June 16, 2024

News Cymru

Two sides to every headline

“Banks Are Victims Of The Crisis” – Greek Central Bank Governor

I have criticised the Greek central bank governor before for his comments but today’s quote in Athens News was the best yet

"Banks are the victims" - Greek central bank governor

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 TsiprasReferring 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.

Get the latest updates in your inbox