As Greek banks are the outlier on the non-performing loans’ European map, efforts must be stepped up beyond the existing performance targets set by the Bank of Greece. Moreover, new stress tests as part of a pan-European exercise next spring are widely expected not to hold any negative surprises for the capital position of Greece’s systemic banks.
A gradual return to normal bank funding conditions, less dependence from the Eurosystem and a steady increase in deposits will ultimately encourage new bank lending to healthy businesses, restoring Greek banks’ profitability, thus allowing Greek banks to face the modern-day challenges, together with their European counterparts, such as green financing, smart technologies, including fin-tech and cybersecurity, etc.