Monday, 22 August 2011

Greek banks face new challenge

The Financial Times explains why even as they face a potentially ruinous liquidity shortage, Greek banks have pooled 50 million euro to save Proton Bank from collapse. Proton faces imminent danger following the revelation that its main shareholder, pharmaceutical operator Lavrentis Lavrentiadis, is under investigation for using it as a slush fund. The last thing honestly run Greek banks need is a public perception that, in addition to their overexposure to Greek debt, they are run nepotistically. According to the FT, as much as a third of Proton's 850 million euro loan portfolio was given to Lavrentiadis' subsidiaries.

Greek daily To Vima broke the story of the investigation by the Greek prosecutor and money laundering authority on August 7.

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