October 24, 2011 / 8:08 AM / 7 years ago

Greek bank stocks plunge 13 percent on haircut fears

ATHENS (Reuters) - Greek bank shares .FTATBNK shed more than 13 percent on Monday on fears that a deeper markdown on Greek government bonds held by the private sector would force lenders to seek state support to recapitalize.

“Talk of haircuts ranging from 40 to 50 percent on Greek government bonds could mean resorting to the capital support backstop, the Financial Stability Fund (FSF) for some banks,” said analyst Maria Kanellopoulou at Euroxx Securities.

At 0753 GMT (3:53 a.m. EDT) the Athens bourse’s banking index .FTATBNK was down 12.4 percent to 328.9 points, with Attica Bank (BOAr.AT) losing 22.1 percent and Eurobank EFGr.AT down 16.5 percent.

“There is heightened uncertainty after reports of a significant increase in the private sector involvement (PSI),” said analyst Nick Koskoletos at Eurobank Securities.

Reporting by George Georgiopoulos

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