BUSINESS

Keys for unlocking capital controls

YIANNIS PAPADOYIANNIS

TAGS: Banking

The lifting of the capital controls in Greece depends on three conditions, and only one has been fulfilled to date, stated Louka Katseli, president of both National Bank of Greece and the Hellenic Bank Association.

In an interview with Patra-based newspaper Peloponnisos, the former economy minister said that the successful recapitalization of the country’s banks was the first important step and the only condition to have materialized so far.

The second condition is the emancipation of the Greek credit system from the expensive funding of the emergency liquidity assistance (ELA) and the return to the normal – and cheaper – funding channel of the European Central Bank, which is expected to take place in the coming weeks.

But the most important condition is the third, namely the return of political and financial stability in Greece, which will bring about the restoration of confidence in the local banking system and the gradual return of deposits.

Regarding nonperforming loans, Katseli commented that they probably constitute the biggest single challenge that the country’s credit system has to face at this stage.

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