Greek competition commission calls for banking reforms to boost deposit rates and competition

Among its recommendations, the Commission proposes strengthening competition through new market entrants, introducing state-backed deposit accounts modelled on France’s savings schemes, developing products with genuine savings features, and introducing measures to help depositors compare products and switch more easily between banks.

Covering the period from 2019 to early 2025, the report highlights the dominant position of Greece’s four systemic banks, which account for more than 90% of total deposits. It also examines the factors influencing deposit rates and depositor behaviour. The Commission stresses that stronger competition could benefit households and businesses by expanding their choices and improving returns on their savings.

Competition Commission Publishes Final Report on the Bank Deposit Market

The Hellenic Competition Commission (HCC) has published the final report of its sectoral investigation into the bank deposit market, which is available here.

The investigation was launched in July 2024, taking into account the structure of Greece’s domestic banking sector and the persistently low deposit interest rates offered by Greek banks compared with the European average.

Its objective was to examine competitive conditions in the bank deposit market between 2019 and early 2025, identify potential market distortions and submit proposals to strengthen competition for the benefit of depositors, including both households and businesses.

For the purposes of the investigation, the HCC worked with independent expert Professor Markos Zachariadis of the University of Manchester (Professor and Chair in Financial Technology (FinTech) & Information Systems, Alliance Manchester Business School), as well as research company Pro Rata, which conducted a consumer survey covering individuals and businesses.

As part of the investigation, the HCC published an interim report in December 2025, which is available here. The publication launched a public consultation, allowing interested parties to submit their views and comments.

In February 2026, the Commission organised a conference to discuss the interim report’s main findings and present its proposals for improving transparency, the comparability of deposit products, depositor mobility and the pass-through of changes in ECB monetary policy to deposit rates.

The final report incorporates the comments submitted by participants during the public consultation, together with the Commission’s responses where considered appropriate.

The investigation examines developments in deposits between 2019 and 2024, including household and business deposit balances, the different categories of deposit products available (sight deposits, current accounts, savings accounts and term deposits), consumer trends and the applicable regulatory framework.

It also analyses the formation of deposit interest rates and the individual factors influencing them, including ECB policy rates, income levels across the economy, capital adequacy, liquidity and funding conditions, as well as profitability, efficiency indicators and credit risk.

The final report also assesses competitive conditions in the financial sector, which is characterised by a tight oligopoly comprising Greece’s four systemic banks: Piraeus Bank, National Bank of Greece, Alpha Bank and Eurobank.

Banks offer two main categories of deposit products: sight deposits and term deposits. Products within each category share broadly similar characteristics, while these markets are characterised by transparency but limited innovation.

Service terms and pricing are largely determined individually by each banking institution, while the relevant contracts are generally standardised and offer limited scope for negotiation between credit institutions and their customers.

Among the most important factors influencing depositors’ choice of provider are customer service levels, the quality of services offered, product variety, specific product features and pricing. These factors shape a financial institution’s standing, reputation and credibility and, ultimately, brand recognition.

The strength of brand recognition is reflected in the fact that more than 90% of deposits are held with the four systemic banks. Furthermore, according to the consumer survey conducted as part of the investigation, 89% of individual and business respondents identified one of the four systemic banks as their main or sole banking provider.

Fewer than one in three individuals and businesses had opened a current or savings account with a bank other than the one with which they already had an established relationship, with most choosing another one of the four systemic institutions.

The report also notes that the overwhelming majority of individuals and businesses who opened term deposits chose a bank with which they already had an existing relationship, indicating a high degree of customer loyalty.

Four Key Recommendations to Strengthen Competition in the Deposit Market

The final report puts forward four main recommendations:

1. Strengthening Competition Through New Market Entry and Expansion

High market concentration and excess liquidity have resulted in limited pass-through of ECB interest rate increases to deposit rates. This applies both to savings accounts with restrictions on withdrawals and transactions, and, more notably, to term deposits, where the funds remain available to banking institutions throughout the contractual period.

The Greek systemic banks are estimated to have made no substantial adjustments to the interest rates offered on either restricted-access savings products or term deposits in response to these increases.

According to the Commission, this lack of competitive response among credit institutions could be mitigated by the entry of a sufficient number of new competitors into the market.

In order to attract an adequate volume of deposits, new market participants would have an incentive to offer more attractive interest rates, potentially prompting systemic banks to respond with similar improvements to retain their deposit base and protect their liquidity positions.

2. Introducing State-Backed Deposit Accounts

The Commission proposes introducing deposit accounts at Greek banks modelled on France’s Livret A and Livret d’Épargne Populaire (LEP) schemes, under which interest rates are determined by the state following a proposal by the central bank to the Ministry of Finance.

Such accounts could create competitive pressure on banks to increase the interest rates they offer to depositors.

These are savings accounts designed to help finance the state budget while allowing account holders to withdraw their money freely.

Until early 2025, the interest rates offered by these French schemes stood at approximately 3% and 4%, respectively, before falling slightly from February 2025 to around 2.4% and 3.5%. These rates compare with the 0.05%-0.07% offered on sight deposits.

However, the Commission notes that comparable schemes abroad are subject to certain restrictions, including deposit ceilings of approximately €20,000 and the requirement that each account holder maintain such an account with only one bank.

The introduction of similar accounts in Greece, whether in the form of savings accounts, term deposits or other customised arrangements, could also complement existing government financing instruments, such as Greek Treasury bills and government bonds.

As these would be deposit accounts, they are not expected to require the same procedures involved in purchasing Treasury bills, which may discourage potential investors.

Furthermore, their shorter maturity compared with government bonds would reduce exposure to uncertainty arising from potentially adverse future developments. Their interest rates would also be known in advance and would not depend on auction results, unlike Treasury bill yields.

3. Developing Deposit Products with Genuine Savings Features

The Commission recommends introducing deposit products with genuine savings characteristics.

One possible option would be a regulated savings account similar to those available in Belgium, known as accounts offering a fidelity premium.

These accounts apply two different interest rates: a base rate and a preferential loyalty rate. The base rate applies to the entire deposit balance, while an additional preferential rate is granted on amounts that remain in the account for one year.

Products of this kind provide an incentive for depositors to maintain higher balances in their bank accounts, while also benefiting financial institutions by strengthening their liquidity positions.

However, the Commission acknowledges that the four systemic banks may be reluctant to commit to relatively high term deposit rates for extended periods, particularly beyond three months, amid uncertainty surrounding the future direction of ECB interest rates. It is worth noting that the ECB discontinued its forward guidance policy in July 2022.

One potential solution would therefore be to develop and promote products specifically designed for savings, offering preferential interest rates to depositors who maintain a predetermined minimum balance, with the greatest possible degree of standardisation.

Indeed, at the time the report was being prepared, banks were already showing interest in gradual savings products designed to attract funds currently held in sight deposit accounts.

Through such products, the Greek banking system could make deposit accounts with genuine savings features available to consumers, even indirectly.

These products would offer depositors higher returns on the balances they maintain while providing greater flexibility in accessing their funds than traditional term deposits, which require money to remain committed for a specified period.

4. Increasing Depositor Mobility Between Banks

The Commission links banks’ limited incentives to offer higher deposit rates to the lack of mobility among depositors.

The time required to investigate offers from alternative providers, the volume of information available—which may create uncertainty about the ability to make informed comparisons and decisions—and various administrative and bureaucratic procedures can all discourage customers from switching banks.

The publication of deposit rates and other banking product rates on the Bank of Greece’s website, which began in January 2025, could help improve depositor awareness and ultimately encourage greater mobility, provided customers are aware that this information is available.

Interest rate comparison websites operating in the Greek market could also make a similar contribution.

One possible solution to reducing consumers’ search costs when looking for the most attractive deposit rates would be to require banks to provide direct access through their websites to both the relevant information published by the Bank of Greece and at least one interest rate comparison platform.

This would allow consumers to compare the interest rate offered on their chosen deposit product directly with all equivalent products available across the market.

Consumer associations could also play an important role by informing households and businesses through various communication channels and facilitating access to both the deposit rate information published on the Bank of Greece’s website and independent comparison platforms.

This would help ensure that the information reaches the widest possible range of depositors, across different demographic groups, in a clear and accessible format.

The Commission also suggests that account number portability could potentially prove effective in strengthening competition, provided that it is not restricted to national borders.

In particular, the development and implementation of a European-wide account number portability system could address the needs of a significant number of consumers, especially those who have limited alternative options for switching banking providers.

One proposed approach would involve creating a single European-level umbrella account number, under which depositors could change their underlying bank account number whenever necessary or desired, while retaining their transaction history.

Such a system could help address existing gaps in banking transactions for both individuals and businesses, at national and cross-border level, although the Commission notes that this solution could potentially be limited to the selection of a single bank account.