Stournaras: Greek credit system healthy, credible

Stournaras: Greek credit system healthy, credible

The Greek banking system is healthy and has credibility but needs to be alert as challenges to financial stability remain high, Bank of Greece Governor Yannis Stournaras said on Tuesday.

Addressing FinForum 2023, “The Day After,” the central banker said that in view of the positive outlook of the Greek economy and the significant improvement achieved in restructuring the Greek banks’ balance sheets, it is safe to conclude that the Greek banking system, and the Greek economy, are no longer the black sheep of the eurozone and that they face the future with optimism.

Stournaras reiterated that the country will obtain investment grade in the near future, a development that will have a beneficial impact on the economy as it will boost economic growth and facilitate access to capital markets at a lower cost.

Banks will also benefit, he noted.

The central banker said that an increase in interest rates offered a short-term boost to net interest revenue but in the long term it could raise credit risk costs, operating costs and the cost of raising liquidity.

At the same time, the combination of high interest rates and the inflation rate are pressuring households, which could lead to an increase in nonperforming loans. 

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