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Country Commercial Guides
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CHAPTER VIII. TRADE AND PROJECT FINANCING
The Banking System
The banking and financial sectors have been liberalized considerably since 1987, primarily because of directives from the EU, and are now basically free of state interference.
The Greek banking system consists of a Central Bank (The Bank of Greece), 41 commercial banks, 3 investment banks, 1 specialized bank (Agricultural Bank of Greece), 7 local cooperative banks, the Postal Savings Bank and the Consignments and Loans Bank. Twenty-two of the commercial banks are foreign, including four American banks. Of the Greek commercial banks, the largest is the National Bank of Greece, which accounts for about one-third of the country's banking business.
State-controlled banks and specialized financial institutions together control about 57 percent of deposits and 53 percent of loans. Foreign-owned banks (including other EU-based banks) control about 10 percent of deposits and 14 percent of loans. Greek-owned private banks retain control of the remaining 33 percent of deposits and 33 percent of loans.
The Bank of Greece, the Central Bank, has the exclusive right to issue paper currency. It also acts as the depository for government accounts, and for the mandatory reserve requirements of commercial banks and legal entities. The bank acts as a financial and fiduciary agent for the government's monetary policy decisions. It also supervises the commercial banks and other financial institutions.
The establishment of a foreign bank in Greece must be approved by the Bank of Greece. EU Single Market legislation and banking directives have contributed to the liberalization and deregulation of the Greek banking industry.
Foreign Exchange Controls
Foreign exchange controls have been progressively relaxed since 1985. Medium and long-term capital movements have been fully liberalized. Most restrictions on short-term capital movements were lifted in 1994. Remaining restrictions on short-term capital movements were lifted on August 1, 1997, although some controls still exist to facilitate enforcement of money laundering laws and tax collection. Greece's foreign exchange market is now in line with EU rules on the free movement of capital.
General Financing Availability
Greek capital markets allocate credit on market terms, and while a sound business may have no problem with financing availability, interest rates range from 11.75 (prime rate) to 19 percent.
Banks constitute the main source of financing. The bond market is still embryonic but has been developing steadily. The Athens Stock Exchange is increasingly used as a source of capital financing. The Greek Government has initiated legislation to encourage a venture capital market. Capital-market growth has been hampered by the predominance of small, family-owned firms, and the tendency either to invest in real estate and government bonds or to hold savings in bank deposits.
Checks are predominately used for commercial transactions. Credit cards are widely available and used for retail transactions. Most of the liabilities of the commercial banks are in the form of savings deposits. The majority of bank loans are short-and medium-term; only one-fifth of bank loans are long-term.
Export Financing and Insurance
No special terms govern export financing. Methods of payment are subject to individual agreements. Credit institutions may freely determine interest rates. The Bank of Greece influences interest rates by using the discount rate and other interest rates in its transactions with commercial banks as tools to control the money supply.
EXIMBANK's exposure in Greece is extremely limited. OPIC has not been active in Greece but it signed in 1994 an agreement with its Greek counterpart (Greek Export Credit Insurance Organization) for the creation of a joint fund for risk insurance in the Balkans and Central and Eastern Europe.
Project Financing Availability
Most of the current infrastructure projects in Greece are co-financed by the EU (approximately $20 billion in the 1994-99 period). The European Investment Bank also participates in the financing of many of the large infrastructure projects in Greece.
U.S. Banks in Greece and Greek Banks with Correspondent U.S. Banking Arrangements
Four U.S. banks have branches in Greece: Citibank (full range of banking services), Citibank Shipping (shipping financing), American Express (lending services) and Bank of America (lending services). Chase Manhattan also keeps a representative office in Athens.
Following is a list of Greek commercial banks with correspondent U.S. banking arrangements:
- National Bank of Greece: The Atlantic Bank of New York, Chase Manhattan, Citibank, Chemical Bank
- Ionian Bank: Chase Manhattan, Banker's Trust, American Express, Bank America International, Citibank, Chemical Bank
- Bank of Attica: Bank of New York
- Bank of Piraeus: Bank of New York
- Commercial Bank: Chemical Bank, Bank of America International, Chase Manhattan, Citibank, Banker's Trust
- Credit Bank: Bank of New York, Banker's Trust, Bank of America, Chase Manhattan, Chemical Bank, Citibank, Morgan Guarantee Trust Bank
- Ergo Bank: Banker's Trust, Bank of New York, Citibank, American Express
- Egnatia Bank (Thessaloniki): Bank of New York
- Eurobank: Banker's Trust
- European Popular Bank: Marine Midland Bank
- General Hellenic Bank: Bank of New York
- Macedonia-Thrace Bank: Atlantic Bank of New York, American Express, Bank of New York, Chase Manhattan, Continental Bank, Citibank, Fidelity Bank
- Xiosbank: Citibank
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[end of document] Note* International Copyright, United States Government, 1998 (or other year of first publication). All rights under foreign copyright laws are reserved. All portions of this publication are protected against any type or form of reproduction, communications to the public and the preparation of adaptations, arrangement and alterations outside the United States. U. S. copyright is not asserted under the U.S. Copyright Law, Title 17, United States Code.
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