Statement by the Governor of the Bank of Greece Mr George A. Provopoulos
30/09/2008 - Press Releases
Today, I met with the Presidents of the largest Greek banks
and discussed current developments. As is well-known, the turmoil in
international financial markets is continuing, exerting strong pressures on
several banks in other countries.
The common view in our meeting was that the Greek banking
system is sound, safe and stable. This assessment is based on the following:
a. over 90% of bank lending is financed by customer deposits
and, therefore, the reliance of Greek banks on international money and capital
markets is low. Hence, Greek banks are less affected by the ongoing turmoil in
b. Greek banks’ exposure to toxic financial products is
limited. In the last decade, banks have benefited from a favourable economic
environment in Greece and S.E. Europe. This enabled them to take advantage of
considerable investment opportunities in traditional banking activities, without
engaging in riskier ventures;
c. Greek banks’ capital base is strong, supported by high
profitability in the last years. Their leverage ratios stand at reasonable
levels, well below those of the banks recently hit most heavily.
The Bank of Greece, as the supervising authority, remains
vigilant. It is monitoring developments closely, in order to safeguard the
stability of the Greek banking system and to protect depositors and other bank
customers. The soundness of the Greek banking system notwithstanding, the
continuing turbulence in international markets warrants very cautious steps on
the part of banks.
Against this backdrop, our discussion today gave me the
opportunity to suggest appropriate courses of action.