Greek banks have come a long way since the domestic financial market was deregulated, and are now well equipped to compete with their foreign counterparts and play a leading role in the Balkans, Theodore Karatzas, governor of National Bank, said yesterday. Addressing an Economist conference, Karatzas said Greek banks have restructured their operations and products in the last few years in line with the changes in the country brought on by Greece’s membership of the eurozone. Modernization together with deregulation mean that «Greek banks have improved their competitive edge» to the point where foreign banks no longer have a comparative edge in the corporate sector, he said. Cooperation rather than competition is the key word now. «Greek and foreign banks are collaborating, with the latter promoting their products via the former’s local network,» Karatzas said. He also suggested the possibility of a foreign bank taking over a local bank even though cross-border acquisitions to date have been less than successful. Karatzas said emerging markets are expected to be the next growth area, with the mass market seen as the one with the best prospects. Technology, low entry costs and their relatively better capitalization and favorable costs of capital mean banks from developed countries can thrive in the mass market in emerging countries. Karatzas pointed to the advantages Greek banks have in neighboring countries. The favorable Greek economy, which has allowed the local financial industry to stake out a leading position in the region, is one of these. A second advantage, he says, is that these countries are now at the stage where Greece was 50 years ago. «A third reason is that Greek banks are now linking their subsidiaries with their support services, product and client network in Greece,» he said.