ECONOMY

Greek banks are safe, assures PM

Prime Minister Costas Karamanlis assured investors yesterday that Greek banks are healthy and secure after the US-born financial crisis spread to European countries. «The Greek bank system is healthy, secure and resilient to the shocks that are taking place in the banking systems of other countries,» said the premier. Karamanlis joined other senior government officials from around Europe in trying to calm investors after stock markets tumbled Monday on news the crisis was claiming victims on both sides of the Atlantic. Italy’s Economy Minister Giulio Tremonti said yesterday that the consequences of the crisis on the Italian banking and insurance system remain contained, while Spain’s Finance Minister Pedro Solbes said its central bank policies are shielding financial institutions from turmoil. The governor of the Bank of Greece, the country’s central bank, said in Athens that Greek lenders have limited exposure to problem credit instruments or troubled international money markets. «Greek banks’ exposure to problematic credit instruments is limited,» Giorgos Provopoulos said after meeting with the heads of Greece’s four largest banks – National, Eurobank, Alpha and Piraeus. According to sources, the exposure of Greek banks and their customers to Lehman Brothers shares and bonds reaches 270 million euros; however, it is not yet clear what amount they will finally recover. Shares in Greek banks that trade on the Athens bourse have lost 44 percent in the last year on growing fears that the rising cost of interbank lending will weigh on profit figures. Provopoulos said 90 percent of loans are funded by deposits and «therefore the banks’ dependence on international money markets and capital markets is low.» «Despite this… continued turmoil on international markets demands very careful steps and actions by banks,» he added.