ECB will continue funding banks

THE banks will continue to get funds from the European Central Bank and will have three years in which to sell their non-core assets — both key requests by the Government as part of the bank restructuring.

In return the Government has agreed not to force losses on senior bondholders but limit it to cuts of about 75% on the €7bn held by subordinated bondholders.

This will give the Government a substantial amount of the €7bn they need, in addition to €17bn from the Pension Reserve Fund, to raise the €24bn to recapitalise the banks.