Greece plans to tighten oversight of banking groups by requiring parent holding companies to obtain central-bank approval before reducing capital or repurchasing shares, under legislation submitted to Parliament.
The measure, included in a bill from the Ministry of National Economy and Finance, extends existing regulatory requirements beyond banks to financial holding companies subject to European capital-supervision rules.
Under the proposed framework, eligible parent companies would need prior authorization from the Bank of Greece before conducting share buybacks, redeeming capital instruments or reducing regulatory capital.
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The changes aim to prevent financial groups from distributing funds to shareholders without regulatory scrutiny of the potential impact on their capital strength.
The legislation doesn't prohibit buybacks or capital reductions but requires regulators to assess whether such transactions comply with European prudential standards.
Separately, the bill would ease restrictions on transferring deposits, assets and liabilities from banks undergoing liquidation.
Under the proposed rules, transfers could be made to any bank legally operating in Greece, eliminating a previous requirement that the acquiring institution already operate in the affected region.
Such transfers would require approval from the Bank of Greece and the consent of the country's Systemic Stability Council.
