SHARES in Greek banks have plunged, dragging down the entire Greek stock market on new tensions over recapitalisation of Greek banks and delays to quarterly results.
The Greek banking sub index plummeted 15.97 per cent on Monday over unresolved recapitalisation, tied to last-minute efforts to complete conditions for new debt funding to avert bankruptcy for Greece.
And the main market index closed with a fall of 6.28 per cent after the finance ministry said Greek banks would not be able to swap their holdings of national debt.
The ministry also said results for the banks for the second quarter of this year would be delayed by a month until November 30 because of delays in recapitalisation.
The ministry made its announcement shortly after a meeting between Finance Minister Yannis Stournaras and the Greek banking federation to discuss the plight of the banks.
The ministry said that at the meeting, the possibility Greek banks could swap their greatly devalued Greek bonds for bonds issued by the new European Stability Mechanism "was ruled out".
Stock market dealers said this caused bank share to plunge, dragging down the entire Athens stock index.
Greece hopes to help recapitalise its banks, hard hit by the national debt, deep recession and flight of capital, with money from the next instalment of rescue funds from the IMF and EU, which still hangs on completion of new reforms.
The critical matter of recapitalising the Greek banks, being kept going with various forms of funding on especially easy terms from the European Central Bank, is far behind schedule.
Recapitalisation hangs on completion of the latest audit and agreement on extra budget action and reforms between Greece and the International Monetary Fund, European Union and European Central Bank.
Without payment of the next instalment, Greece faces bankruptcy next month.
The banks took a body blow when Greek debt was restructured under the latest rescue arrangements, which forced private holders of Greek debt to take a big loss on the money owed.
Greece, which has been in recession for five years, must set its financial sector back on its feet to underpin economic growth as the government enacts austerity measures worth 13.5 billion euros ($A17 billion) demanded by creditors in exchange for their aid.
The German magazine Spiegel reported on Sunday international auditors would demand Greece carry out another 150 reforms to its economy, and suggest that holders of Greek debt, often the banks, accept further losses.
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