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Greek Banks Face Skeptical Investors in Demand for Fresh Capital

  • Greek banks draw capital increase plans after ECB stress test
  • Lenders need to raise $15.9 billion following economic debacle

Greek banks will ask investors to help plug a 14.4 billion euro ($16 billion) capital shortfall, with billionaire Wilbur Ross saying the government should detail ownership plans for the nation’s lenders as they seek a second round of fundraising.

“The keys to voluntary investor participation in the capital raises will be clarity regarding the ultimate capital structure and the extent of the government’s participation in the governance of the banks,” Ross, chairman of WL Ross & Co. said after the release of the ECB’s so-called comprehensive assessment for Greek lenders on Saturday. “Investors will not be comfortable with committing new equity capital to banks that are effectively nationalized,” the billionaire investor, who holds a stake at Eurobank Ergasias SA, said.