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ECB: Greek banks must raise extra capital

Four major Greek banks have been told by the European Central Bank to rapidly raise their safeguard capital by the end of the year. Up to 14.4 billion euros in shortfalls have been identified during ECB stress tests.

The Frankfurt-based ECB said on Saturday the four had until early November to submit plans on how they intended to create "prudential buffers," to protect customers, should they fail.

Two tests had shown combined shortfalls of 4.4 billion euros under a baseline scenario and up to 14.4 billion euros ($15.8 billion) under an adverse scenario, it said.

The banks named were Greece's Alpha Bank, Eurobank, NBG and Piraeus Bank.

"The four banks will have to submit capital plans explaining how they intend to cover their shortfalls by November 6," said the ECB.

Watch video 01:52

The Greek bailout dilemma

Bailed out three times

Its demand follows years of economic decline in Greece, which has been

bailed out three times by international lenders

, including 25 billion euros set aside in case of commercial bank failures.

The rush to complete recapitalization coincides with a long-running dispute between lenders and Greece's leftist Prime Minister Alexis Tsipras over what mix of austerity and investment recovery measures should be pursued.

To avoid mass withdrawals, Greek

banks were shut for several weeks

from late June as Europe heatedly debated whether Greece should leave the eurozone.

Its government later imposed limits on cash withdrawals.

ipj/ng (AFP, Reuters)

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