The NPL ratio for the banking system as a whole rose to 22.5% by end-September 2012, from 16% at endDecember 2011. Despite the adverse conditions, the risk of instability was averted The uncertainties that prevailed during the prolonged election period led to successive surges in cash outflows from banks, requiring the latter to be supplied with an exceptionally large amount of banknotes to banks.
The banks’ needs for banknotes were fully and efficiently met by the Bank of Greece. Even in the direst of circumstances, there was not the slightest doubt as to the banks’ ability to repay customer deposits. Otherwise, there would have been a collapse in confidence, with devastating consequences for financial stability and Greece’s membership of the euro area.