The Bank of Greece’s Financial Stability Report records an improvement in the key parameters of Greek banks, where it is noted that Greek banks are in a better position than in the past to face possible turbulences, in turn strengthening the resilience of the Greek economy.

However, as governor Yiannis Stournaras points out, the maintenance of inflation at an even higher level combined with the increased interest rates of the ECB and the slowdown in the rate of economic growth is testing the resilience of households and businesses and may contribute to the creation of new non-performing loans.

At the same time and with regard to the prospects, it is pointed out that the international environment is the biggest challenge. The aggravation of geopolitical risks with the expansion of war conflicts, but also with the growing trade competition between the US and China, can have significant negative effects on the global economy and, by extension, on financial stability. In addition, any sharp deterioration in international financial conditions may cause turbulence with adverse effects both on the financial situation of businesses and households and on the Greek banking sector, as banks’ efforts to extend credit will become more difficult.