Lifting capital controls will take more time


Two years after the imposition of capital controls in Greece, confidence in the credit sector remains particularly fragile and is the main factor hampering a more substantial easing of restrictions, according to a survey conducted by Alvarez & Marshal for the Bank of Greece.

The survey has found that 60 percent of depositors “have little or no confidence in banks regarding the security of their deposits.” The vast majority of bank clients said that they would not withdraw their deposits from their accounts if the controls were lifted, but a great share of them do believe that there will be some capital flight.

Crucially, the A&M report concludes that it will be three or more years before the capital controls are lifted. A significant share of respondents consider the stability of the credit system to be “key” for the return of deposits, and the majority said they had been affected by the controls.

Among the survey’s other conclusions are that the imposition of capital controls was the result of the financial conditions in the country and that their lifting would signal a return to normality. It also concluded that people’s knowledge regarding the restrictions is insufficient.