Venizelos said that he had been acting on the recommendations given to him by the governor of the Bank of Greece and the Financial Stability Fund, while the treatment of the bank was indicative of how a new law for keeping the banking system healthy will be applied.
Under this, the bank was split into the 'good' and 'bad' parts, the licence of the 'bad bank' was revoked and it was placed in liquidation, while all the healthy loans and deposits were transferred to the good bank, which now belonged entirely to the Financial Stability Fund. The minister stressed that the board of the new bank would now be appointed by the state, its general assembly convened by the fund and all deposits fully protected.
"The cost is less than the amount the Savings and Investments Fund would have to pay in compensation for the deposits in Proton Bank," he added, noting that such compensation would be paid out when as and when it became necessary to shore up the confidence of Greek depositors and investors that their savings and investments were secure.
The minister came under fire for the measure, however, with MPs stressing that the cost of the bailout came to 863 million euro, once again charged to the tax payer, while the head of Proton Bank had reached a settlement with the government for the 51 million euro that he had embezzled and returned, so that there would be no further prosecution.
The finance ministry announced that the state was taking over Proton Bank on Monday, saying that the new bank formed will be fully capitalised with a capital adequacy ratio of 10.6 pct and access to the Eurosystem through the Bank of Greece.