The head of the Finance Office of the Prime Minister, Alexis Patelis, appeared optimistic about the course of the Greek financial system, speaking at the conference “Banking Summit: Paving the way for growth”, which organizes the Money Review.
Mr. Patelis noted that “in 2019, half of the portfolio was with red loans, so you could not talk about a banking system that can give loans. “The primary goal was to change that.”
He added that “from ’16 to ’19 there was no serious settlement of red loans”, while he added that “soon our fellow citizens will see their debts reduced. There were banks that were considered to be in a difficult situation, we saw a series of capital increases. “Now we are talking about a completely different context.”
Continuing, he pointed out that the problem is behind us and that in front of us is the fact that “banks must prove why they exist: to give loans, to return to profitability, to give dividends”.
As he stressed, “all four systemic banks are ready to channel loans to the private sector through the Recovery Fund”, emphasizing that “they will provide writing samples soon”. “The government is helping by facilitating the process.”
Mr. Patelis estimated that in addition to lending, the big challenges are digitalization and competition, saying that “from now on other players will enter the market that will bring credit expansion” and gave in this context the example of Viva Wallet, which “has plans for credit expansion to small and medium-sized enterprises”.
“We will soon see a series of credit products that will surprise us with its complexity and range,” he said, adding that “Greek banks have challenges and great opportunities ahead of them. They are no longer classified as cheap bank shares. “
He noted that “for a decade a whole generation has not received bank credit”, therefore, “here the banks must prove that they can take advantage of the opportunity”.
Asked about the Financial Stability Fund, he said that “there was a long negotiation, a complex law is being prepared, which will be submitted in April”, which, as he said, will do 3 basic things:
1) Simplifies the management of the Fund.
2) Reduces the rights of the Fund’s shares.
3) The strategy of impairment of state treasury shares is planned.
“The fund will hire a disinvestment consultant,” he added.
Asked to comment on how the Russian invasion of Ukraine affected him, he said: “We are facing a global shock due to the Russian invasion of Ukraine. Commodity prices are rising, inflation is rising and growth is lower than it would be. “For an economy with high government debt and many years of deflation, a little inflation will help boost wages and stimulate demand.”
“Some increase in interest rates by the ECB is in some ways legitimate,” he said, predicting that “the summit will be difficult”, as “there is no agreement on many levels”.
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