Greek lenders help recapitalize Proton Bank

22 August 2011

Four of the biggest banks in Greece have acted to help recapitalize small lender Proton Bank by agreeing to take up a convertible bond to the tune of €50 million ($72 million).

The Financial Times reports the move is likely to be an attempt to prevent a run on the nation's banking set-up, which has been under intensifying pressure of late.

National Bank of Greece - founded in 1841 as a commercial institute - EFG Eurobank, Piraeus Bank and Alpha Bank agreed to assist Proton after it was identified as one of the smaller lenders at most risk due to the country's sovereign debt crisis.

One industry figure told the newspaper: "In this environment, it was essential to prevent Proton from collapsing and creating a mood of fear with unpredictable consequences."

A Greek financial expert noted banks of a lesser scale have been affected not only by the credit crunch, but also through irregular practices.

By Tony Aynsley

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