* Capital hole smaller than bailout money earmarked for banks
* Non-performing loans rocket to 107 billion euros
* Almost half of all loans in danger of non-payment
* For a results table: http://link.reuters.com/vuz85w (Recasts, adds detail)
By John O'Donnell and Francesco Canepa
FRANKFURT, Oct 31 (Reuters) - Greece's banks need to raise more than 14 billion euros ($16 billion) of extra capital to cover mounting unpaid loans, the European Central Bank said on Saturday as it announced the results of stress tests intended to rehabilitate Greek lenders.
The capital hole has emerged chiefly due to the rising number of Greeks unable or unwilling to repay their debt, after a dispute over reforms between the leftist government and international lenders almost saw Greece leave the euro.
As controls on cash withdrawals have squeezed the economy, loans at risk of non-payment have increased by 7 billion euros to 107 billion euros.
That is roughly half of all the credit given by the country's four big banks, according to the ECB. Almost 57 percent of the loans made by Piraeus Bank, the bank which fared worst, are at risk.
The fact, however, that the declared capital hole is smaller than the 25 billion euros earmarked to help banks in the country's bailout may encourage investors such as hedge funds to buy shares.
Germany's Deputy Finance Minister Jens Spahn said attracting investors would reduce the support needed from the euro zone's rescue scheme, the European Stability Mechanism.
The lenders are currently kept afloat by central-bank cash but there is a rush to get the recapitalisation finished.
If it is not done by the end of the year, new European Union rules mean large depositors such as companies may have to take a hit in their accounts.
Greece's Finance Minister Tsakalotos said on Saturday he was optimistic that Greece's banks would successfully recapitalise by the end of the year.
The stress tests looked at how many loans would go unpaid if the country's economy performs as expected up until 2017 - the so-called 'baseline'.
It also simulated a 'stress' scenario, where Greece dips further than expected. For this test, ECB officials assumed that the economy would shrink by more than 3 percent this year and next before growing modestly in 2017.
In checking the financial strength of the country's four main banks - National Bank of Greece, Piraeus, Alpha Bank and Eurobank - the ECB determined that even should the economy perform no worse than expected, the banks would still need almost 4.4 billion euros.
In the check, National Bank and Piraeus fared worst. To see a chart of the results, click here: http://link.reuters.com/tuz85w