I have criticised the Greek central bank governor before for his comments but today’s quote in Athens News was the best yet
Yiorgos Provopoulos, Bank of Greece’s governor has been quoted as saying Commenting on the banking system, Provopoulos said “it is not the source of the crisis, but instead a victim of a fiscal crisis in the country”.
How exactly the banks are victims he doesn’t say.
For a completely opposing view Radical Left Coalition (Syriza) parliamentary group president Alexis Tsipras … Referring to last week’s decisions taken by a Eurozone summit on Greece’s debt, Tsipras said they were “a breath for the country’s borrowers, the international profiteers, the government and the overdebted private banks and not for the people.” – While I don’t agree with Tsipras’s solutions his understanding of the facts is undisputable.
To clarify why banks in general and Greek banks are in this mire it is because
1. they have made loans without doing background checks on the applicants,
2. they have bought assets from their so called competitors without checking the integrity of the loans,
3. they have made gambles on the revenues from these (toxic) assets which far outstripped the assets they have on their books and these gambles have gone bad
How this is the fault of anyone but the banks is beyond me. I suppose governments could be held accountable because they have effectively told the banks that “if you make mistakes the people will bail you out, if things go well, you get to keep all the profits”
So the reason Greece and basically the western world is in this mess is because of government intervention and bank incompetence/collusion.
Going back to Provopoulos’s statement, I wonder who he does publicly blame for the crisis, maybe it is no one. It was “a combionation of factors that came together at the same time which made the perfect storm” or something along those lines, or perhaps it is the people who took the loans in the first place. Unfortunately the article doesn’t say.
It is the greek government my friend which piut pressure on the greek banks to buy greek bonds
threatening them othrwise will draw all the deposits. The greek banks did not invest in any toxic poducts
Hi thanks for the comment.
You say the Greek government could withdraw deposits from the banks. What deposits? The Greek government is bankrupt, it has no money to withdraw.
As for the Greek banks not investing in any toxic assets. Personally I think the Greek banks are as much into derivatives as everybody else. Why else would they need the Greek tax payers to bail them out? In my opinion they were obviously exposed to the toxic assets in the USA.
Also, that fact that Alpha Bank and Eurobank are having to merge for “stability” shows how weak they are. My opinion
Hi thanks for the comment.
You say the Greek government could withdraw deposits from the banks. What deposits? The Greek government is bankrupt, it has no money to withdraw.
As for the Greek banks not investing in any toxic assets. Personally I think the Greek banks are as much into derivatives as everybody else. Why else would they need the Greek tax payers to bail them out? In my opinion they were obviously exposed to the toxic assets in the USA.
Also, that fact that Alpha Bank and Eurobank are having to merge for “stability” shows how weak they are. My opinion