The Road to Recovery: Are Greek Banks Able to Finance Greece’s Economic Recovery?

Abstract

The big question facing Greece these days is whether the conditions are in place for the economy to return to a path of strong and sustainable economic growth. A year after the country signed its third loan and reform program with European partners, many wonder whether the steady and timely implementation of the deal agreement is enough by itself to ensure that, or additional initiatives are necessary. The answer depends on how Greece and the domestic banks navigate four key challenges ahead. Namely: restoring normal liquidity conditions; successfully managing a large stock of bad and problem loans; diminishing official sector interference in banking operations; and tackling the sweeping, transformational changes now gripping the European banking sector as a whole.