NewGreece, lenders see need to recapitalise banks by year-end

Greece and its international lenders want the country's struggling banks to be recapitalised by the end of the year, Greece's finance minister said, a move that would avoid new rules forcing large depositors to pay for some of it.

Euclid Tsakalotos said that both sides discussing a new bailout for Greece were on the same page regarding the speed needed for recapitalisation.

"We discussed the recapitalisation issue of Greek banks. [Creditors] want, as do we, to complete the process soon … by the end of the year," he told reporters after a meeting with representatives of the European Union and the International Monetary Fund.

The EU estimates the Greek banking sector will need anything from €10 billion to €25 billion, but the exact amount needed would depend on the results of stress tests and asset quality reviews.

Greek banks have seen billions of euros flow from accounts this year as the potential for Greece being thrown out of the euro zone grew. Capital controls were imposed to stop the flow.

Shares in the country's listed banks have crashed since the stock market opened on August 3 after a five-week shutdown as part of the capital controls. The bank sector index lost 63 per cent over three trading sessions last week. Part of the reason is concern about recapitalisation, which will mean existing shareholders will see their holdings diluted.