2024-03-03 11:08:44
Executives became bosses! The competition doesn’t just stop at increasing turnover (do you want a loan? Take it!) but also extends to their personal lives. Mansions in the northern suburbs, luxury yachts, private jets.
From 2003 until 2008, life goes smoothly in the Greek banking sector. The liberalization of the market and the possibility of introducing modern products, mainly retail banking, allows for a rapid increase in business. The Greek banking industry is showing an increase in volumes that even global or pan-European banks are jealous of (by analogy, of course). Bankers are only concerned with increasing business in loans and money. No one deals with the credit policy and the analysis of the assumed risk.
Bank branches move at a frenzy of customers for a set of products, which increase every week in order to fill the customer’s basket. Of each customer. Do you want a card? Why not get two for the price of one? Do you want a mortgage? No problem. We give you 100% of the purchase price and another 15% for repairs. But the apartment is new. No problem, take it to equip it. But how much will it cost per month? Do not worry. We will take out the loan so that you only pay the interest. And the capital? We see. We will also give you a good price.
Business is going well and that is obvious. The big houses in Athens and the northern suburbs, the expensive vacations and luxury yachts of the Greek bankers give the impression that the competition does not stop in the market, but also continues in their personal lives.
Executives become bosses. All sense of measure is lost. Surrounded by up-and-comers running their daily lives, they fly in private chartered jets to develop new jobs in the “New Europe”. Moreover, the “Greek model” is so successful that it must be expanded to larger and larger markets.
They don’t stop there though. There are many cases where the trading volume of these people in the Stock Exchange gives the image of an institutional investor. Tens of millions are invested and liquidated not only in the global stock markets but also in the very stock of the bank in which they are executives.
But the image was magical! The growth model was fundamentally shaky because it did not sufficiently take credit risk into account. Also, the financing of these credits was basically done by the banks borrowing from the interbank market. The model did not provide for raising deposit funds because their profitability was much lower than loans. Because one followed the other in conquering a larger market share in the Greek banking Far West.
The global crisis came and the Lehman bubble burst like a water balloon. They all got wet. The spigots of foreign loans to Greek banks have been turned off. So where the rates of work development were the first word, the word “quality” started to make its appearance in the internal meetings. Quality in all its spectrum: client, portfolio, investment. New terminologies took over, such as non-performing loans and their growth rate.
The risk analysts had their due in internal meetings to inform the higher ups but also to be held accountable for approving allocations following rules that their superiors themselves had indicated!
Suddenly “development” stopped sounding like a term and piling up debt and credit was at the center of the agenda. From absolute liquidity that bordered on excess, to turning off the tap and repeated calls to customers to pay, if only something, to keep the loan active, to avoid starting the legal process and payment orders, to avoid reach auctions, but also so that the bank does not write losses.
The country is at a critical crossroads. Times have changed and we hope so will the people who lost their temper and led us to an economy modeled on consumption, instead of productive investment and modernization.
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