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Bank consolidation carries the threat of financial oligarchy

12 October 2012 / 22:10:10  GRReporter
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On the other hand, we cannot ignore the obvious difficulties, which the banking sector is strongly experiencing today. Lack of liquidity is forcing banks to do what they can to reduce their operational costs. A merger would reduce management costs by hundreds of thousands or even millions of euro. The merger of activities and the consolidation of operations is a logical consequence of the current situation in the country.

In your opinion, what is the formula for establishing a stable financial system at this time?

The best option is for the number of banks to foster competitiveness. We should be able to maintain a balance, in which there will be enough banks in the financial market so as to be stable, but to be able to maintain different levels of interest rates in accordance with the differences in the policies they pursue.

Greece is once again in the eye of the cyclone in Brussels. It is awaiting a financial aid that depends on the implementation of delayed measures. Do you think that the Greek programme is applicable?

I think that it is not applicable in this form. There will also be an extension of the implementation of the fiscal consolidation programme and a new haircut of the debt.

What is the basis for your conclusions?

The account doesn’t balance otherwise. In this situation, Greece will be unable to pay its obligations.

What changes has Greece fatally delayed in your opinion?

Privatization. It was supposed to be triggered. There is no other option but to start it from this point. These processes will give a boost to the economy. The majority of funds from privatizations will go to repay part of the debt, but another part can be redirected to other activities. Even if this does not happen, the fact that companies that are making a loss or are uneffective, or companies that are just not working at full capacity will have a new, more ambitious owner than the Greek state is a positive development.

 

Tags: EconomyMarketsDimitris MardasForeign debtBanksCrisis
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