The recapitalization bill for Greece's main banks should be lower than €20B ($22.7B), two senior bankers with direct knowledge of the matter told Reuters, stating that National Bank of Greece (NYSE:NBG), Piraeus Bank (OTCPK:BPIRY), Alpha Bank (OTCPK:ALBKY) and Eurobank (OTCPK:EGFEY) are currently undergoing stress tests by the ECB.
PM Alexis Tsipras reiterated on Friday that the recapitalization would need to be completed by the end of the year, prior to new regulations that would require depositors to be bailed in before eurozone rescue funds are used.
Greek stocks are deep in the red again, dragged down by another near 30% plunge in banking stocks, as investors react to continuing questions about a new bailout from the EU and the country's worsening economy.
The ASE Stock Index plunged 16.2% on Monday, the worst fall on record, after the Athens Stock Exchange reopened following a five-week shut down.
Eurozone finance ministers have begun discussions on whether to give Athens a short-term financing package - expected to be worth about €7B - after Greek lawmakers passed a bailout agreement late last night.
Many are also watching whether the ECB will extend emergency liquidity assistance to Greek banks.
Although 229 members of the 300-seat parliament approved the new austerity measures, 32 members of PM Alexis Tsipras' Syriza party voted "No", a sign the premier may have lost his majority.
European stocks are on the rise following the approval: FTSE 100 +0.5%; DAX +1.3%; CAC 40 +1.3; Euro Stoxx 50 +1.4%.
Up next: the German Bundestag will vote on Friday whether or not to approve the new rescue, however, talks over securing a new €86B bailout are likely to last for another four weeks.
Update: Eurozone finance ministers have agreed in principle to extend a €7B bridge loan to Greece.
Plans for Greece advanced (slowly) in the Eurogroup on Sunday as the zone's leaders headed into a summit following hours of work by their finance ministers, who have a working statement for discussion.
The statement suggests propsects of a new rescue for Greece with quite strict conditions, but also an alternative option: a "time-out" from the eurozone, a temporary Greek exit that could last a few years: "In case no agreement could be reached, Greece should be offered swift negotiations on a time-out from the euro area, with possible debt restructuring."
That part was in brackets, showing it wasn't unanimously accepted by the 19 eurozone members and is likely the result of German pressure. It's reported that Germany had drawn up plans in a separate paper for a five-year Greek exit from the euro.
A deal on Greece wouldn't be made "at all costs," says German Chancellor Angela Merkel.
Another alternative floated is Greece putting tens of billions of euros of assets in escrow to creditors, collateral against further aid loans.
After 3 a.m. in Athens, and following hours of debate, Greek lawmakers voted overwhelmingly to endorse a reform proposal that the government has submitted to the Eurogroup -- and which is fairly similar to the one that voters rejected in a July 5 referendum.
The vote came ahead of an eventful weekend of talks with European creditors, who have a decidedly mixed reaction to the proposal so far. France's Francois Hollande calls it "serious, credible" and reflective of Greek determination to stay in the eurozone; Lithuania's president Dalia Grybauskaite says it "will really not be enough."
The vote: 251 for, 32 against, 8 abstain, according to Bloomberg.
Reuters reports (citing "a senior Greek banker") Greece's banks "will need an estimated 10 to 14 billion euros of fresh capital to keep them afloat and more time before they reopen" even if a deal is reached with creditors on Sunday.
The banks are due to reopen on Tuesday, but Reuters' source says they're "optimistic" branches can be opened by the end of next week. Athens would seek to raise capital from private investors, but could turn to the European Support Mechanism's Direct Recapitalization Instrument (DRI) if that fails.
Greek lawmakers have now authorized Prime Minister Alexis Tsipras' proposed July 5th bailout referendum, increasing the chances Athens will default on a key payment to the IMF on Tuesday and exit the eurozone.
Finance ministers on Saturday rejected Greece's request to extend its current bailout in order to cover the period leading up to the vote.
As uncertainty hits the nation, anxious Greeks are lining to withdraw cash. More than a third of the country's ATMs ran dry yesterday and there are worries banks will not open after the weekend.