Bank of Greece: Absorbing Financial Shock

Bank of Greece’s governor George Provopoulos predicted on Thursday that there will not be a second package of financial support to Greek banks. Speaking in Parliament, during a testimony over the central bank’s monetary policy report, Provopoulos said: “According to what we know at this moment, there is no need for a second package.”

Commenting on Greek banks’ investments in Southeastern Europe, the central banker said that the institutions have other ways of financing their investments abroad. He said that banks could use savings from one country and transfer them to another country. He added that the European Central Bank and the Eurosystem was filling in for a liquidity gap created by a freezing of international capital markets.

Provopoulos said that the country simply cannot sacrifice what it has invested over the last few years in Southeast Europe, because of the current difficult situation, adding that Greek investments in the region were more than just a financial presence. “Greek banks have an adequate, strong capital position, capable of absorbing shocks,” he said.

(Posting date 14 March 2009)

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