After more than twenty years of banking scandals, regulatory inertia, and public distrust, the Bank of Greece has finally moved to reform its supervisory framework—a move many argue is not only long overdue but a direct response to growing criticism of its prolonged passivity. For years, the central bank stood by as systemic weaknesses and conflicts of interest festered within Greece’s financial institutions. Scandals came and went, many quietly shelved or stalled, particularly after the 2019 legal amendment introduced by the Mitsotakis government that effectively shielded senior bankers from prosecution unless a formal complaint was filed. That amendment, which remained in force for five years before being repealed by the same government, rendered accountability largely symbolic during a critical period for the sector.
Now, with the introduction of Decision 243/2 on July 7, 2025, the Bank of Greece appears to be trying to reclaim its role as a serious supervisory authority. The new framework replaces the long-outdated Governor’s Act 2577/2006 and aims to bring the country’s banking oversight in line with European Banking Authority (EBA) standards. It establishes a modernized internal governance model for credit and financial institutions, placing new emphasis on risk management, ethical standards, and board accountability.
Whether this reform marks a genuine shift or simply a bureaucratic catch-up remains to be seen. The delay alone has raised questions about the central bank’s independence and willingness to confront entrenched interests within the sector it is supposed to regulate. Critics point out that many of the principles now being introduced—transparency, internal controls, whistleblower protections, and conflict-of-interest safeguards—are neither novel nor revolutionary; they are basic tenets of sound financial regulation that should have been implemented years ago.
Nonetheless, the framework is broad in scope. It applies to all Greek-based credit institutions, their parent financial holding companies, and branches of non-EEA banks operating in Greece. At the core is a redefinition of the Board of Directors’ responsibilities, which now formally include ultimate oversight of strategy, governance, and risk. The framework demands functional independence for key internal roles, clearer lines between executive and non-executive duties, and a more transparent link between remuneration and performance.
There is also a pronounced shift toward embedding a culture of risk awareness within the institutions’ internal operations. Environmental, Social, and Governance (ESG) considerations are now formally integrated, reflecting a broader European push toward responsible banking. Compliance with these rules must be achieved by October 1, 2025, with a transitional period currently underway.
Significantly, the framework introduces obligations for identifying and managing conflicts of interest, both at the organizational level and among individual staff. Greek banks have long been dogged by allegations of insider dealing, nepotism, and opaque decision-making—issues which, until now, have largely gone unchecked by regulators. Under the new rules, staff must disclose any potential conflicts, while boards must abstain from decisions that could be compromised by personal interest.
Ethics, compliance, and fraud prevention are now institutional obligations, and a whistleblower system is mandated to allow for the confidential reporting of violations—though again, many critics question why such basic protections were not already in place.
In theory, the reform package has the potential to transform the Greek banking sector. In practice, its impact will depend entirely on the willingness of the Bank of Greece to enforce what it has, until now, been accused of neglecting.
