The high competition among Greek banks was praised by the chairman of the Hellenic Bank Association (EET) and head of Alpha Bank Yiannis Costopoulos during the third banking forum organized in Athens by The Economist, adding that for the size of Greece and its market, the number of banks is very good and that they are very competitive. «We are talking about a country of 10 million people and we compare how many banks there are in Germany, how many in Britain and France,» said Costopoulos, responding to criticism about an oligopoly in the domestic banking system. He quoted National Bank of Greece Chairman Takis Arapoglou, saying, «He is right in saying that three strong banks are better that five weak ones; competition matters and it’s here, I can assure you,» which was interpreted as a hint for further concentration in the banking sector. The EET head also said consumers must be protected: «As retail banking activity grows, so does the need for better protection in transparency and information of the services for consumers. Serious efforts are made at EU level for regulations that will strengthen cross-border retail banking services.» He further referred to the importance of the Greek banking system’s liberalization for the growth of retail banking in the last few years, which «continues to grow at a speedy pace. It is worth noting that according to Bank of Greece data, bank loans to households, excluding mortgages, have risen by an average rate of about 35 percent in the period from 1999 to 2003,» Costopoulos remarked. National Bank Vice President Yiannis Pechlivanidis underscored the positive prospects for the further expansion of retail banking in Europe, and Greece in particular, forecasting that in the next couple of years the growth rate of consumer loans and mortgages will reach double digits. «The revenue of European banks from retail banking will keep rising by 8 percent, with yearly earnings increasing by 12 percent in the next two years as retail banking contributes to banking earnings by 60 to 70 percent,» Pechlivanidis predicted, saying the question now is whether this growth can be sustained to secure earning levels. Vyron Ballis, deputy CEO at EFG Eurobank Ergasias, described today’s intense competition by saying that «clients are less loyal than ever and banks are more determined than ever to adapt their charges.» The two greatest challenges to retail banking now are the maintenance of clientele through good face-to-face contact at branches and quality services, as well as expanding them by convincing clients to start a new banking relationship in which they can find all services and essential know-how. A third challenge is expanding relationships with current customers through cross-selling and upscaling a bank’s products, Ballis said. Emporiki President and CEO Giorgos Provopoulos branded the Basel II Treaty a great step toward a more rational link of risk with return. «The amendment to the system for observing the banks’ capital sufficiency will bring important changes to regulations, bank behavior and the banking system in total.» To make the most of the treaty banks will depend on their clients’ credit status and their preparation, Provopoulos said, urging Greek banks to adapt to the new situation.