Standard & Poor’s cut the credit ratings of four Greek banks and put the country’s banking system as a whole into a higher risk category on “heightened economic and industry risks for the Greek financial system.”

National Bank of Greece SA , EFG Eurobank Ergasias SA , Alpha Bank SA and Piraeus Bank SA  all had their long-term counterparty credit ratings lowered to B+, S&P said in a statement today. The country’s banking industry risk assessment was downgraded two notches to the fourth-lowest, the same level as Romania, Bulgaria, Lithuania and Hungary.

The cut comes two days after S&P lowered the rating on Greece’s sovereign debt to BB- from BB+ on concern that a European debt crisis resolution mechanism would incur losses on private creditors.

Greek banks have large holdings of government bonds, leaving them dependent on the European Central Bank for liquidity, while the country’s recession has led to falling deposits and more non-performing loans.

“We expect Greece’s tough economic and operating environment to adversely affect the Greek financial system,” S&P said in the statement. “We anticipate further deterioration in banks’ domestic loan books in 2011, amid Greece’s still-sharp economic recession.”

S&P kept the banks on CreditWatch negative today, meaning further deterioration in their ratings is more likely than an improvement.