FILE PHOTO: Yannis Stournaras, the central bank’s governor. ANA – MPA/ YANNIS KOLLESSIDES
Bank of Greece governor Yannis Stournaras on Friday issued a warning to banks saying that favorable conditions which contributed in the increase of their profitability will not be continued in the future.
He noted that interest rate increases by the European Central Bank have so far positively affected commercial banks’ profitability through an increase in the net interest margin, but this trend was not expected to continue because of a gradual rise in deposit interest rates, higher borrowing cost in money markets and lower demand for loans.
Stournaras added the same reasons of concern also applied to enterprises in the non-financial sector, money market funds, hedge funds, private equity funds, asset market companies, insurance companies, pension funds, etc.
Commenting on fiscal developments, the central banker said it was imperative they remain on a restrictive fiscal policy and noted that new fiscal rules should be implemented from early 2024.
Source: ANA – MPA
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