ECONOMY

Bank funding costs may rise by up to 500 mln euros

A sharp increase in the premium investors demand to hold Greek bonds over benchmark German Bunds may bump up funding costs for Greek banks by 400-500 million euros in 2010, National Bank Chief Financial Officer Anthimos Thomopoulos said yesterday. Greek lenders, which fund an average of 30-40 percent of operations via interbank lending, or by issuing corporate bonds, are being forced to pay for higher borrowing costs due to the country’s rising risk premium, which is tied to Greek sovereign debt. Thomopoulos added that the fate of Greek banks goes «hand in hand» with that of the government’s efforts to tame the European Union’s biggest deficit and restore investor confidence in Greece. The growth prospects for Greek banks are «not easy,» he told a bank conference.