide will be decided by the cabinet. The capital hole has emerged chiefly due to the rising number of Greeks unable or unwilling to repay their debt, after a dispute over reforms between the leftist government and international lenders almost saw Greece leave the euro. In checks on the financial strength of the country's four main banks - National Bank of Greece, Piraeus, Alpha Bank and Eurobank - the ECB determined that even if the economy performs as forecast, the banks would need almost 4.4 billion euros ($4.8 billion) and more than 14 billion if it performs worse than expected, in a so-called 'adverse scenario'. International lenders have set aside up to 25 billion euros for the recapitalization of banks under terms of Greece's third international bailout, worth up to 86 billion euros. SEE ALSO: The recession fearmongers might have it dead wrong
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