yannis stournaras : the greek economy - investment gap and the financing of investment needs opening remarks by mr yannis stournaras, governor of the bank of greece, at the presentation of the eib investment survey results 2023 for greece titled : " the greek economy : investment gap and the financing of investment needs ", athens, 30 may 2024. * * * ladies and gentlemen, i would like to welcome you to the ank of greece and to the presentation of the results of the 2023 eib investment survey for the greek economy. in my opening remarks, i will briefly refer to the growth prospects of the greek economy and to the particularly important role of investment. 1. the greek economy : current state and prospects the greek economy grew by 1. 2 % in the fourth quarter of 2023, after 2. 1 % in the previous quarter. this slowdown is attributed to declines in the growth rate of investment and of exports of goods. for 2023 as a whole, the economy continued to grow at a satisfactory rate ( 2 % ), but weaker relative to the exceptional growth in 2022 ( 5. 6 % ). yet, despite successive international crises and high uncertainty due to geopolitical tensions, the greek economy has grown faster than the euro area average since 2021. private consumption, exports of goods and services and gross fixed capital formation remained the main drivers of growth in 2023, although the slowdown in the economies of key trading partners and high inflation exerted a dampening effect on these gdp components. overall, in the coming years, the greek economy is projected to outperform the euro area. this development is particularly important, as it reinforces the process of convergence of greece's real gdp per capita with the average levels of the eu, which was interrupted during the sovereign debt crisis. the main driving forces of economic activity will continue to be investment spending, thanks to the contribution of the european funds, in particular of the rrf, as well as private consumption, due to a rise in real disposable income on account of higher employment and lower inflation. 2. the role of investment spending given the problems of population ageing, low birth rates and low labour force participation, the role of investment in physical and human capital becomes decisive for the future course of the economy in both the short and the long run. in the short run, investment spending boosts demand and growth. in the long run, it increases the capital

capital requirements regulation ( crr ) and directive ( crd iv ) play a prominent role in setting the prudential standards in the eu. implementation is ongoing and expected to be completed by 2019. from january 2016, the countercyclical capital buffer ( ccb ), the systemic risk buffer ( srb ) and the other systemically important institutions ( osii ) buffer, three important macro - prudential tools, have been operational. however, given the need to diversify the available tools beyond regulations based on capital, tools based on liquidity, leverage and funding sources are also being introduced. with regard to the borrower ’ s side, instruments such as the loan - to - value ( ltv ), loan - toincome ( lti ) and debt - service - to - income ( dsti ) limits are considered to be among the most effective macro - prudential instruments in curtailing excessive credit growth and the build - up of unsustainable debt positions. in order to effectively moderate the financial cycle, a timevarying dimension is crucial in the design of the various ratios. for example, the loan - tovalue ratio should be lowered during the expansionary phase of a financial cycle and raised during the contractionary phase, while respecting the mandate of financial stability and avoiding the build - up of systemic risk. otherwise, there is a risk of pro - cyclicality since leverage constraints decline as asset prices rise. it is imperative, however, that the macro - prudential toolbox be further enhanced with innovative tools beyond those outlined above. cyclical systemic risk can arise not only as a result of excessive credit expansion ( an issue that can be addressed with the countercyclical capital buffer along with limits on borrowing ) but also because of inadequate channeling of credit that keeps the real economy under - financed for extended periods. a lesson drawn from the crisis is that we have focused on rather narrow areas of financial activity. nowadays, it is important that we focus on the risks that might have been missed such as the interlinkages between sectors, and thus explore how the financial system can influence, and be influenced, by the wider economy. in the euro area, there is evidence of limited financing of the real economy, with the consequence that euro - area investment has not recovered to pre - 2008 levels despite ecb policies directly aimed at increasing the lending of the banking sector. bis central bankers ’ speeches c. challenges ahead and the way forward challenges