Financial Crime World

Regulatory Challenges in Greece: Overview and Future Directions

The Greek financial sector is currently facing several regulatory challenges that require attention. These challenges span across multiple areas, including non-performing loans (NPLs), the impact of the COVID-19 pandemic, and consumer protection.

Current Regulatory Challenges in Greece

  • High NPL Ratio: The NPL ratio of Greek banks remains at a high level of 35.8% as of September 2020.
  • COVID-19 Pandemic Impact: The pandemic has significantly disrupted financial stability and weighed heavily on economic activity, leading to substantial losses for Greek banks.
  • Consumer Protection: Banks are subject to consumer protection rules, including provisions related to general terms of business, pre-contractual and contractual information, and advertising practices.

The regulatory landscape is expected to undergo significant changes in the coming months or years. These changes will focus on:

  • Enhancing Capital Market Union: This aims to improve access to capital markets for small and medium-sized enterprises (SMEs) and enhance financial integration within the European Union.
  • Transposing CRD V and BRRD II into Greek Law: This involves implementing new banking regulations aimed at strengthening bank resilience and improving crisis management.
  • Prioritizing Banks’ Credit Risk Management, Capital Strength, Business Model Sustainability, and Sound Governance Practices: This is crucial for ensuring the long-term sustainability of banks in Greece.
  • Aligning with the ESG Framework and Addressing Prudential Risks: This includes managing risks related to money laundering, cyber threats, and digitalization.

These policy changes are designed to enhance financial stability and promote sustainable banking practices in Greece.