The Postbank case is rather distinct and special. Those who have closely followed the developments in the Greek banking market will know that the Postbank was largely considered as the classic example of a savings institution.
Its main function was to collect the small accounts and savings of the people all over Greece, even in the most remote town in the Greek countryside. The bank did not give loans and was never involved in funding private entities.
When the country joined the Eurozone, which brought on the deregulation of the banking sector and opened up the credit market, it was decided to change the bank’s role and character.
In an era where financial services dominated, it was considered wasteful for an institution with nearly 15 billion euros in its accounts to remain virtually inactive.
The first steps of expanding activities were small, by gradually making credit cards available.
However, after 2004 the pressure to become a full-on credit institution increased. The truth is that the commercial banks were claiming the Postbank mostly due to its size and the network of its accounts.
That is how the bank gradually began to change after 2004.
The bank’s liberal managers had a blast during the first Karamanlis period. At first they invested a huge part of their funds in toxic bonds and then began giving out business loans indiscriminately, without upholding even the most basic credit rules.
The people who assumed the bank’s management were so aggressive and the times were that good for the “wolves” of the markets, that there was no chance they wouldn’t create the sort of monsters that are now coming to the light.
There were objections to Mr. Filippidis’ management since then. His confidence, style and prior history in the stock market created certainties about how he was going to perform his duties.
Nobody had any doubts.
The climate and dynamic atmosphere in the credit market was such though, that nobody paid attention to the warnings and reports that posed questions regarding the observation of credit regulations.
The “wolves” dominated then and cared about nobody. They felt powerful, the management of money turned them into little gods, who believed they were untouchable, as they collected funds from left, right and center…
Truth be told, during that phase of credit madness, some spoke about “money whores” and some references were made in Parliament, but nobody was concerned. When the Bank of Greece banned Mr. Filippidis of granting loans, he vehemently protested about how the institution’s development was being undermined, while he helped his friends and “brothers” at will.
Without a doubt, Mr. Filippidis is not the only example. There were many more who acted in a similar way. Most of them were dispelled, lost the banks they used to manage and some ended up in prison.
That, however, is not the Greek banking system. During the period of great euphoria there were credit institutions that did not follow Mr. Filippidis’ toxic example, but instead chose to observe the credit rules, eschewing excessive profits in favor of expanding their operations from Warsaw to Cairo.
But that is a different kind of story that nobody mentions during these circumstances…
Antonis Karakousis
