Changes are expected to take place in the banking landscape in the new year, as worsening conditions demand that lenders adjust to the new environment. Deteriorating economic conditions, rising nonperforming loans, uncertainty about the outcome of Greece’s fiscal progress and the adoption of tougher capital requirements have combined to force changes in the industry. Banks are also feeling the pressure to change from liquidity problems which they are unable to fix since their solution hinges on the improvement of the government’s fiscal health. Smaller banks are finding themselves in a more difficult position. Steep drops in income, along with a sharp rise in bad loans, are harming their capital adequacy and increasing their need for a capital boost. However, the weakening financial position of bank shareholders and generally weak sentiment in the sector have raised concerns about their ability to provide the necessary cash injection. Additionally, smaller banks are experiencing even larger liquidity problems due to the fact that they don’t have access to the same tools as their larger peers. Analysts believe that smaller lenders will need to adopt a defensive strategy in order to boost their position and gain time that will help them survive in the new environment. They believe that smaller banks will either hook up with larger peers or merge with rivals in order to bulk up. Small to medium-sized banks control about 30 percent of the market. Of course the new harsh economic reality is also threatening large banks, which are however in a more advantageous position. They offer more technologically advanced facilities and more experienced human resources, helping provide them with more solutions to the crisis. Due to their size, they also have better access to wholesale lending.