Comparisons that find Greek interest rates higher than in the rest of the European Union are misplaced, senior bank officials tell Kathimerini. They reflect the differences in market size (which in Greece is small), the country’s lower credit rating, the higher operational costs of banks, the higher credit risk costs and inflation, higher deposit interest rates and the low maturity of the local bank market. The same sources suggest that the rapid growth of retail banking entails an increased risk that cannot be ignored. They note it makes no sense to compare mature markets with developing ones, as in comparing the Dutch retail market, liberalized a century ago, with Greek consumer credit, which opened up three years ago. The spreads (the difference between lending and deposit rates) of Greek banks keep shrinking, they add, as a result of stiff competition. In some loan categories, such as mortgages, interest rates in Greece stand lower than the eurozone average. «The more the local market matures, the more competition will stiffen and interest rates will fall,» argues Anthimos Thomopoulos, director general and CFO of the National Bank of Greece. Deposit interest rates are considerably higher in Greece than the eurozone average, he stresses, which means more costs for Greek banks. He highlights the increased operational costs of local banks due to the existing limitations, the credit risk cost and high inflation (at 3.6 percent in Greece against an EU average of 2.4 percent), which affects interest rates considerably. His counterpart at Alpha Bank, Marinos Yiannopoulos, echoes Thomopoulos, underscoring the higher operation costs of Greek banks. He notes that the capital costs for local banks are higher than those for European banks, as the credit rating of Greece is lower than that France or Germany, doubling the credit risk costs. The country’s geography adds to the costs for banks, forcing them to maintain a branch network in remote areas and on far-flung islands. Finally, Yiannopoulos believes that the increased risk created by the rapid growth of the Greek market should not be ignored, while in Europe banks operate in a liberal environment for decades.