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Specifically in November 1988, a shortfall of US$132 million was discovered in the Bank of Crete some months after bank chairman Koskotas, a Greek-American millionaire entrepreneur under investigation for large-scale financial crime, had fled the country. In the months that followed, alleged connections between Koskotas and the PASOK government, and even with prime minister Andreas Papandreou himself, brought the resignations of several ministers and demands for a vote of no confidence in the government.

Eventually the bank was privatised, and merged into other banking entities in Greece .