Greece Has Already Spent 75% Of Its Bank Bailout Cash

[thenews]

Eurozone taxpayers and the IMF are left wondering what their bailout funds have been spent on in Greece. The Hellenic Financial Stability Fund (HFSF) has spent EUR38bn (or 75% of its total) bolstering the capital of Greece's four biggest banks (and winding down eight small lenders). The EUR50bn fund looks set to be drained further - despite the banks comments that costs have been cut, funds raised, and assets sold - as non-performing loans continue to surge. About a quarter of all loans are non-performing and that share is likely to increase as the country's six-year recession, which has wiped out over a quarter of the economy, shows little sign of abating. Have no fear though, since stress tests will be carried out later this year to establish whether Greek banks have more capital needs. Of course the key question is - just where were these rescue funds diverted within the bank shells.

Via Reuters,

The Hellenic Financial Stability Fund (HFSF), Greece's bank bailout fund, has spent 38 billion euros (33.75 billion pounds) propping up the country's ailing bank system, three-quarters of the total it was endowed with.

About 25 billion euros were used to bolster the capital of Greece's four biggest banks, an HFSF report said. The HFSF, set up in July 2010, spent another 13 billion to wind down eight small lenders as part of measures to shrink the country's banking sector.

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Eurozone taxpayers and the International Monetary Fund, which bankroll the HFSF, have provided the bulk of the funds used to keep Greek banks going, the report showed.

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The HFSF is endowed with 50 billion euros out of the 240 billion euros the EU/I?F have made available to rescue Greece from a chaotic bankruptcy that could have spread across the entire euro zone.

The rescue of Greece's banking system has been largely completed now. But lenders might need yet more capital to cope with bad loans.

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