19102017Headline:

Prosecutor presses felony charges against former central banker and Piraeus Bank head

An economic prosecutor on Thursday brought felony charges against the former Bank of Greece (BoG) governor George Provopoulos, the former Piraeus Bank chairman Michalis Sallas and a number of executives from both banks on Thursday, for actions in 2009 that harmed the reserves of pension funds.

The charges against Provopoulos are repeated breach of trust, in conjunction with the aggravating circumstances of the law against state embezzlers, and moral instigation in the breach of trust for Sallas. Among the other executives being charged, is the then vice president of Piraeus Bank’s board and current CEO of Attica Bank Theodoros Pantalakis.

The charges were called by economic prosecutor Panagiotis Athanasiou after an investigation conducted by deputy economic prosecutor Eleni Michalopoulou, who stated that, the central bank, during the disputed period, didn’t protect as he ought to have done, the reserves of the pension funds (which are managed by the central bank), resulting in the loss of millions of euros in favour of Piraeus Bank.

Michalopoulou said the BoG traded titles solely with Piraeus Bank, which meant the latter benefited from a beneficial restructuring of its portfolio, while pension fund reserves were hurt, or at least risked as a result of the process. Following this exchange, the launching of a bond swap program with the private sector aimed at reducing Greece’s debts – known as the PSI – the funds lost a further 53.5 percent of their value, while Piraeus Bank benefited, as the bonds it bought were not included in the PSI.

An investigative magistrate has taken over the case.