Bank and securities firm officials on Wednesday offered a mixed reaction to a draft legislation over a stricter supervision of financial institutions in the country.
Addressing a hearing of the Parliament’s Economic Commission, Ioannis Papadakis, deputy governor of the Bank of Greece, said the bank was fully positive towards the new legislation as it offered a supervisory and safety net for banks.
Vasilis Rapanos, president of the Hellenic Bank Association, supported the new legislation but noted that certain provisions were in contrast with European corporate legislation and could face resistance in the European Union. Rapanos reassured that the Greek banking system was healthy and credible and said that capital withdrawn from Greek banks so far totaled 48 billion euros. Non-performing loans reached 10 pct at the end of 2010 and predicted that this trend would continue this year, while on the other hand Greek banks have rescheduled loans worth 20 billion euros -out of a total 254 billion euros- and stressed that a negative growth rate in new credit (-1.2 pct in July) remained significantly lower compared with a decline in GDP (-5.0 pct). Rapanos announced that bank saving deposits grew by 1.5 billion euros in August, reversing a several month decline.
The president of the Members Association of the Athens Stock Exchange, Alexandros Moraitakis, addressing the hearing said that although the new legislation was moving towards the right direction, solving short-term and urgent problems, however it did not offer answers to the big issues of the financial sector.