The government-controlled Bank of Greece (founded in 1927) is the central bank and the bank of issue; it also engages in other banking activities, although the European Central Bank is in charge of monetary policy. There are 33 Greek commercial banks, which are dominated by two massive, state-controlled banking groups, the National Bank and the Commercial Bank. 19 of the commercial banks are foreign, including three American banks. The two leading private banks are Alpha Credit and Ergo, which ranked third and fifth, respectively, in 1997 in the Greek banking industry in terms of assets. Banks still must redeposit 70% of all their foreign exchange deposits with the Bank of Greece at the going interest rate plus a small commission. In 1999, as part of a general privatization program, the government began selling shares in the National Bank of Greece and Ionian Bank was sold outright and taken over by Alpha Credit.
The Currency Committee, composed of five cabinet ministers, controls the eight specialized credit institutions: the Agricultural Bank, National Investment Bank, National Investment Bank for Industrial Development, Hellenic Industrial Development Bank, National Mortgage Bank, Mortgage Bank, Postal Savings Bank, and Consignments and Loans Fund. The money supply in 2001, as measured by M1, was 24.7 billion euros.The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $22.2 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $129.6 billion.
The Athens Stock Exchange (Chrimatisterion) was founded by royal decree in 1876. In 1967, significant reforms were instituted, including more stringent listing requirements, bringing about a rapid increase in the number of listed securities. New legislation was introduced in 1988 to expand and liberalize its activities. The rule changes provided for the establishment of brokerage companies, thus breaking the traditional closed shop of individual brokers. In 1997 there were 53 brokerage houses and just 6 private brokers. Computerized trading was implemented in 1992 and there has since been a rapid evolution of the market. The aim is to secure total dematerialization of shares and to allow brokers to screen-trade from their offices. A satellite trading floor was established in Thessaloniki in 1995. In 1996, Greek law was harmonized with the EU financial services directive, and banks may now be directly represented on the floor of the exchange instead of having to establish subsidiary brokerage houses. The late 1990s witnessed a boom on the exchange. In 1998, the index rose 85%, while the first five months of 1999 saw a further jump of 43.7%. However, this expansion did not continue into the new millenium. Between 2002 and 2003, the index lost 33.1% of its value.