History of the Bank of Greece

The Bank of Greece is Greece’s central bank and was established in 1927 by virtue of the Geneva Protocol of 15 September 1927, whereby a loan of £9 million was extended to Greece.

Up to that time, the note-issuing privilege was vested in the National Bank of Greece, which however operated as a commercial bank as well. The League of Nations, which brokered the loan agreement, considered that the note-issuing privilege was incompatible with commercial banking business. It was thus decided that the National Bank of Greece would remain a commercial bank and waive the note-issuing privilege in favour of the newly-established Bank of Greece, which started operations on 14 May 1928.

The establishment of the Bank of Greece was a major reform in the domestic financial system and, despite the initial difficulties, the Bank consolidated its position as the regulator of the banking sector and guardian of financial stability. Following the construction of its head office at 21, Panepistimiou Street, the Bank set up an extensive network of branches across the country. Eminent economists of international repute have served as its governors, four of whom (Emmanuel Tsouderos, Alexander Diomidis, Xenophon Zolotas, Lucas Papademos) were appointed prime ministers at critical moments of Greece’s history and one (Lucas Papademos) was elected Vice-President of the European Central Bank (ECB).

Upon Greece’s entry into the euro area, the Bank of Greece became a member of the Eurosystem, which consists of the ECB and the national central banks of the EU Member States that have adopted the euroas their currency. As such, the Bank of Greece participates in monetary policy making for the euro area and supervises the Greek financial system.

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