Greek National Bank chief: Greece could lift capital controls within months

Political and economic stability as well as the effective management of non-performing loans (NPLs) are two of the five main preconditions that would allow the domestic banking system contribute effectively to Greece’s growth and provide loans to small and medium-sized businesses, the head of the Hellenic Bank Association, Louka Katseli, said on Tuesday.

Katseli, who is also the governor of the National Bank of Greece (NBG), was speaking at an event organized by Greek-German Business Forum and the Economist Conferences on Greek innovation and the role of start-ups in the economy’s return to growth.

The NBG governor noted the first precondition is to complete the country’s program review to achieve political and economic stability in the country so that banks can help the real economy. “The banking system, not only in Greece but also internationally, is not isolated from the wider economic and political environment. The successful completion of the first review of the Greek program is the first key parameter in building confidence and reducing uncertainty,” she said.

The second precondition is ensuring a climate of stability to the financial system that would allow the return of bank deposits. The third is the effective management of NPLs and specifically of business portfolios held by banks.

The fourth element is creating innovative funding tools to attract investments, by limiting the cost of money, especially for small and medium-sized businesses, as well as improving corporate governance in the banking system. Katseli said the last precondition is to have a comprehensive rebranding of the Greek financial system.

Capital controls in Greece could also be lifted

According to her, capital controls in Greece could also be lifted soon if three important terms are met.

Speaking to Deutsche Welle, Ms Katseli expressed optimism that such a development could happen in the coming months.

“It will depend on the steps to be taken in the coming months. The steps are specific. First, the evaluation of Greek reforms must be completed, which we hope will happen as soon as possible. Secondly, the ECB should put us in the normal flow of funding, so that we as Greek banks can borrow like all other European banks with low cost. I imagine that, immediately after, the restrictions on capital movements will be lifted. I hope all this happens in the coming months”, she said.

Furthermore,, Ms Katseli assured that after the recapitalization process, Greece’s banking system is on track and all problems are manageable. Nevertheless, she stressed that growth is impossible with capital controls.

RELATED TOPICS: Greece, Greek tourism news, Tourism in Greece, Greek islands, Hotels in Greece, Travel to Greece, Greek destinations , Greek travel market, Greek tourism statistics, Greek tourism report