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.
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.
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