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Two state owned, state controlled banks, namely the National Bank of Greece and the Commercial Bank of Greece, dominate the Greek banking system. A third state controlled bank, the Ionian Bank, was recently sold to the largest private bank operating in Greece, namely Alpha Credit Bank. A second private bank (Eurobank), forming part of the Latsis Group, is gradually becoming a major player in the Greek banking system. A large number of foreign banks (both EU and non-EU) were, up to recently, present in Greece along with numerous smaller Greek banks, which have been established over the past five years. However, as accessibility to cross- border banking services improves, the number of foreign banks operating in Greece is gradually diminishing.
Greece has fully liberalized its financial sector to fall in line with the rest of the European Union. The banking sector was deregulated in the mid-1990s and the Central Bank of Greece was granted full independence from the government, although the government still retains an interest in the bank. There are no restrictions on moving funds in or out of the country or on foreign exchange.
Law 2076/92 was created to conform with the EU Second Banking Directive, which states that any bank licensed in one EU country may open a branch in any other EU country without requiring any additional license.
The primary source of credit in Greece is the banking sector. Banks operate in an environment, which is becoming increasingly competitive. The Central Bank of Greece exercises overall control and supervision over the banking sector by requiring commercial banks to file periodic returns and to maintain certain obligatory deposits.
It is not unusual for medium and large size companies to work with more than one bank.
As a rule, leasing companies are subsidiaries of banks, as are the few factoring companies, which have been established, in the relatively recent past.
Venture capital companies are gradually being established in Greece. The Athens Stock Exchange has experienced significant growth over the past five years.
Radical developments are expected in the Greek Banking Systemwithin the next two years, since the take over and merger circle, which started in the middle 90's, will have been completed. The banking sector is entering now in its second merger stage, necessary for the creation of big powerful groups, which will be able to survive in this ultra - competitive united market of the European Union.
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