Please describe in general the banking system in Greece.
Banks in Greece are one of the most significant pillars of the economy. In the past decade they have extensively funded all major investment activities and the modernization of the infrastructure of the country along with consumers and SME’s.
A major distinction which can be drawn is the one between public and private banks. The number of banks owned or controlled by the Greek State has significantly been reduced in the last years. Today, National Bank of Greece (to a certain extent), Agricultural Bank of Greece and the Post Savings Bank constitute the main representatives of state influence in the economy. Private banks include Alpha Bank, EFG Eurobank Ergasias (a decision for the merger of these two banks with the participation of the Qatar Foundation creating the biggest bank in Greece and one of the biggest in Southeastern Europe was being implemented at the time when this analysis was written), Piraeus Bank, Marfin Egnatia Bank, Citibank and Millenium Bank The French banks have “invaded” the Greek market with Societe General acquiring Geniki Bank and Credit Acrigole acquiring the Commercial Bank of Greece. Furthermore, certain foreign banks have established themselves in Greece either through a branch or a representative office.
The Bank of Greece is the regulatory authority in the country. It is a member of the Eyrosystem since Greece is a member of the Eurozone and its Director sits in the Board of the European Central Bank.
The Greek banks are of course suffering from the severe financial situation of the country. Although the financial crisis in Greece was mainly a crisis of the Greek State the banks where indirectly affected as they lost access to the market and had to find refuge to the European Central Bank and the Bank of Greece for liquidity in a number of occasions. It is highly expected that further mergers and acquisitions will take place in the banking sector. As a president of one of the major banks in Greece has said “there is space for 2,5 banks in the Greek economy.” Furthermore, it is highly likely that following the implementation of the European Council decisions of October 27th, the Greek State will become a major shareholder in a number of banks, thereby raising concerns about their lending policies and a potential lack of independence of the banking sector.