Role and tasks of the Bank of Greece

The role of the Bank of Greece

The Bank of Greece is the central bank of the country.

It is an independent authority exercising a public function: it pursues price stability, i.e. control over inflation (the rate of increase in prices) and the stability and smooth operation of the financial system (banks, insurance companies, etc.).

While remaining institutionally and operationally independent, it is subject to democratic control by Parliament.

 The Bank of Greece is an integral part of the Eurosystem and, together with the other national central banks of the euro area and the European Central Bank, participates in the formulation of the single monetary policy for the euro area.

The Bank of Greece is not a commercial bank. A citizen cannot deposit money with the Bank or take out a loan from the Bank. In a sense, the Bank of Greece is the banker of banks, i.e. it accepts deposits from and lends to commercial banks operating in the country.

Independence and accountability

The Bank of Greece is independent. According to the Treaty on the Functioning of the European Union and its Statute, the Bank of Greece does not seek or take instructions in the performance of its tasks.

The experience of many countries over many years has shown that the institutional independence of central banks is crucial for their ability to achieve their primary objective of maintaining price stability.

The institutional framework of the Bank of Greece combines the fundamental requirement of independence with a legitimate demand for accountability and scrutiny.

The Bank is accountable to Greek citizens through the Hellenic Parliament.

Tasks of the Bank of Greece

The Bank of Greece is responsible for conducting monetary policy, while in the context of the Single Supervisory Mechanism it is the national supervisor of the Greek financial system.

As part of its tasks, the Bank of Greece:

Contributes to the maintenance of price stability

The Bank of Greece pursues price stability by conducting monetary policy. The Eurosystem’s monetary policy aims for an annual inflation rate of below but close to 2% over the medium term.

In the euro area, monetary policy decisions are taken in a centralised manner by the Governing Council of the European Central Bank (ECB) and are implemented in a decentralised manner by the national central banks.

In this context, the Bank of Greece participates in the formulation of the single monetary policy for the euro area. Its Governor is a member of the Governing Council of the European Central Bank, which decides mainly on interest rates and the terms on which commercial banks can borrow money from central banks. This, in turn, affects the interest rates at which individuals and businesses borrow from commercial banks.

Furthermore, the Bank implements monetary policy decisions in Greece. In particular, it conducts monetary policy operations (main and longer-term refinancing operations) whereby it provides liquidity to domestic credit institutions. It also offers standing facilities to credit institutions, providing and absorbing liquidity through the marginal lending facility and the deposit facility, respectively. Finally, it maintains the reserve accounts held by the banks operating in the country.

Safeguards the stability of the financial system

The financial system consists primarily of credit institutions (or banks, as they are commonly) and insurance companies.

Banking operations are part of our everyday lives. Banks are where people deposit their savings and borrow from. It is also through banks that people receive their wages, pay their bills and obtain cash.

Insurance companies, on the other hand, insure and compensate policyholders for risks to their lives and property.

The Bank of Greece, in cooperation with the relevant European authorities, monitors the banking risks that threaten financial stability, supervises credit institutions and insurance companies operating in the country and is responsible for their resolution, where necessary. It also oversees payment and settlement systems.

More specifically:

It exercises macroprudential supervision

The Bank of Greece monitors the financial system and identifies risks and vulnerabilities.

The Bank of Greece monitors the financial system and identifies risks and vulnerabilities. Under its Statute, it has an explicit mandate to strengthen the resilience of the financial system and reduce the build-up of systemic risks that could impair the system’s ability to provide essential financial products and services, with potentially serious repercussions on economic growth and citizen welfare.

With a view to safeguarding financial stability, the Bank implements macroprudential policies in cooperation with the European Central Bank and the European Systemic Risk Board.

Click here for the tasks of the Financial Stability Department

It supervises credit institutions

The Bank of Greece is the authority responsible for the supervision of credit institutions operating in the country. 

The Bank of Greece is the authority responsible for the supervision of credit institutions operating in the country. The objective of its supervisory function, which is performed in cooperation with the European Central Bank in the context of the Single Supervisory Mechanism, is to ensure the stability and smooth operation of the financial system. To this end, the Bank regular or ad hoc on-site inspections at the institutions it supervises.

However, the Bank of Greece is not responsible for supervising bank-customer relations, except for matters concerning the transparency of procedures, terms and conditions of banking transactions.

Click here for the tasks of the Banking Supervision Department and the Supervised Institutions Inspection Department.

It supervises private insurance

In addition to credit institutions, the Bank of Greece is also the authority responsible for the supervision of  the private insurance system.

In addition to credit institutions, the Bank of Greece is also the authority responsible for the supervision of the private insurance system. The objective of such supervision is to protect policy holders and beneficiaries, ensure the smooth functioning of the private insurance market and bolster consumer confidence, and to safeguard overall financial stability in Greece. In the same context, the Bank of Greece monitors developments also in countries where Greek insurers and reinsurers operate.

Click here for the tasks of the Department of Private Insurance Supervision

It is responsible for the resolution of credit institutions

The Bank of Greece is the national authority responsible  for the resolution of credit institutions operating in the country.

The Bank of Greece is the national authority responsible for the resolution of credit institutions operating in the country. In cooperation with the Single Resolution Board, it draws up resolution plans and selects the appropriate actions to ensure the continuity of critical functions of the institutions being resolved and eliminate risks to financial stability.

Click here for the tasks of the Resolution Department.

It oversees payment and settlement systems

The soundness and efficiency of payment systems is an essential condition for financial stability.

The soundness and efficiency of payment systems is an essential condition for financial stability.

The Bank of Greece oversees payment systems with a view to ensuring their stability, reliability and efficiency.

In order to more effectively carry out its tasks with regard to payments systems, the Bank of Greece monitors international developments in the institutional framework and infrastructures for fund transfers; collects, compiles and analyses payment statistics; issues statistical releases and explores ways to improve the methodologies for addressing the risks associated with payment systems and infrastructures.

The Bank of Greece also operates the Electronic Secondary Securities Market (HDAT) and manages and operates the System for Monitoring Transactions in Book-entry Securities (BOGS).

Click here for the tasks of the Payment Systems Department

It issues banknotes

Banknotes and coins are used on a daily basis by almost everyone.

Banknotes and coins are used on a daily basis by almost everyone. Their value derives from a shared trust that they can be used as a medium of exchange, as a unit of account, and as a store of value. This value reflects the credibility of the issuing central bank.

The Bank of Greece issues euro banknotes, which have the status of legal tender. It supplies commercial banks with euro banknotes and coins, enabling them to respond to customer demand. The Bank of Greece also exchanges damaged banknotes for new ones and withdraws them from circulation.

The Bank contributes significantly to the prevention of counterfeiting by raising public awareness of the security features of euro banknotes and coins. The Bank of Greece Banknote Printing Works (the National Mint) produces euro banknotes and coins, and prints security documents such as passports, lottery tickets, etc.

Click here for the tasks of the Cash Department and the Bank of Greece Banknote Printing Works.

It is actively involved in the prevention of money laundering

The Bank of Greece is also the national authority responsible for the prevention the use of the financial system

The Bank of Greece is also the national authority responsible for the prevention the use of the financial system for money laundering and terrorist financing.

It manages foreign exchange and foreign reserve assets

The Bank of Greece holds and manages the country's foreign reserve assets, including the foreign currency and gold reserves of the Bank of Greece and the Greek government.

The Bank of Greece holds and manages the country's foreign reserve assets, including the foreign currency and gold reserves of the Bank of Greece and the Greek government.

Cilck here for the tasks of the Financial Operations Department

It acts as treasurer and fiscal agent of the government

The Bank acts as treasurer and fiscal agent of the government, i.e. it keeps the government’s accounts and carries out transactions on its behalf.

The Bank acts as treasurer and fiscal agent of the government, i.e. it keeps the government’s accounts and carries out transactions on its behalf.

Government revenues are deposited with the Bank, while government grants and, in general, domestic or cross-border transfers to end beneficiaries and all types of government expenditure (e.g. for public debt servicing, the public investment programme, defence, subsidies, operating expenses of public services, procurement, etc.) are disbursed by the Bank.

Click here for the tasks of the Government Financial Operations and Accounts Department.

It provides public informationconducts research and analysis and produces publications

By its reports, studies and reliable statistical data, the Bank of Greece informs the citizens about the euro area monetary policy and about the Greek economy and provides reliable information to the government and other stakeholders.

By its reports, studies and reliable statistical data, the Bank of Greece informs the citizens about the euro area monetary policy and about the Greek economy and provides reliable information to the government and other stakeholders.

The Bank conducts significant research in the fields of monetary policy, economic growth and regional development, financial markets, supervisory policy, and climate change. The studies focus on current developments as well as prospects, including economic and inflation forecasting for Greece. Part of the research output is published in the Working Papers series, the Bank's Economic Bulletin, or features in the Annual Reports or the Monetary Policy Reports.

Click here for the tasks of the Economic Analysis and Research Department.

It collects and compiles statistics

The Bank of Greece collects, compiles and releases  monetary and credit statistics, compiles the country’s balance of payments and financial accounts and, in general, collects and publishes data on the Greek economy.

The Bank of Greece collects, compiles and releases monetary and credit statistics, compiles the country’s balance of payments and financial accounts and, in general, collects and publishes data on the Greek economy.

This strong base of statistical data supports the Bank’s functions as a monetary authority and as a banking supervisor. At the same time, it serves as a basis for a wide range of macroeconomic and macroprudential analyses.

Click here for the tasks of the Statistics Department.

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