Market liquidity

The European Central Bank (ECB) has announced it wants to monitor the liquidity of banks in the eurozone more frequently to reduce the future risk of a financial crisis.

Markets are expecting Greece to regain investment grade soon after Sunday's general election, provided that a strong government comes out of the process. When Greek bonds emerge from the "junk status" they have been at for more than 12 years, they will not be the only ones to benefit.

Cheaper access to the markets for raising liquidity and financing the economy will be the first benefits to be felt by local banks from the recovery of investment grade by the Greek state. This is expected to occur in the first half of 2024 or perhaps earlier depending on the outcome of the elections and political developments.

The housing market has recently evolved into one of the most profitable investments, with a return of up to 126% during the last five years (2017-2022).

Those brave enough to acquire an apartment in Attica during 2017 - i.e. when the real estate market began its recovery - are today the big winners, as they have seen the value of their investment more than double.

Businesses and households are measuring the effects of the rise in interest rates, but also the increased uncertainty created by the financial turmoil and the domestic political climate. This is holding back demand for loans, despite the high liquidity that exists in the economy through banks.

The collapse of Silicon Valley Bank and the serious problems facing Credit Suisse will not have wider consequences for the European banking system, according to Greek bankers.

The Greek banking system is clearly in a much better position now to absorb any turbulence from international markets than it was four years ago, Finance Minister Christos Staikouras said on Thursday, commenting on global banking system tensions caused by the collapse of Silicon Valley Bank and the crisis at Credit Suisse.

"The US banking system remains stable and Americans can feel confident that their deposits will be available when they are needed, thanks to the 'decisive and strong' action taken after Silicon Valley Bank's (SVB) failure to deal with the outflow of deposits at its end last week," Treasury Secretary Janet Yellen told the Senate Finance Committee, Reuters reported.

Credit Suisse announced yesterday that it would borrow almost $54 billion from the Swiss central bank to reinforce the group after a plunge in its share prices.

The disclosure came just hours after the Swiss National Bank said capital and liquidity levels at the lender were adequate for a "systemically important bank," even as it pledged to make liquidity available if needed.

Bank shares around the world collapsed despite assurances from US President Joe Biden that the US financial system is safe, the BBC reported.

The decline in the stock's value comes after Biden vowed to do whatever it takes to protect the banking sector following the collapse of Silicon Valley Bank and Signature Bank.