Bank of Greece tightens oversight of banking groups
Published
Greece plans to tighten oversight of banking groups. According to the plan, the parent companies of banks will need to obtain the approval of the Bank of Greece before reducing their share capital or proceeding with share buybacks. In this way, the central bank will have greater supervision over the financial decisions of the groups.
The aim of the measure is to protect the stability of the banking system. When a bank reduces its capital or distributes money to shareholders, its ability to face possible difficulties may change. For this reason, supervisory authorities want to review these decisions before they are implemented.
The new rules mainly concern groups that have more than one subsidiary, as well as the relationship between the parent company and the individual banks. The central bank will examine whether the decisions of the parent company are compatible with the financial health of each subsidiary.
For citizens, the change does not mean an immediate change in banks' services. Deposits and everyday transactions remain as they are. However, the measure shows that the authorities are paying greater attention to the management of banking groups in Greece. Details of the implementation are expected in the coming months.
Sources: Dnews
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