The initial funds that are scheduled to be released immediately for the Greek banks are estimated at 10 bln euros, part of a liquidity injection to help to restore confidence in the banking system, according to Reuters.
The funds will be placed in a special account under the control of the ESM and not on the banks’ balance sheets, while they will receive more funds only after the stress tests have been completed by the end of October.
A source told Reuters that ‘when the full capitalization of Greek banks is complete this will have significant effects on the economy’. It should be noted that the European authorities have abandoned the idea of ‘bail-ins’ on depositors or other creditors, however, there is expected to be a shareholder dilution.
