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After parliament has adopted the new Memorandum of financial assistance, the recovery programme for banks will also take effect and they will register serious damages after the 50% haircut on Greek debt held by private investors. The Financial Stability Fund that was created with funds from Europe and the International Monetary Fund has € 30 billion euro available to the Greek financial institutions. The main advantage is that the recovery programme for financial institutions will operate for five years and, if necessary, can be extended to seven years. Banks will retain private nature. Given the deadline, analysts estimate that they will return the borrowed funds if the economy starts improving.

The new conditions for the functioning of the Financial Stability Fund will be adopted by law by the end of March this year, and by then, the Bank of Greece will have an accurate estimate of the amount of funds needed to recapitalize banks hit by the debt crisis. The estimate includes both losses from the reduction in the nominal face value of Greek bonds due to the PSI and the conclusions by BlackRock on the amount of "bad loans" in the next three years.

Recapitalization of banks should provide them with levels of capital adequacy according to CoreTier Ι of 9% by the summer of this year and in 2013, its value must reach 10%. After non-payable loans of state enterprises were involved in the PSI agreement for the Greek debt cut, the state will issue guarantees to the banks to support additional capital sustainability of financial institutions.

Within a month and a half, banks should prepare business plans on how to strengthen their capital. Then, within six months, credit institutions should increase the share capital according to the needs of each bank. Financial institutions should cover at least 10% of the total capital they need with it and then, they may resort to the help of the rescue fund. It will be granted against the issuance of shares without voting right for five years and then, they will have to be redeemed by the bank. In the case that the banks cannot obtain 10% of the funds they need from the market, they will be entitled to take state aid, but against shares with voting right. I.e. the state will take some control over the bank depending on the aid granted.

Observers consider that mergers and acquisitions are also a good option for the survival of smaller financial institutions, like the initiative between Alpha Bank and Eurobank EFG. Banks issuing shares with voting right will need to adjust their cost of salaries with this in the public sector (which will soon be seriously cut). Workers in the banking sector are threatened by layoffs, not only by reduced wages. Currently, about 55,000 employees are supporting the banking services in Greece. The supervisory Troika from the European Central Bank, the European Commission and the International Monetary Fund expect that the consolidation of the sector will not only reduce the average wage, but will also cut 15 thousand jobs in it.

A day after the critical vote on the Memorandum 2, while firefighters were extinguishing the last smoking buildings from the riots on Sunday, the Athens Stock Exchange was off to a flying start. It closed at 834.41 basis points and its main index jumped by 4.65% compared to Friday's session. The daily value of transactions reached 95.33 million euro and the spread index of Greek government bonds reached 3280.1 bps.