Deposit Protection in Greece

Bank Account Holders in Greece: Protect Your Account Balance and Qualify for Deposit Insurance Repayment When Banks Fail or Stop

Greece is a country located in southeastern Europe. It is bordered by Albania, Bulgaria, Turkey, and the Mediterranean Sea. Greece is the birthplace of democracy, Western philosophy, and the Olympic Games. Its culture and history have been influential throughout the world. The country has a population of around 10 million and an area of 131,957 km². Its capital and largest city is Athens. The official language is Greek, and the currency is the euro. Greece is a developed country and its economy is based on services, industry, and tourism. It is a member of the European Union and NATO. Greece is renowned for its ancient history, its stunning coastline and islands, its vibrant culture, and its delicious cuisine.

The Greek economy is currently recovering from a deep recession that lasted from 2008 to 2018. Even though positive economic growth is visible, the economy remains fragile whilst historically being highly dependent on external aid from the European Union, International Monetary Fund and European Central Bank. Unemployment is still high at around 20 percent and the public debt is still quite large at around 180 percent of the country’s Gross Domestic Product (GDP).

The European Sovereign Debt Crisis

The European Sovereign Debt Crisis began in late 2009, when Greece was unable to meet its debt obligations. These debt problems uncovered a much larger problem in the European Union: the lack of a unified fiscal and economic policy. Greece was only the first of many countries whose debt issues exposed the vulnerability of the eurozone and its common currency, the euro.

The crisis was further exacerbated by the inability of Greece, Ireland, Portugal, and Spain to manage their debt and deficits in the wake of the global financial crisis. In addition, the crisis was exacerbated by the austerity measures imposed on these countries as a condition of their bailout packages from the European Central Bank and the International Monetary Fund.

The crisis has had a profound impact on the eurozone, causing economic stagnation and high unemployment in many countries. It has also forced the European Union to create a number of measures to address the crisis, such as the creation of the European Financial Stability Facility, the European Stability Mechanism, and the European Central Bank’s Outright Monetary Transactions program.

Although the European Union has taken numerous steps to address the crisis, the long-term effects remain uncertain. The success of the measures taken thus far will depend on the ability of European leaders to work together to create a unified fiscal and economic policy that is sustainable in the long run.

The Greek Banking System

The banking system in Greece is mainly composed of four large private banks and one public bank. The four private banks are Alpha Bank, Eurobank, National Bank of Greece and Piraeus Bank. The public bank is the Bank of Greece, which is the central bank of the country. All the banks offer a wide range of services, including loans and mortgages, savings accounts and credit cards. The banking sector in Greece is highly regulated and overseen by the Bank of Greece, which is responsible for setting monetary policy and ensuring the stability of the banking system.

In addition to the four private banks and the Bank of Greece, there are also a number of smaller regional and cooperative banks, as well as several foreign banks with branches in Greece. These banks offer a variety of services, including online banking. Most banks in Greece also offer ATM services, allowing customers to withdraw cash from their accounts.

The banking system in Greece is generally considered safe and reliable, although there have been some issues in recent years due to the financial crisis and domestic debt problems. However, the government has taken steps to improve the financial stability of the banking system and to protect customers from potential risks.

Bank Resolution and Bank Liquidation in Greece

The procedures for bank resolution and bank liquidation in Greece are governed by the Bank of Greece and the EU Resolution Framework. These procedures involve the identification of a failing bank and the appointment of a resolution authority to take control of the bank and its assets. The resolution authority then proceeds to assess the bank’s assets and liabilities and determine the best course of action for the resolution of the bank. This could include restructuring the bank’s debt, liquidating the bank, or transferring the bank’s assets and liabilities to another bank.

In the event of liquidation, the Bank of Greece is responsible for identifying the buyer of the bank’s assets and liabilities and for determining the conditions of the sale. The proceeds of the sale are then used to repay the bank’s creditors and any remaining funds are distributed to the bank’s shareholders. Resolution measures are triggered when a credit institution is in a states of insolvency or threatened insolvency, when there is no reasonable prospect that alternative private sector initiatives or supervisory measures avoid bankruptcy within reasonable time, or, when resolution action is necessary in the public interest.

Bank resolution in Greece first seeks to consolidate the credit institution by a transfer order, the establishment of a transitional credit institution, the separation of the assets of the bank, or the restructuring of its liabilities. The available resolution tools follow the EU wide Bank Recovery and Resolution Directive (BRRD) and include the transfer order, bridge institution tool, asset separation tool, and the bail-in tool.

When bank liquidation is inevitable, the winding down of the operations take place. Distribution of assets is executed by the applicable insolvency and creditor hierarchy. This hierarchy separates secured creditors from unsecured bank deposits. Bank account holders therefore must pay close attention to the stages of statutory administration and bank deposit insurance.

Bank Deposit Protection in Greece

The Hellenic Deposit and Investment Guarantee Fund pays compensation to depositors and investors of credit institutions unable to fulfill their obligations to them. The fund may also finance resolution measures. Such measures aim to avoid institutional failure to emerge into a systemic financial crisis by the provision of an efficient strategy, alongside the traditional corporate bankruptcy procedures, to resolve the administrative, operational or financial challenges in credit institutions. Additionally, bank resolution measures seek to avoid tax payer input to rescue credit institutions in distress.

The mandate for bank deposit insurance in Greece is given to the Hellenic Deposit and Investment Guarantee Fund (HDIGF/TEKE) by Law 4370/2016. Following the European guidelines, the fund provides a guarantee of up to €100.000 for bank account holders (per person, per bank) in case of a bank failure. Temporary High Balances are covered up to € 300.000 but contain a strict claims procedure.  The fund also provides € 30.000 to protect eligible investment services. TEKE covers all deposits held in Greek banks, including savings, current, and term deposits. The guarantee applies to domestic and foreign currency deposits. The fund is paid by contributions from the financial institutions it covers and the Bank of Greece. TEKE is also backed by a full guarantee of the Greek government.

DGS Claim Filing Procedures

Compensation amounts under the Deposit Coverage Section of the TEKE are available by default. Eligible account holders are contacted by TEKE that a compensation event takes place by using the contact information of the customers available in the records of the bank. Creditors are requested by TEKE to submit verifiable information that allows reimbursement of the insured amount to the correct account holders. In the matter of Temporary High Balances, creditors must submit a substantiated application to TEKE.

Claims that exceed the levels of deposit insurance in Greece are, for the claim surplus, dependent on the local bank liquidation procedures. The claim surplus is subject to statutory rules and are paid out following the applicable insolvency and creditor hierarchy. A write-down of a part of the bank deposit is likely. Claimants can secure their position in several ways. Feel free to contact us to discuss your case and determine the appropriate ways to recover your assets.

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This website is an initiative of Legal Floris LLC. Since more than a decade, we have helped international creditors recover money when their bank fails or their investments disappear. Due to our vast experience in dozens of bank failures in different countries, we are able to maximize repayments and minimize risks for our clients. Contact us right now to find out how we can help you too to reclaim your account balance:

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