Editorial To Vima: The obligations of banks to depositors

Many suffered during the great economic crisis. Our fellow citizens lost their jobs and income. Many plunged down the ladder of social strata, some lost everything and others decided to emigrate.

Yet the majority of Greek citizens in the broader circle of the middle class – people who in previous decades had a home, family, children, a job, and small bank deposits – literally ground their teeth, cut almost all expenses and preferred to remain in Greece, tolerating everyone and everything.

This broad but invisible mass of people paid all their debts, accepted wage and pension cuts, sought alternative sources of income, revived their forgotten tracts of land in the villages, found small sources of income and humble activities.

The middle class fought tooth and nail and did not spare toil and sacrifices.

These are people who never thought of taking their deposits out of the country and preferred to keep them in the essentially bankrupt Greek banking system, assuming the entire risk and danger of state bankruptcy.

The remaining 130bn euros in deposits that were not transferred abroad and kept the embattled banks alive during the decade-long crisis came from the suffering middle class.

Unfortunately now that there are faint indications of an exit from the crisis they are being punished again by zero interest rates – the result of particular monetary conditions internationally which by all appearances will continue.

Most are middle aged or senior citizens who hoped for some returns to give them security in their golden years and to secure the progress of their children.

Now they feel that they will face a new cycle of losses because they will almost have to pay banks to keep their money.

These are people who cannot bear the risk of a new investments which might have offered more returns on their money. It is the banks that they know, trusted, and continue to trust and they are unlikely to undertake the risk of an investment.

Credit institutions and managers owe almost everything to this circle of faithful depositors – their continuity and even their existence.

In other words they have an obligation at least to honour and reward somehow this relationship of trust that endured the test of time.

Bank managements must offer alternatives that are safe and with greater returns so that deposits can be invested.

Banks have the mechanisms and strength to highlight and present to depositors alternative products and investment schemes that would offer returns that can supplement their current paltry income.

The international banking system offers a large gamut of such alternative investment products.

They need only refer to international practice and the experience of strong and organised multinational credit firms.

It is a matter of honour and trust for bankers, who thanks to all these depositors continue to receive very large salaries, bonuses, honours and glory.