entry, of the high obligatory reserves ( 12 % ) held at the bank of greece, easier access to the main international financial markets and to the ecb refinancing facilities as well as the sizeable growth in greek national income increased considerably the lending capacity of the greek banking sector, underpinning its expansion. the average rate of growth of bank lending to the private sector ( corporates and households ) has exceeded 20 % since 2000, almost three times the annual growth of nominal gdp, with lending to households growing at over 30 % on average. such a high rate of growth, also stimulated by low euro area interest rates, has contributed importantly to the significant rise in the standard of living of the greek population and to the fast rate of growth of gdp. indeed, a significant proportion of bank lending has been financing private investment, and has thus contributed to the growth of potential capacity. today there are 62 banks operating in greece, of which 22 are commercial banks, 16 cooperative banks, 23 foreign branches and one special credit institution ( the loans and consignments fund which is exempt from the provisions of banking law 2075 / 92 ). the banking sector plays a dominant role in the financial sector, since it accounts for approximately 85 % of total financial sector assets ; if we include the financial subsidiaries of the banks as well, that is, insurance companies, mutual funds, brokerage houses etc, the figure is close to 95 %. its importance is also underlined by the fact that banks with their subsidiaries represent about 1 / 3 of the capitalisation of the athens stock exchange, and the evolution of share prices in the banking sector has a proportionately greater impact on the general index of the stock exchange. within the banking sector, commercial banks have a market share of around 85 %. foreign branches account for around 10 %, the loans and consignment fund 3. 5 %, while cooperative banks represent less than 1 %. the degree of concentration of the greek banking sector is somewhat above the euro area average, even if we exclude germany with its more than 2000 mainly small local banks ; it is, however, around the average of countries of a broadly similar size. the five largest banks control 66 % of the banking system assets, which is lower than the 85 % of the netherlands and belgium, close to the 69 % of portugal, but above the 45 % of austria. financial liberalization, the facility with which capital was raised in the athens stock exchange until 2000, and favourable

exposure, such as lending with property as collateral, the current standard measures often give the same risk weight regardless of the loan - to - value ratio. this will probably be changed so that the capital requirement varies according to the loan - to - value ratio. this work also covers trying to reduce the mechanical dependence on external credit ratings, which is in line with the objectives stated by g20. supplementary requirements will increase the banks ’ resilience on the basis of the revised standard methods, the basel committee is also working on new floors to limit how low the banks ’ risk weights can fall. in this way, one also limits how low their capital requirements can be. it means in practice that the banks ’ future 2 capital requirements must amount at least to a certain percentage of the capital requirements the banks would have if they instead used standard methods to calculate their capital requirements. similar regulations already exist in the form of the old basel i floor. the basel committee introduced the basel i floor for the specific purpose of avoiding a situation where the banks ’ capital requirements decline too much and too quickly when the committee decided to introduce basel ii. the new regulations are not at all revolutionary in themselves, but focus on bringing the existing framework up - to - date. it is also reasonable to link together the standard methods and the internal models in this way, from both risk and competition perspectives. the fact that there is some relationship between standard methods and the banks ’ own models ensures that the capital requirements do not differ too much. in addition to the floor regulations, the basel committee will decide on the final form and calibration of the leverage ratio requirement. the basel committee is planning, as announced earlier, to introduce an international minimum requirement in the year 2018 of three per cent, and possibly somewhat higher for systemically - important institutions. having a leverage ratio requirement is an important step forwards, as this gives us a commonly agreed highest level as to how much the banks can debt finance their operations, regardless of the level of risk in their operations. excessive debt is namely a common denominator in most financial crises. even before the crisis, a number of banks expanded their operations substantially with the aid of debt financing. when the markets became shaky it turned out that many banks lacked sufficient capital to cover their losses. the idea of the leverage ratio requirement is that it should be a relatively simple and transparent supplementary capital requirement that sets an upper limit as to how much leverage the banks can take on. basel ii created too much freedom for