Two More European Banks Nationalized Following Dexia’s Example

Thank god for Dexia’s implosion this morning, or else the world would be forced to pay attention to the fact that Greece is still as insolvent as ever and still without a formal Troika approval for disbursement of the critical 6th tranche that Greece needs or else. Also, were it not for Dexia someone might notice that two other banks bit the nationalization bullet in the past 24 hours as the contagion, not from Dexia, but from the fact that there is simply not enough money around: as a result Danish Max Bank and Greek Proton Bank just handed the keys to their HQs to their primary regulators, with the management teams quietly riding off into the sunset. They are the lucky ones: in a few months it won’t be nearly as easy to find “nationalization” funding and keep your depositors away from the “tar and feathers” toolshed.

From Reuters on Proton:

Greece’s central bank said on Monday it activated a bank rescue fund to save Proton Bank, effectively nationalising the small lender that is under investigation for possible violation of the country’s money-laundering laws.

It is the first lender to be nationalised under the Financial Stability Fund (FSF), a safety net set up by Greece and its international lenders for banks that need to recapitalise but cannot raise funds in the market.

Analysts said the move had to do with Proton’s own business problems and not with the country’s severe debt crisis.

“After recommendation by the Bank of Greece, the Finance Ministry proceeded to apply to Proton Bank a new law about the restoration of banks,” the Bank of Greece said in a statement.

The Bank of Greece said Proton was split into a “good bank” where all of its private sector, government deposits and sound assets were transferred. The good bank will have the FSF backstop as its sole shareholder and retain the trade name Proton.

“The ‘good bank’ is well capitalised, with a capital adequacy ratio that is well above the regulatory threshold. It has access to euro-system liquidity through the Bank of Greece,” the central bank said.

Click below to read the full article:

via Two More European Banks Nationalized Following Dexia’s Example | ZeroHedge.

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