The establishment of the first Bank of the Greek State
A primitive credit system
Under these circumstances, any effort towards the Greek economy's development necessarily needed to strengthen its financial liquidity. But there was a difficult problem. In the Greek State, there were no banks. And, consequently, there was no organized and established probability for private lending. This absence brought forward ambitious business people who acquired the role of the lender to the rural population by procuring the forthcoming yearly harvests. The borrowing terms were very unfavorable for the farmers and very profitable for the lenders themselves. This practice resulted in a series of commercially exploitative networks. The country's credit system was in a primitive state.
"Form a sustainable establishment"
The National Financial Bank
Six years after its creation, the National Financial Bank was already a thing of the past. The limited response to the project by the Greek capitalists and the use of its entire capital for purposes related to the pressing obligations of the State were some of the reasons that contributed to its rapid decline. In its six-year course, the National Financial Bank could not proceed with the banking transaction implemented in its statute. But it was made evident to those who were clear-headed and able to understand that no branch of the Bank would prosper without sufficient fund liquidity.
Consequently, the first Greek Bank was not meant to endure. However, the role of its first director would be decisive for the future of Greek economic and banking history. Georgios Stavros was one of the four children of the Giannena-born merchant and elder Ioannis Stavrou. Stavros' father made sure that his son received an excellent education from an early age. From the school of Kosmas Balanos and the Kaplanio School where the great philosopher, Athanasios Psalidas taught him, Stavrou moved to Vienna to study at the Commercial School, where he learned to speak and write German and French. He would then add to his "arsenal" of foreign languages two more: Italian and English. His return to Greece in 1824 was an adventurous one. He quickly joined the national cause and soon rose and distinguished himself for his honesty and fairness.
The insightful move and the establishment of the National Bank
At an undisclosed time, another meeting would act as the catalyst that connected all the remaining people and the scattered pieces of the story. At the beginning of the Regency period, as a member of the Court of Auditors, the former director of the National Financial Bank, Georgios Stavros, met with the French businessman and economist Arthémond de Regny, a close friend of Eynard. The mutual respect and regard that developed quickly led to de Regny's mediation in introducing Stavros to Eynard.
Shortly afterwards, Eynard decided to proceed with an insightful move. He hurried to allocate money, about 300,000 francs, to Regny and Stavros with the intention for them to set up a down-payment office in Athens. The idea behind it was relatively simple. If this small credit "experiment" was successful, then perhaps Otto could be more easily persuaded to implement and develop it on a larger scale. Indeed, the results of the endeavor were very positive and contributed significantly to bend Otto's reservations. The establishing decree of the National Bank went into effect on 30 March 1841.
According to the decree, the National Bank was a public limited company with a capital of five million drachmas, divided into 5 thousand shares of a thousand drachmas each. The Bank had the right to issue banknotes as its exclusive privilege for the entirety of the country for 25 years. The National Bank eventually retained this privilege for 87 years. Its first director was George Stavros, who remained in charge for 28 years, permanently linking his name with the Bank.
The first privately owned building
Sources - Bibliography
National Bank. A course from 1841 and into the future, Editor: Gerasimos Notaras, National Bank Historical Archives, Athens 2014.
National Bank of Greece. Historical Timeline, Editor: Gerasimos Notaras, National Bank Historical Archives, Athens 2008.
Jean-Gabriel Eynard. Visionary and primary contributor to the Establishment of the National Bank of Greece, Editor: Gerasimos Notaras, National Bank Historical Archives, Athens 1999
Georgios Stavros from Epirus 1788-1869. Founder of the economic establishment of the modern Greek State, Editor: Gerasimos Notaras, National Bank Historical Archives, Athens 2010.
Alekos Lidorikis, "Historical Buildings of Banks in the center of the city of Athens," Bulletin of the Greek Union of Banks, Athens 2007.