It is expected to continue its progress over the coming years, using European resources, improved public debt picture and ongoing reforms, according to what the Bank of Greece (TTE) governor said, at the Risk management & Compliance Conference. As Mr. Stournaras pointed out, an upgrade of Greece’s credit rating to the investment category in 2023 shields positive expectations as it reflects the confidence of the international investment community in the potential of the Greek economy and allows the expansion of the investment base and the reduction of the costs of financing the public and private sectors. The progress of the Greek banking sector is inextricably linked to the wider macroeconomic environment. Greek banks are more resilient than the past to deal with any disruptions and have achieved a significant improvement in fundamental sizes and supervisory indicators. According to the central banker, the quality of the supervisory own funds of the Greek banks remains low, as in June 2024 the definitive and cleared deferred tax claims (Deferred Tax Credits – DTCs) amounted to EUR 12.5 billion, representing 50.5% of the Common Equity Tier 1 capital, from 53.5% in December 2023. In order to resolve this problem faster, solutions are already under way, he noted. As the Greek banking sector has largely returned to normality, it is imperative that banks effectively perform their intermediary role. In this way they will contribute decisively to the consolidation of the development prospects of the Greek economy through the financing of the necessary investments in material capital and new technologies. Increasing competition in the domestic financial system by strengthening the less important banks can contribute to this, improving the financing of the real economy, in particular small and medium-sized enterprises that are the backbone of Greek production and employment. But challenges The challenges for Greek banks are not missing, noted G. Stournaras. These are linked to the need to further improve the quality of their portfolio in an environment of high interest rates and risks arising mainly from the international environment. Moreover, they concern the need to maintain the existing profitability and aid – quantitative and qualitative – of their capital base. At the same time, banks are called, like all productive sectors, to respond to the ever-increasing geopolitical risks, and adapt their work taking into account rapid technological development and climate change. Furthermore, the increasing use of digital instruments in banking transactions exposes banks to an increased risk of information systems and cybersecurity and hence a high operational risk. The current relatively favourable macroeconomic environment creates appropriate conditions to address these challenges. These challenges highlight the importance of internal control, risk management and regulatory compliance in ensuring the solvency of credit institutions and – as you know – they are every year high on the supervisory agenda, supplemented by Mr Stournaras.
Stournaras: Solutions come for deferred tax claims on bank funds
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