On Friday, the European Commission authorized the €10 billion ($13.42 billion) Hellenic Financial Stability Fund, which will provide capital to Greek banks when capital is not available through traditional, generally private, sources. The fund, which is set to terminate in 2017, was previously provided for in a Memorandum of Understanding signed in May by the European Commission, the European Central Bank and the International Monetary Fund (IMF) and is part of the broader Greek support mechanism sponsored by the Euro-area States and the IMF.

After a requesting bank’s restructuring plan is approved by the Commission, the bank will receive an equity infusion in exchange for convertible, redeemable preferred shares or, under certain conditions, common shares. The bank will be required to pay remuneration of 10% on the preferred shares and may redeem the shares after five years. Among other restrictions, participating banks will be prohibited from paying dividends on common stock.