Economic Analysis, International

Restarting The Greek Financial Sector: A Comprehensive Set of Proposals

“Restarting The Greek Financial Sector: A Comprehensive Set of Proposals”

Gikas Α. Hardouvelis
Professor, Department of Banking and Financial Management, University of Piraeus and Chair of the Board, National Bank of Greece
Nikos S. Magginas, PhD
Chief Economist, National Bank of Greece


November 2022 (Transaltion from the original version in Greek published by “diaNEOsis” Research & Policy Institute in May 2022)

You can download the study or read the full text at 



The current study presents proposals for upgrading the financial system and strengthening its capacity to finance the private sector. The proposals have a short- and medium-term implementation horizon. They are organized in three categories. The first relates to the private banking sector; the second concerns the stock market; and the third category focuses on issues of market supervision and a suitably targeted role for the State.

The section on strengthening bank lending and banking activity presents measures that foster the gathering of full and accurate information from borrowers, to enable the assessment and correct pricing of credit risk by lenders. We propose, among other things: the immediate launch of an independent national credit rating authority (“Independent Credit Bureau”), which would be assigned with a wide coverage of the business sector; the operation of a digital real estate register; the enhancement of published accounting information (especially for SMEs); the use of external auditors in non-listed companies; the effective implementation of the new bankruptcy process; the immediate appointment of a committee to facilitate potential investors and thereby utilize and leverage effectively the funds of the Recovery and Resilience Facility (RRF); the support for the judicial system so that it can respond swiftly and effectively to the growing and increasingly complex legal environment, while also fostering a better level of financial education for judges and the general population already trained in Law. We also propose, at national or supranational level, to prepare early for the possibility of setting up an asset management company in order to shield the banking system from unforeseen shocks that could take on systemic proportions in the future.

The section on upgrading the Greek capital market emphasizes the importance of measures to improve the corporate governance of domestic companies and to provide incentives for business growth and mergers through structural measures and tax reforms. This section also includes proposals aiming at: expanding the range of companies that are obliged to follow the rules of good corporate governance; promoting business growth strategies and M&A activity; broadening the economy’s savings base and thereby enabling investment in the domestic capital market through the operation of a funded pillar in the social security system; encouraging technological deepening and international link-up of the Greek stock market, and upgrading of its human capital. Considering the course toward a European Capital Markets Union, we propose that ambitious reforms should be implemented to ensure that the stock market is ready to participate in the future Capital Union and reap the maximum possible benefit.

In the section dealing with effective supervision and more specialized government participation in the financial system, we present specific options for the potential future form of supervision by strengthening the pillar concerning the capital market, while considering specific characteristics of the Greek economy, as well as international trends. We also suggest that synergies between the Hellenic Development Bank and the Recovery and Resilience Facility should be fully exploited on a sustainable basis in the future.



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