ATHENS, Oct 3 (Reuters) - Greece's central bank has decided to lower the capital adequacy requirement for the country's battered banks due to delays in their planned recapitalization as part of the country's foreign bailout, a Bank of Greece official said on Wednesday.
The central bank has abandoned the core Tier 1 ratio requirement of 9 percent effective Sept 30 and instead adopted a total capital adequacy ratio of 8 percent until their recapitalization is complete, the official told Reuters, declining to be named.
The loosening of this threshold means Greek banks will not have to raise as much capital as they await resumption of the recapitalization process.
Greece's second, 130-billion euro bailout has earmarked a sum of 50 billion euros to recapitalize the country's viable banks and cover resolution costs for others.
A bank support fund, the Hellenic Financial Stability Fund (HFSF), set up to carry out the recapitalization, has already pumped 18 billion euros into the country's four biggest lenders, but the rest of the funding will only resume when lenders disburse the country's next, 31.5 billion euro aid tranche.
That aid has been delayed pending a review by the troika of European Union, European Central Bank and International Monetary Fund inspectors on the country's progress in meeting the terms of its bailout.
Hammered by a deep recession and rising loan impairments, Greek banks have been forced to rely on the central bank for liquidity and begun to consolidate to survive the debt crisis.
Greece's Piraeus Bank has struck a preliminary deal to buy French lender Societe Generale's loss-making Greek unit Geniki , two sources close to the talks told Reuters on Tuesday.
On Monday fellow French bank Credit Agricole said it would sell its Greek unit, Emporiki, for a symbolic one euro to Alpha Bank .
(Reporting by George Georgiopoulos; Editing by Hans-Juergen Peters)
Keywords: GREECE BANKS/