Greece activates rescue fund to save Proton Bank

Greece's central bank said on Monday it activated a bank rescue fund to save Proton Bank , effectively nationalising the small lender that is under investigation for possible violation of the country's money-laundering laws.
Greece and its international lenders have set up a capital support backstop, the Financial Stability Fund (FSF), as a safety net for banks that need to recapitalise but cannot raise funds in the market and to prevent systemic risk.
"After recommendation by the Bank of Greece, the Finance Ministry proceeded to apply to Proton Bank a new law about the restoration of banks," the Bank of Greece said in a statement
The Bank of Greece said Proton was split into a "good bank" where all of its private sector, government deposits and sound assets were transferred.
The good bank will have the FSF backstop as its sole shareholder and retain the trade name Proton.
"The 'good bank' is well capitalised, with a capital adequacy ratio that is well above the regulatory threshold. It has access to euro-system liquidity through the Bank of Greece," the central bank said.
The central bank said the licence of the old Proton Bank was withdrawn and it was put into liquidation. The proceeds of the liquidation will be used to cover the claims of third parties. Proton shareholders will rank as last claimants.
"The new bank, free of the deficiencies of the previous bank, is financially sound and will continue normally its operations," the Bank of Greece said.