• Live
    • Audio Only
  • google plus
  • facebook
  • twitter
News > Greece

Greek Experts Call for Vigilance After US Banking Turmoil

  • A branch of Credit Suisse Bank.

    A branch of Credit Suisse Bank. | Photo: Twitter/ @Spysun04

Published 29 March 2023

"The banking sector is very much interconnected with the real economy, and we should follow developments very carefully," said Professor Panagiotis Petrakis.

In the wake of the banking turmoil triggered by the collapse of three U.S. banks, and the crisis at Swiss banking giant Credit Suisse this spring, Greek experts have called for vigilance and rapid action.


Dilma Rousseff Chairs the BRICS New Development Bank

Despite there are no imminent threats to the European banking system and economy and a repeat of the 2008 financial crisis is unlikely, vigilance is required after such banking turmoil.

"I find the U.S. banking crisis right now really worrying. We know that rising inflation is often met by rising interest rates, and this is also a risk to the U.S. banking system," said Valia Aranitou, an associate professor of economics at Athens and Kapodistrian University.

"At the moment, the Greek banking system is indeed stable. However, we do not know in the case of a crisis in the American banking system what will be the impact on the Greek economy and the Greek banking system and on the European economy as well," Aranitou added.

"As long as we are in a period of rising interest rates... portfolios that have specific problematic characteristics, such as investments in long term bonds, will suffer from a decline in value, so small and moderate crises in the banking system will emerge," said Panagiotis Petrakis, emeritus professor at the National and Kapodistrian University of Athens.

"The banking sector is very much interconnected with the real economy, and we should follow developments very carefully," he added.

The European Central Bank (ECB) said that the Governing Council was monitoring current market tensions closely, and stood ready to respond if necessary to preserve price stability and financial stability in the euro area.

Greek central bank Governor Yannis Stournaras said recently that the banking turmoil in the U.S. and Switzerland had not created chain reactions and that today's global banking system had improved levels of liquidity and capital adequacy.

However, he said that more steps should be taken to improve the security of the European banking system, such as finalizing the European Union deposit guarantee scheme.

Post with no comments.