Risks to financial stability declined in the second half of 2023, although challenges still lie ahead, including the risk of a sharp repricing of assets in international money and capital markets and geopolitical risks, particularly following the further escalation of the
In 2023, Greek banks improved their fundamentals, enhancing their core profitability, capital adequacy, liquidity and asset quality.
Therefore, Greek banks are in a better position than in the past to withstand potential shocks, thereby bolstering the resilience of the Greek economy.
Improvements have also been observed in the other sectors and infrastructures of the financial system.
The Executive Summary of the Financial Stability Review was posted today on the
The Review assesses financial stability developments in
The
a) Special Feature I provides an overview of national frameworks on a positive neutral countercyclical capital buffer, which is set at a positive level early in the business and financial cycle, when cyclical systemic risks are neither elevated nor subdued, i.e. in a standard risk environment.
b) Special Feature II discusses the use of new technologies for the settlement of financial transactions.
The overall improvement in the fundamentals of the Greek banking sector is undeniable. However, persistently high inflation, higher key
In 2023, Greek banking groups posted profits, after tax and discontinued operations, amounting to
The capital adequacy of Greek banking groups strengthened considerably, although the quality of their prudential own funds remains low. The improvement in the capital adequacy of banking groups was mainly achieved through internal capital generation on the back of core profitability, as well as through the issuance of capital instruments. In particular, the Common Equity Tier 1 (CET1) ratio on a consolidated basis rose to 15.5% in
At the same time, the liquidity of Greek banks improved, due to an increase in deposits, bringing supervisory liquidity ratios to very satisfactory levels. Moreover, in 2023 Greek banks' stock of NPLs as a share of total loans declined further (
Looking forward, the biggest challenge is associated with the international environment. A further rise in geopolitical risks, with a potential spread of armed conflicts and increasing trade tensions between the US and
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