The Bank of Greece yesterday lowered banks’ capital adequacy ratio against foreign exchange risk to 8 from 10 percent, a move that will allow Greek banks to compete with their European peers on an equal footing. The central bank also said that banks may use their own internal models to calculate market risk. These “value-at-risk” risk management models will be an alternative way to calculate capital requirements against market risks related to banks’ foreign exchange and commodities portfolios. The decision may result in lower capital requirements and a more efficient use of equity funds by credit institutions. “The ability of credit institutions to use, under strict criteria, their own internal models to determine capital requirements more exactly is particularly desirable both from an economic and regulatory viewpoint,” the central bank said. Commercial banks’ positions in gold and in derivatives in gold will be treated similarly to foreign exchange, as the metal’s volatility corresponds more to that of foreign currencies. In another revision, the central bank said banks will now be required to report on their capital adequacy on a quarterly basis instead of semi-annually. (Reuters)

Greek exports to China, including Hong Kong, represent only 4.6 percent of imports from that country and the trade deficit, the largest with any country, seems to be widening by the year, according to 2001 figures of the research center of the National Exporters’ Association (PSE), released in view of Prime Minister Costas Simitis’s forthcoming visit to China. Exports rose 27 percent to $37 million in the 11 months of 2001 from a year earlier, but imports from China grew 17 percent to $771 million. Exports, whose small size and wide fluctuations do not allow for the discernment of any stable trend, were comprised primarily of fertilizers (41 percent) and marble (32 percent). Imports from China, by contrast, grew at high and steady rates during the 1990s, multiplying six times.

Greek firms must urgently adopt the rules of corporate governance given that the Greek capital market has been upgraded to developed status, Athens bourse Chairman Panayiotis Alexakis said in Thessaloniki yesterday. “The rules of corporate governance contribute to improved transparency, management and efficiency in a firm,” he said at an event held by the Northern Greece Industrialists Association (SBBE). Other speakers referred to studies showing investors being more ready to buy such firms’ stocks at higher prices. SBBE Chairman Dimitris Symeonidis said the legal framework for corporate governance must be based on encouraging firms to voluntarily adapt.

The Development Ministry yesterday inaugurated the country’s information center for the European Out-of-Court Settlement Network for cross-border disputes between consumers and firms. The service will be operated by the ministry’s consumer protection directorate which has branches in all prefectures.

Alpha Bank Chairman Yiannis Costopoulos yesterday inaugurated a new wing in Bucharest of packaging materials firm M.J. Maillis Romania, a member of the Greek group. The firm plans to invest $2 million more in the medium term.