Greece's banks, whose borrowing costs have soared as a result of the country's fiscal problems, have asked the Greek government for access to an extra 17 billion euros ($22.7 billion) in unused liquidity measures as they struggle to cope with the economic crisis.
"They want to have an additional safety net now that the economy and the banking system are under pressure," Finance Minister George Papaconstantinou told reporters Wednesday after a meeting with Bank of Greece Gov. George Provopoulos.
"The banks have asked to use the remaining funds of the support plan," he said. "We are discussing with the central bank a procedure to allocate the remaining funds."
Although Greek banks are well capitalized with an average capital adequacy ratio of around 12%, they have been squeezed by slower economic growth and rising provisions, which reached 7.7% of total loans outstanding last year.
On account of those higher provisions, and partly because of trading losses related to their large portfolios of Greek government bonds, Greece's banks recently reported mostly disappointing fourth-quarter earnings.
That included a surprise 87 million euro ($116.3 million) loss at National Bank of Greece SA, the country's largest lender by assets.