First-step analysis: banking regulation in Greece

Regulatory framework

Key policies

What are the principal governmental and regulatory policies that govern the banking sector?

Banks play a predominant and interventional role in the Greek economy, and their decisive input in payment systems and in money and capital markets is evidence of a growing and smoothly operating economy. The development of the economy is dependent on the stability of the banking and financial system. The objective of banking supervision is to ensure this fundamental principle and goal.

The relevant governmental and regulatory policies covering banking aim to ensure:

  • transparency of transactions;
  • consumer and investor protection; and
  • the effective functioning of banks through the establishment of the appropriate conditions for their operation and their relationship with market stakeholders.

Banking supervision is regulated by the Single Supervisory Mechanism (SSM), established under Council Regulation (EU) No. 1024/2013 (Single Supervisory Mechanism), which conferred powers on the European Central Bank (ECB) for the prudential supervision of banks. Regulation (EU) No. 468/2014 (SSM Operational Framework), establishes the framework for cooperation between:

  • the ECB;
  • national competent authorities; and
  • national designated authorities within the SSM.

The Bank of Greece (BoG) supervises banks, as well as other categories of enterprises and organisations in the financial sector.

Primary and secondary legislation

Summarise the primary statutes and regulations that govern the banking industry.

The core legal and regulatory framework governing the operation of banks in Greece includes:

  • Regulation (EU) No. 1024/2013 (SSM);
  • Regulation (EU) No. 468/2014 (SSM Operational Framework);
  • Regulation (EU) No. 575/2013 (Capital Requirements Regulation);
  • Banking Law No. 4261/2014, regarding access to the activities of credit institutions and prudential supervision of credit institutions and investment firms, incorporating Directive 2013/36/EU (Capital Requirements Directive) (CRD);
  • Regulation (EU) No. 806/2014 (Single Resolution Mechanism) (SRM);
  • the Bank Recovery and Resolution Directive 2014/59/EU, transposed into Law No. 4335/2015;
  • the relevant acts and decisions issued by the BoG (including Act No. 2577/2006 on corporate governance and Act No. 2651/2012 on regulatory reporting); and
  • Sociétés Anonymes Law No. 4548/2018, which is the predominant legal form of banks established and operating in Greece.

The following EU and Greek legislation supplement the core legal and regulatory framework:

  • Directive 2014/49/EU (Deposit Guarantee), transposed by Law No. 4370/2016;
  • Directive 2015/849/EC (Fourth Anti-money Laundering Directive), transposed by the Anti-money Laundering Law No. 4557/2018;
  • Directive 2015/2366/EU (Payment Services Directive 2) (PSD 2), transposed by the Payment Services Directive II Law No. 4537/2018;
  • Directive 2014/65/EU (Markets in Financial Instruments II) (MiFID II), as amended, transposed by the Markets in Financial Instruments II Law No. 4514/2018.

Regulatory authorities

Which regulatory authorities are primarily responsible for overseeing banks?

The ECB undertakes the direct prudential supervision of all systemically important banks in the eurozone. The following Greek banks are subject to direct supervision by the ECB, in cooperation with the BoG:

  • Alpha Bank SA;
  • Eurobank Ergasias SA;
  • National Bank of Greece SA; and
  • Piraeus Bank SA.

Smaller institutions are subject to the prudential supervision of the BoG, which exercises its competencies subject to:

  • the SSM regulation;
  • the SSM Operational Framework; and
  • the SRM.

In addition:

  • the BoG is the competent authority for the supervision of compliance with the Anti-money Laundering Law;
  • the BoG in cooperation with the Hellenic Capital Markets Commission (HCMC), undertakes the supervision of Greek banks through MiFID II; and
  • the HCMC is the competent authority for the supervision of Greek banks regarding market abuse provisions.

Government deposit insurance

Describe the extent to which deposits are insured by the government. Describe the extent to which the government has taken an ownership interest in the banking sector and intends to maintain, increase or decrease that interest.

The Hellenic Deposit and Investment Guarantee Fund (HDIGF), governed by Law No. 4370/2016, is the operator of:

  • the deposit guarantee scheme (DCS);
  • the investment compensation schemes (ICS); and
  • the Resolution Fund for banks.

The purpose of the HDIGF is:

  • to pay compensation to depositors if deposits become unavailable;
  • to pay compensation to investor clients of credit institutions if they cannot fulfil their obligations; and
  • to finance resolution measures for credit institutions.

Coverage by HDIGF, DCS and ICS is compulsory for:

  • all Greek banks;
  • foreign branches of Greek banks; and
  • local branches of banks incorporated outside the European Union.

The maximum level of coverage is set at:

  • €100,000 per depositor, per bank (regardless of the number of accounts), unless there is a case of additional coverage; and
  • €30,000 per investor, per bank, for the total amount of claims from investment services (regardless of the number of accounts).

At present, through the Hellenic Financial Stability Fund, the Greek state participates in the share capital of the four Greek systemic banks. Its share capital includes:

  • 40.4 per cent in the National Bank of Greece;
  • 26.4 per cent in Piraeus Bank;
  • 11.1 per cent in Alpha Bank; and
  • 2.4 per cent in Eurobank.

The government plans to gradually reduce its participation in the share capital of the Greek systemic banks, taking into account the interests of shareholders and the smooth operation and stability of the markets and the banking system.

Transactions between affiliates

Which legal and regulatory limitations apply to transactions between a bank and its affiliates? What constitutes an ‘affiliate’ for this purpose? Briefly describe the range of permissible and prohibited activities for financial institutions and whether there have been any changes to how those activities are classified.

In the absence of explicit prior approval from the boards of directors or at shareholder general meetings, all transactions between a credit or financial institution and its affiliates, including the granting of guarantees or other security interests to any third parties for the benefit of affiliates, are generally prohibited.

The Sociétés Anonymes Law provides details for the approval process for boards of directors and shareholder general meetings for transactions with affiliates, as well as specific exceptions to the above prohibition. Exceptions include transactions entered into in the ordinary course of a bank’s business and concluded on normal market terms. Any transaction with a value that exceeds 10 per cent of the institution’s assets does not fall under the scope of regular transactions.

For the purposes of the above requirements, an ‘affiliate’ is defined as:

  • a person determined by the International Accounting Standards 24 and 27 for banks with listed shares; or
  • a board member, person who exercises control over the bank, close family member of said persons or legal person controlled by these individuals for banks with non-listed shares.

Further, MiFID II requirements on personal trading transactions also apply.

Banks are required to submit information regarding exposure to affiliated persons to the BoG on a quarterly basis to enable it to exercise its supervisory powers.

Regulatory challenges

What are the principal regulatory challenges facing the banking industry?

During the past decade, the banking system has undergone challenging changes as a result of:

  • deteriorating fiscal conditions;
  • uncertainty regarding Greece’s continued participation in the eurozone;
  • the restructuring of the public debt through the participation of the private sector;
  • an inability to access international markets and the significant outflow of deposits;
  • the deteriorating quality of loan portfolios held by Greek banks; and
  • the downgrading of credit ratings of Greece and, consequently, Greek banks.

In this context, Greek banks have been subject to recapitalisation and the implementation of relevant restructuring plans. Currently, the most immediate challenge faced by banks is to accelerate the reduction of their non-performing exposures (NPEs), while ensuring minimum impact from such activities in capital and disengagement from non-banking activities through the disposal of stakes in companies outside the financial sector.

The Greek banking system has also been affected by the Capital Controls Regime (Legislative Act of 18 July 2015, as amended), imposing, in particular, the prohibition of the cross-border free transfer of monies. Gradually, the most significant restrictions of the Capital Controls Regime had been lifted, and on 1 September 2019, the Capital Controls Regime was fully abolished, pursuant to article 86 of Law No. 4624/2019.

Consumer protection

Are banks subject to consumer protection rules?

The Consumer Protection Law No. 2251/1994, as amended, and the Consumer Code of Conduct (Presidential Decree No. 10/2017) constitute the core legislation for consumer protection, while the BoG Governor’s Act (No. 2501/2002) provides rules on customer disclosure regarding the main terms governing banking transactions in order to ensure transparency.

The Consumer Protection Law protects, among others, the economic interests of consumers in relation to the potential abuse of negotiating power by the suppliers of financial services.

The law:

  • stipulates that contracts, including contracts governing the provision of financial services, must not contain unfair terms; and
  • protects consumers from the terms contained in standard contracts prepared by financial institutions and stipulates that such terms will be void if they result in the excessive imbalance of the rights and obligations of the parties to the detriment of the consumer.

Enhanced consumer protection provisions regarding investment and banking services are also included in Regulation (EU) No. 600/2014 (Markets in Financial Instruments) and the Markets in Financial Instruments II Law.

The General Secretariat of Commerce and Consumer Protection, established in the Ministry of Economy and Development, is the supervisory authority for the implementation of the Consumer Protection Law, and penalties may be imposed as a result of a Ministry of Economy and Development decision. In addition, if there is a breach of an applicable regulatory act, penalties may be imposed by the BoG or the HCMC.

Future changes

In what ways do you anticipate the legal and regulatory policy changing over the next few years?

See question 32.


Extent of oversight

How are banks supervised by their regulatory authorities? How often do these examinations occur and how extensive are they?

Banks are supervised by the BoG, in cooperation with the ECB.

The supervisory objective is to safeguard the stability and smooth operation of the banking system and the financial sector, by ensuring the transparency of procedures and terms for those transactions that are subject to supervision.

In particular, the prudential supervision of credit and financial institutions is exercised by the BoG Banking Supervision Department in cooperation with the Supervised Institutions Inspection Department.

Prudential supervision encompasses:

  • managerial and accounting arrangements;
  • the efficiency of internal control systems;
  • compliance with applicable capital adequacy and liquidity requirements; and
  • limits on large credit exposures and qualifying holdings in non-financial institutions.

Further, the BoG retains responsibility – in cooperation with the competent supervisory authorities of the institutions’ home member states – for the supervision of the liquidity of the local branch of banks incorporated in other member states. The BoG may request, at its own discretion, the acquisition, audit and assessment of periodical information provided by the bank and may carry out on-site inspections.

Banks are required to submit information and data to the BoG periodically, to enable it to exercise its supervisory powers. The BoG may perform examinations either on the basis of such information or following a relevant complaint.


How do the regulatory authorities enforce banking laws and regulations?

The BoG has enforcement powers and can impose penalties for non-compliance with the legal and regulatory requirements, which govern the operation of banks, including:

  • the issue of warnings;
  • the imposition of fines; and
  • in extreme cases, licence withdrawal.

Penalties and other regulatory measures that may be imposed by the BoG include:

  • penalties of up to 10 per cent of the total net turnover (up to €5 million for natural persons); and
  • relevant disclosure to the press.

Natural persons may be removed from the board of directors or have their managerial position and voting rights suspended for breach of:

  • licensing requirements or requirements for the acquisition of special participation in banks; and
  • reporting obligations, corporate governance requirements and false declarations regarding the issuance of an operating licence.

Further, pursuant to the Consumer Protection Law No. 2251/1994, the Ministry of Economy and Development may impose penalties for non-compliance following an opinion by the BoG.

What are the most common enforcement issues and how have they been addressed by the regulators and the banks?

The BoG publishes the penalties imposed on banks according to the provisions of Banking Law No. 4261/2014 or other regulatory acts issued on its website, provided that the deadline to appeal before the Supreme Administrative Court has passed. Relevant publications contain the type and nature of violations and the natural or legal individual on which the penalty was imposed.

The most common penalties imposed by the BoG relate to violations or inefficiencies in the processes of financial institutions relating to anti-money laundering legislation and BoG acts, as well as violations with regard to transparency in the relations between credit institutions and customers.


Government takeovers

In what circumstances may banks be taken over by the government or regulatory authorities? How frequent is this in practice? How are the interests of the various stakeholders treated?

Law No. 3864/2010 established the Hellenic Financial Stability Fund (HFSF) as a private legal entity not pertaining to the public sector. The HFSF, which is equipped with administrative and financial autonomy and governed by Law No. 3864/2010, contributes to the maintenance of stability in the Greek banking system, for the protection of the public interest. The HFSF operates under a comprehensive strategy for the banking sector and the management of non-performing loans, which is agreed between the Ministry of Finance, the BoG and the HFSF.


  • provides capital support to banks, in compliance with EU state aid rules;
  • monitors and assesses how banks – to which capital support is provided by the HSFS – comply with their restructuring plans, while safeguarding their business autonomy and ensures that such banks operate on market terms and that private sector participation in them is enhanced on the basis of transparent procedures and EU legislation on state aid;
  • exercises its shareholding rights deriving from its participation in banks to which capital support is provided;
  • disposes financial instruments in whole or in part issued by banks in which it participates;
  • provides loans to the HDGIF for resolution purposes; and
  • enters into relationship framework agreements with banks that are beneficiaries of financial assistance by the European Financial Stability Fund and the European Stability Mechanism, in order to provide for the implementation of its objectives and rights, including special rights, provided that it holds shares or other capital instruments or monitors the restructuring plans of subject banks.

Today, through the HFSF, the state participates in the share capital of the four Greek systemic banks. Its share capital includes:

  • 40.4 per cent in the National Bank of Greece;
  • 26.4 per cent in Piraeus Bank;
  • 11.1 per cent in Alpha Bank; and
  • 2.4 per cent in Eurobank.

The government plans to gradually reduce its participation in the share capital of the Greek systemic banks, taking into account the interests of shareholders and the smooth operation and stability of the markets and the banking system.

In the case of a bank’s resolution, the following procedures apply:

  • shareholders are the first to bear relevant consequences of the bank’s resolution and are subject to the bail-in tool;
  • creditors are also subject to the bail-in tool, without prejudice to specific exceptions;
  • depositors are treated as unsecured creditors who are also subject to the bail-in tool, aside from the maximum level of coverage for depositors by the HDIGF); and
  • employees should be consulted during the bank’s resolution process; however, respective employment contracts are not automatically transferred to a bridge bank or other institution following the adoption of a resolution tool.

Bank failures

What is the role of the bank’s management and directors in the case of a bank failure? Must banks have a resolution plan or similar document?

Pursuant to Law No. 4335/2015, each bank that is not part of a group subject to consolidated supervision is responsible for drafting and maintaining a recovery plan, which provides measures to be taken to restore its financial position in the event of a significant deterioration of its financial situation.

The competent authority ensures that banks update their recovery plans at least annually or after a change in legal or organisational structure or business or financial situation, which could have a material effect on, or necessitates a change to, the recovery plan.

Before its submission, the recovery plan must be assessed and approved by the bank’s board of directors and must include:

  • an analysis of how and when the bank may apply, in the conditions addressed by the plan, for the use of facilities provided by the ECB and identify those assets expected to qualify as collateral;
  • the possible measures which could be taken by the bank when the conditions for early intervention under the relevant legislation are met; and
  • the appropriate conditions and procedures to ensure the timely implementation of recovery actions and the range of recovery options, accounting for various scenarios of severe macroeconomic and financial stress relevant to the institution’s specific conditions.

As a general rule, the bank’s board of directors must cooperate and comply with the guidelines and instructions provided by the BoG as the competent authority.

Are managers or directors personally liable in the case of a bank failure?

According to the Sociétés Anonymes Law, each member of the board of directors is liable to the bank for any damage as a result of an act or omission, which constitutes the violation of duties, unless the individual can demonstrate that they used the diligence of a prudent businessperson in similar circumstances. The same liability applies to any individual who acts or represents the company within the context of an authorisation.

Further, pursuant to Law No. 4335/2015, in the event of a significant deterioration in the financial situation of an institution or where there are serious infringements of law, regulations or statutes of the institution, the BoG or the ECB may require the removal of the bank’s senior management or its board of directors, in its entirety or with regard to specific individuals, and order the appointment of new management subject to approval.

Planning exercises

Describe any resolution planning or similar exercises that banks are required to conduct.

See question 13 on bank failure and question 19 on insolvency.

Capital requirements

Capital adequacy

Describe the legal and regulatory capital adequacy requirements for banks. Must banks make contingent capital arrangements?

According to Regulation (EU) No. 575/2013 (Capital Requirements Regulation) (CRR) and Directive 2016/36/EU (CRD IV) implementing the Basel III global regulatory standards on capital adequacy and liquidity, the minimum total capital ratio has been set at 8 per cent, which is composed of a Common Equity Tier I (CET I) capital ratio of 4.5 per cent with the overall minimum Tier I capital ratio of 6 per cent. Banks have been required to gradually increase their capital conservation buffer by 2.5 per cent by 2019 beyond existing minimum equity, raising the minimum CET I ratio to 7 per cent and total capital ratio to 10.5 per cent in 2019. In light of the capital adequacy and liquidity ratios set out in the Capital Requirements Regulation, Greek banks must observe the counter-cyclical capital buffer of up to 2.5 per cent as expansion of the capital conservation buffer, for the banking sector’s protection from excessive credit expansion, as such a buffer is set by the Bank of Greece (BoG) Executive Committee’s Act on a quarterly basis (currently set at zero per cent for the second quarter of 2019).

In addition, Banking Law No. 4261/2014 requires a minimum paid-up initial capital of:

  • €18 million for a Greek bank;
  • €9 million for a branch of a bank authorised in a third country; and
  • €6 million for a pure credit cooperative as provided by Law No. 1667/1986.

These thresholds may be adjusted by the competent authority to amounts of no less than €5 million.

How are the capital adequacy guidelines enforced?

Under the SSM architecture described above, the ECB is exclusively responsible for:

  • capital adequacy guidelines for the four systemic Greek banks;
  • ensuring their robust governance arrangements and capital adequacy requirements;
  • imposing prudential requirements in the areas of:
    • own funds;
    • liquidity;
    • leveraging risk; and
    • remuneration policies; and
  • performing supervisory reviews and stress tests.

The ECB exercises its tasks in cooperation with the BoG.

On the other hand, the BoG retains its full powers for the prudential supervision of the Greek banks that are deemed less significant for EU financial stability.


What happens in the event that a bank becomes undercapitalised?

Depending on the seriousness of the bank’s undercapitalisation, Law No. 4335/2015 provides a set of tools and rules for crisis prevention and response in the following stages:

  • preparatory and preventative measures (eg, recovery plans and rehabilitation projects), including:
    • the sale of assets or business lines;
    • the discontinuation of activities;
    • reorganisation; and
    • downsizing;
  • early intervention measures – the ECB and the BoG are empowered to intervene and request a bank to:
    • implement the arrangements set out in its recovery plan;
    • implement measures to overcome identified problems;
    • remove and replace its board of directors; and
    • make changes to its legal and operational structure. In the case of a bank’s significant deterioration, a temporary administrator may be appointed to replace the existing management of the bank; and
  • implement resolution measures.


What are the legal and regulatory processes in the event that a bank becomes insolvent?

Law No. 4335/2015 introduced a toolkit including the following resolution measures that may be used for the purposes of assisting the recovery of a bank in distress:

  • a sale of business tool;
  • a bridge institution tool;
  • an asset separation tool; and
  • a bail-in tool.

The application of the above measures is subject to certain conditions and requirements, whereas – for the purposes of selecting the appropriate tool – the national resolution authority (ie, the BoG) should take a wide range of factors into consideration (eg, the feasibility and the credibility of the institution in resolution).

The resolution authority has a wide range of resolution powers, including the power to:

  • request any available information from all supervised institutions;
  • carry out dawn raids; and
  • impose fines and administrative penalties.

The authority must work in close cooperation with counterparts at the EU level, namely the SRM and the Single Recovery Fund.

As per Law No. 4335/2015, the consent of the Ministry of Finance is required for the exercise of various powers delegated to the national resolution authority (including giving effect to the bail-in tool).

Recent and future changes

Have capital adequacy guidelines changed, or are they expected to change in the near future?

On 16 April 2019, the European Parliament adopted an extensive set of legislative measures referred to as the ‘banking reform’ or the ‘EU Capital Requirements Regulation II’ package. The texts have been agreed with the EU Council, which is set to formally adopt the package soon. The wide-ranging changes to the existing capital requirements and resolution framework will have a significant effect on banks in the European Union, including on:

  • risk modelling;
  • funding structure; and
  • reporting systems.

On 7 June 2019, the following were published in the Official Journal of the European Union:

  • Regulation (EU) No. 2019/876 of 20 May 2019 amending the CRR regarding the leverage ratio, the net stable funding ratio, requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures to central counterparties, exposures to collective investment undertakings, large exposures, reporting and disclosure requirements (CRR II); and
  • Directive (EU) 2019/878 of 20 May 2019 amending Directive 2013/36/EU (CRD IV) regarding exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers and capital conservation measures (CRD V).

Subject to certain exceptions, CRR II will apply directly across the European Union from 28 June 2021. EU member states are required to transpose CRD V into their national laws and to apply those provisions from 29 December 2020, subject to certain exceptions.

Ownership restrictions and implications

Controlling interest

Describe the legal and regulatory limitations regarding the types of entities and individuals that may own a controlling interest in a bank. What constitutes ‘control’ for this purpose?

There is no restriction on the type of entity and individual that may own a controlling interest in a credit institution or a financial institution. However, the BoG may prohibit an acquisition of a qualifying holding if specific criteria are not met.

Foreign ownership

Are there any restrictions on foreign ownership of banks?

Greek law does not provide for specific restrictions. The ECB or the BoG can oppose a proposed acquisition only if there are reasonable grounds for doing so on the basis of the criteria set out in Banking Law No. 4261/2014.

The ECB and the BoG can neither impose any prior conditions on the level of holding to be acquired nor examine the proposed acquisition in terms of the economic needs of the market.

Implications and responsibilities

What are the legal and regulatory implications for entities that control banks?

If the influence exercised by an entity that has a qualifying holding in a bank is likely to be detrimental to the prudent and sound management of the bank, the BoG can:

  • take required measures to put an end to the situation (eg, impose injunctions and penalties against the members of the management body and managers); or
  • suspend the voting rights controlled by the entity in question.

To perform its supervisory duties, the BoG may also require information and documents on the entity that controls a bank on a regular basis (in particular, on the natural persons forming its management body).

Further, depending on its legal form, an entity with a qualified holding in a bank may be subject to consolidated group supervision, including group financial statement requirements.

What are the legal and regulatory duties and responsibilities of an entity or individual that controls a bank?

An entity or individual with a qualifying holding in a bank must notify the BoG in writing of any intention to increase, sell or decrease above holding, in a way that would cross, reach or fall below certain thresholds.

In addition, an entity with a qualifying holding in a bank must notify the BoG in writing of any change in, among other things, the members of its board of directors or members of its senior management, and must ensure that these persons comply with integrity and trustworthiness requirements on an ongoing basis.

What are the implications for a controlling entity or individual in the event that a bank becomes insolvent?

There are no implications for a controlling entity or individual if a bank becomes insolvent, other than the direct effect of the resolution on their shareholding.

Changes in control

Required approvals

Describe the regulatory approvals needed to acquire control of a bank. How is ‘control’ defined for this purpose?

Banking Law No. 4261/2014 provides the regulatory process that must be followed, not only for the acquisition of control of a credit institution, but also for the acquisition, increase or decrease of a qualifying holding in a bank (ie, of a holding representing 10 per cent or more of the shares or voting rights in a bank).

In particular, any natural person or legal entity deciding to directly or indirectly acquire or increase a qualifying holding in a bank, as a result of which either the proportion of the voting rights or the capital held would reach or exceed the thresholds of 20 per cent, one-third or 50 per cent or the bank would become its subsidiary, must pre-notify the BoG in writing, indicating the size of the intended holding and the fulfilment of certain conditions required by the BoG.

Under the Banking Law, pre-notification to the BoG is also required when acquiring a proportion of voting rights or capital of a bank amounting to at least 5 per cent. However, in this case the BoG will assess – within five working days – whether the holding will lead to a significant influence over the bank and, if so, will notify the proposed acquirer and conduct an assessment on the conditions required for the acquisition.

On assessment of the proposed acquisition, the BoG will prepare a draft decision for the ECB to oppose or accept, based on specific criteria. If the ECB does not oppose the intended acquisition within 60 days, it will be deemed to have been approved.

Foreign acquirers

Are the regulatory authorities receptive to foreign acquirers? How is the regulatory process different for a foreign acquirer?

In principle, the applicable regulatory process does not distinguish between a Greek and foreign acquirer, except for:

  • the extension of the assessment period to a total of 90 days, where the BoG requests additional documents from a proposed acquirer being situated or established in a third country or not subject to supervision under CRD IV, MiFID II, Directive 2009/138/EU (Solvency II), Directive 2009/65/EU (Undertakings for the Collective Investment in Transferable Securities) (UCITS); and
  • the cooperation between the BoG and the national competent authorities of a foreign proposed acquirer, being, among other things, a credit institution or investment firm, authorised in another EU member state.

Under what circumstances can a foreign bank establish an office and engage in business? For example, can it establish a branch or must it form or acquire a locally chartered bank?

Foreign banks may establish a branch in Greece, without the need to form or acquire a locally chartered bank. In particular, EU banks may establish a branch within Greek territory, following compliance with the notification requirements set out in CRD IV and Greek Banking Law No. 4261/2014. The branch may commence its business within Greek territory upon relevant notification issued by the BoG or following the lapse of a two-month period starting from the date where the relevant branch notification was sent to the BoG by the competent authorities of the home member state.

On the other hand, as for the establishment of a Greek branch by third-country banks, a prior authorisation by the BoG is required. Such authorisation in granted on the basis of the principle of reciprocity and subject to any agreements concluded between a third country and the European Union regarding the uniform treatment of branches of third-country banks throughout EU territory.

Factors considered by authorities

What factors are considered by the relevant regulatory authorities in an acquisition of control of a bank?

To ensure the sound and prudent management of the credit institution in which the acquisition is proposed, the BoG will review the notification and all information provided, assess the suitability of the proposed acquirer and the financial soundness of the proposed acquisition and consider:

  • the reputation and reliability of the proposed acquirer;
  • the reputation, knowledge, skills and experience of the proposed new managers;
  • the financial soundness of the proposed acquirer;
  • whether the bank will be able to comply with its prudential supervision obligations on a continuing basis; and
  • whether there is any risk deriving from the proposed acquirer being tied to any money laundering or terrorist financing activities.

Filing requirements

Describe the required filings for an acquisition of control of a bank.

The proposed acquirer must accompany notification to the BoG with specific documentation set out in the BoG Executive Committee’s Act (No. 142/2018).

In particular, the notification submitted to the BoG must be accompanied by certain questionnaires requiring, among other things:

  • general information (eg, the identity of the natural person or by-laws of the entity being the proposed acquirer and any direct or indirect holdings in legal persons or management positions);
  • the aim of the proposed acquisition;
  • information from which the suitability of the proposed acquirer could be assessed (eg, any criminal records or administrative proceedings);
  • information on the financial position and creditworthiness of the proposed acquirer;
  • information on the funding of the proposed acquisition and its source;
  • information on key function holders of the proposed acquirer; and
  • if the proposed acquirer gains control over the bank, a strategic development plan indicating the main goals of the acquisition and the main ways of attaining them pursuant to the proposed qualifying holding.

Timeframe for approval

What is the typical time frame for regulatory approval for both a domestic and a foreign acquirer?

The typical time frame for regulatory approval for domestic and foreign acquirers is as follows:

  • upon receiving the notification, the BoG will acknowledge receipt to the proposed acquirer within two working days;
  • as from the date acknowledging the receipt of notification, the BoG will assess the proposed acquisition, pursuant to the criteria within 60 working. This 60-day period is referred to as the ‘assessment period’;
  • during the assessment period, the BoG may request further information in writing, which is necessary to complete its assessment, in which case the assessment period may be extended to up to 80 days;
  • in the case of a foreign proposed acquirer, the assessment period may in certain cases be extended to up to 90 days;
  • on assessment of the notification – and at least 10 working days before the lapse of the assessment period – the BoG will prepare a draft decision and forward it, together with the notification, to the ECB; and
  • if no opposition is notified to the proposed acquirer in writing, the proposed acquisition is deemed to be approved.

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