the financial crisis in greece did not originate in the banking sector but in the public sector
banking sector vulnerability has increased however due to the exposure of the banks to greek government bonds and more importantly due to low economic growth prospects
the commission in making its own analysis of the greek economy and financial system takes into consideration multiple sources of information including the credit agencies
in this context the commission is carefully monitoring implementation of the additional fiscal measures announced by the greek authorities on three march twenty ten and adopted by the greek parliament on five march twenty ten with a view to achieving the twenty ten budgetary targets
the commission is closely monitoring developments in the greek banking sector
some eight of the banks assets are in the form of government bonds or loans although the government and non-performing loans arising are not expected to top eight per cent in twenty ten due to the weak economy
furthermore greek banks are heavily dependent on the ecb refinancing operations for short-term funding being shut off from the international money markets
the commission takes its responsibility to ensure macro-financial stability in the euro area and the eu as a whole
indeed banks in other eu countries are exposed to the greek crisis mainly through their holdings of government debt with france and germany the most concerned
while these exposures are not very large in terms of gdp they are likely to be more significant in terms of the balance sheets of individual banks
meanwhile about ten of greek banks balance sheets is invested in southern and eastern europe implying another transmission channel
