Public Lecture ‘The Road to Recovery: can Greek banks revive the real econo...
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The Hellenic Observatory at LSE and the Hellenic Bankers Association in the UK are delighted to welcome Mr Nikolaos Karamouzis, Chairman of the Board of Directors, Eurobank Ergasias SA and Emeritus Professor at the University of Piraeus, Greece for a Public Lecture on the topic 'The Road to Recovery: can Greek banks revive the real economy?’
The lecture will be Chaired by Dimitri Vayanos, Professor of Finance, Head of the Department of Finance and Director of the Paul Woolley Centre for the Study of Capital Market Dysfunctionality at LSE.
A summary of the contents of Mr Karamouzis' speech:
The Greek economy, having suffered a multi-year, double-dip recession, record unemployment, anaemic investment and high public debt, is in urgent need to return to a path of strong and sustainable economic growth.
This is the main priority of economic policy as it is both the targeted cure for the economic malaise, as well as a key prerequisite for the success of its third Adjustment Programme. While the steady and timely implementation of the reforms and fiscal consolidation measures contained in the agreement is a necessary condition for the resumption of growth, several additional pre-conditions have to be met. Perhaps the most important of all concerns is the ability of Greek banks to provide the credit needed to support economic growth.
This, in turn, depends on the degree of success in dealing with four key challenges ahead, namely, restoring normal liquidity conditions, successfully managing a large stock of bad and problematic loans, reducing official sector interference in banking operations, and tackling the sweeping, transformational changes now gripping the European banking sector as a whole.
Greek banks have more than adequate capital to simultaneously fund economic growth and effectively reduce the large stock of bad loans. However, improving the liquidity situation, hinges upon the Greek government demonstrating a convincing commitment to implementing the program and key economic reforms, as well as pro-market and pro-growth economic policies. Restoring market confidence in the Greek economy and proper business climate are a sine qua non for a Greek economic recovery. To this end, a number of front-loaded, bold policy initiatives are proposed. Those could arguably lead to a substantial reduction of risk premia and interest rates, resumption of positive credit expansion, significant repatriation of deposits and widening possibilities for Greek economic agents to raise debt and equity internationally on attractive terms.
For more information visit http://www.lse.ac.uk/europeanInstitute/research/hellenicObservatory/home.aspx