Greece’s domestic banking sector remained in “standby mode” in the wake of the result of last Thursday’s referendum in Britain, where a majority of voters opted for withdrawal from the EU.
By A. Doga
Greece’s domestic banking sector remained in “standby mode” in the wake of the result of last Thursday’s referendum in Britain, where a majority of voters opted for withdrawal from the EU.
The result could not have come at a worst time for the local banking system, as the upcoming period was expected to cautiously witness a normalization of the sector and even a modest growth.
A loosening of capital controls, imposed since late June 2015, along with expectations for a more bullish run on the Athens Stock Exchange were on the forefront. On the wider economic front, the successful conclusion of a first review of the Greek program (third bailout), despite six months of delays, a restored waiver by the ECB for Greeks banks' use of state bonds as collateral and planning to finally manage and allow the resale of non-performing loans in the country were all viewed as positive -- and upcoming -- developments.
Nevertheless, the “specter” of Brexit has dramatically chilled economic confidence on both the national and European level.
Greek banking executives told “N” that assessments over the short-term period are now futile, with only uncertainty expected to return as a “constant” for the recession-battered Greek economy.
Indicative of the attention focused on the British referendum and its results is the fact that Moody’s did not issue a latest update on Greece’s credit rating last Friday.