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GreeceBusinessHatzidakis: Banks should maintain lower housing loan rates

Hatzidakis: Banks should maintain lower housing loan rates

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Banks should continue to charge lower interest rates on housing loans this year, National Economy and Finance Minister Kostis Hatzidakis said on Wednesday morning, speaking on SKAI television.

“We not only hope but actually cannot conceive that banks will not extend the lower rates for housing loans, which they adopted last year for the period of one year. Because interest rates on a European level remain high, we consider they will move in that direction,” the minister said.

Hatzidakis said that this follows both from the overall good state of the Greek economy and the recovery of investment grade. “We should not forget that our banks were crippled in the previous decade and if we don’t have a healthy banking system, we don’t have a healthy economy. If you look at the figures, you will see that interest rates have risen in all of Europe and, of course, in Greece. [But] the difference … in the average of European interest rates relative to Greek interest rates is smaller, precisely because the economy has improved and we have investment grade. It is one more positive result of the investment grade,” he explained.

Regarding the interest-rate spread between loans and deposits in the Greek banking system, the minister said the Greek banks did not have a strong incentive to raise interest rates on deposits, since they had 200 billion euros in deposits versus just 112 billion euros in loans. “Therefore, they have no reason to offer higher interest to collect money because they have money,” he said, while noting that there were “other alternatives for consumers”.

He pointed out that the citizens could either choose other products, apart from bank accounts, offered by the banks or even invest in interest-bearing state bonds, which offered rates of 4 pct. He also referred to the possibility of non-banking institutions offering loans, stressing that the government wants competition to function.

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“This is why we are investing in the fifth pillar of the banking system and passed legislation in December allowing non-bank institutions … to offer not just consumer but also housing and business loans,” he said.

SOURCE; ANA-MPA

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