Financial sector restructuring in Greece: The impact on activities, financial health and employment

PDF
Published: Dec 5, 2022
Keywords:
Greek crisis Greek banks Financial sector restructuring
Konstantinos Loizos
Centre of Planning and Economic Research (KEPE) and National and Kapodistrian University of Athens
https://orcid.org/0000-0002-2086-8371
Vlassis Missos
Centre of Planning and Economic Research (KEPE) and National and Kapodistrian University of Athens
Abstract

Developments in the financial sector of the economy has attracted the interest of research community, especially after the crisis of 2008, both in Greece and worldwide. Policy makers in the European Union and elsewhere have played a more active role in shaping the regulatory framework for financial institutions’ operation. In this conjuncture, the Greek financial sector, given its major Non-Performing Loans (NPLs) problem, which has been the outcome of the protracted economic crisis (2009-2016), is passing through a period of restructuring and reconsideration of its business model. This paper reviews the developments concerning key indicators of Greek financial institutions about their activities, employment and financial soundness. Our findings indicate that the economic crisis had a significant impact on the current banking landscape and the business model of financial intermediaries which has been characterized by the deep scars of economic recession.

Οι εξελίξεις στον χρηματοπιστωτικό τομέα της οικονομίας έχει προσελκύσει το ενδιαφέρον της ερευνητικής κοινότητας, ιδιαίτερα μετά το ξέσπασμα της κρίσης του 2008, τόσο στην Ελλάδα όσο και διεθνώς. Οι διαμορφωτές πολιτικής στην Ευρωπαϊκή Ένωση και αλλού διαδραματίζουν έναν πιο ενεργό ρόλο στην διαμόρφωση του ρυθμιστικού πλαισίου για τη λειτουργία των χρηματοπιστωτικών οργανισμών. Σε αυτή τη συγκυρία, ο ελληνικός χρηματοπιστωτικός τομέας, δεδομένου του σημαντικού προβλήματος των μη-εξυπηρετούμενων δανείων (ΜΕΔ) που είναι παράγωγο της παρατεταμένης οικονομικής κρίσης (2009-2016), διέρχεται μία περίοδο αναδιάρθρωσης και αναθεώρησης του επιχειρηματικού του υποδείγματος. Αυτό το άρθρο επισκοπεί τις εξελίξεις σε βασικούς δείκτες των ελληνικών χρηματοπιστωτικών ιδρυμάτων σχετικά με τις δραστηριότητες, την απασχόληση και την χρηματοοικονομική τους υγεία. Τα ευρήματα δείχνουν τη σημαντική επίπτωση της οικονομικής κρίσης στο τρέχον τοπίο της τραπεζικής αγοράς και στο επιχειρηματικό μοντέλο των τραπεζικών ιδρυμάτων το οποίο φέρει βαθιά τα σημάδια της οικονομικής ύφεσης.  

Article Details
  • Section
  • Articles
Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Authors who publish with this journal agree to the following terms:

  • Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial-ShareAlike License that allows others to share the work, not for commercial purposes, with an acknowledgement of the work's authorship and initial publication in this journal. If you remix, transform, or build upon the material, you must distribute your contributions under the same license as the original.
  • Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
  • Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
Downloads
Download data is not yet available.
Author Biographies
Konstantinos Loizos, Centre of Planning and Economic Research (KEPE) and National and Kapodistrian University of Athens
Research Fellow KEPE
Vlassis Missos, Centre of Planning and Economic Research (KEPE) and National and Kapodistrian University of Athens
Research Fellow KEPE
References
Adrian T. & Shin S. H. (2010) “The changing nature of financial intermediation and the financial crisis of 2007-09”, Staff Report no. 439, Federal Reserve Bank of New York
Argeitis G. (2012) Default and economic crisis. Failure and collapse of the Greek capitalist model [in Greek: Χρεοκοπία και οικονομική κρίση. Αποτυχία και κατάρρευση του ελληνικού μοντέλου καπιταλισμού] Athens: Alexandria.
Bank of Greece (2014) Governor’s annual report for 2020, Athens: Bank of Greece (April)
Bank of Greece (2014) The years of great crisis. The Bank of Greece 2008-2013 [in Greek: Το χρονικό της μεγάλης κρίσης. Η Τράπεζα της Ελλάδος 2008 – 2013], Athens: Bank of Greece.
Bank of Greece (2018) Governor’s annual report for 2017, Athens: Bank of Greece (February)
Bank of Greece (2021) Governor’s annual report for 2020, Athens: Bank of Greece (April)
Basel Committee on Banking Regulation (BCBR) (2010a), Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems, Bank for International Settlements.
Basel Committee on Banking Regulation (BCBR) (2010b), Basel III: International Framework for Liquidity Risk Measurement, Standards and Monitoring, Bank for International Settlements.
EBA (2019) “Report on NPLs: Progress made and challenges ahead”, European Banking Authority.
European Commission (2012) “The second economic adjustment programme for Greece”, European Economy, Occasional Economic Papers 94.
Francis, J. C. (1993) Management of Investments, McGraw-Hill International Editions.
IMF (2019) Global financial stability report: Lower for longer, Washington: International Monetary Fund.
Jordà, Ò., B. Richter, M. Schularick, & A. M. Taylor (2017) “Bank capital redux: Solvency, liquidity, and crisis” NBER Working Paper Series. Number 23287.
Kolliopoulos, A. (2020) “Bank recapitalizations in Greece: From state-laid bailouts to the ownership transfer of banks to foreign hands”, ELIAMEP, Working Paper 112/2020, (May).
Liargovas P. (2020) Ten years of crisis, three memorandums and one pandemic [in Greek: Δέκα χρόνια κρίση, τρία μνημόνια και μία πανδημία: Η Ελλάδα αναζητώντας διέξοδο], Athens: Patakis.
Loizos K. (2019) “Solving the NPLs’ problem in Greece: where do we stand?”, στο Ten years into the global financial crisis - The current state of finance in the EU: Prospects and alternatives, Nicos Poulantzas Institute, transform! Europe/EuroMemorandum Group.
Loizos, K. (2020) The new bankruptcy law in Greece. An evaluation from the perspective of economic theory and policy, Greek Economic Outlook, 43: 58-62.
Maris, G., Sklias, P. & Maravegias, N. (2021) The political economy of the Greek economic crisis in 2020, European Politics and Society, 1-21.
Missos V. (2021) Introducing a safety net: The effects of neoliberal policy on welfare, poverty and the net social wage during the Greek crisis, Review of Radical Political Economics, 53(1): 58-76.
Missos V. & Loizos K. (2020) ‘The employment adjustment of the financial sector in Greece’ Greek Economic Outlook, issue 41, (February): 40-46.
Mourmouras, J. (2020) “The pandemic crisis as a challenge. Greece the day after”, Opening speech at the IMN's Greek Banking & NPL Management Virtual Event, September 9 available at https://www.bis.org/review/r201009b.htm
Mouzoulas, S., Panagopoulos, Y. & Peletidis, I. (2020) The implementation of the ‘Hercules’ project for the NPLs: Assessment and sustainability prospects, Greek Economic Outlook, 41: 70-90.
Naili, M., & Lahrichi, Y. (2020) The determinants of banks' credit risk: Review of the literature and future research agenda, International Journal of Finance & Economics, 8: 1-27.
Nikolopoulos, K. & Tsalas, A. (2017) “Non-Performing Loans: A Review of the Literature and the International Experience” in Monokroussos, P. & Gortsos, C. (eds.) Non-Performing Loans and Resolving Private Sector Insolvency. Experiences from the EU Periphery and the Case of Greece, Palgrave Macmillan.
Pierret, D. (2015) Systemic risk and the solvency-liquidity nexus of banks, International Journal of Central Banking 11(3): 194-227.
Provopoulos, G. A. (2014) The Greek economy and banking system: recent developments and the way forward, Journal of Macroeconomics, 39: 240-249.
Sklias, P. & Maris, G. (2013) The political dimension of the Greek financial crisis, Perspectives on European Politics and Society, 14(1): 144-164.
Stournaras, Y. (2019) “A systemic approach towards improving asset quality of Greek banks”, speech at the event Tackling NPLs within the Greek Banking System, Hellenic Bank Association, Athens, January, 24 available at https://www.bis.org/review/r190201a.htm
Thomadakis S. & Loizos K. (2011) ‘Financial regulation and financial institutions’ capital cost’ [in Greek: Η χρηματοοικονομική ρύθμιση και το κόστος κεφαλαίου των πιστωτικών ιδρυμάτων], in Chardouvelis G. and Gortsos Ch. (eds.) The international crisis, the eurozone crisis and the Greek financial system, Athens: Hellenic Bank Association.
Vaitsos K. & Missos V. (2018) The Real Economy: Experience of Development, Crisis and Impoverishment in Greece [ in Greek: Πραγματική οικονομία: Εμπειρίες ανάπτυξης, κρίσης και φτωχοποίησης στην Ελλάδα], Athens: Kritiki.
Vogiazas, S. & Alexiou, C. (2013) Liquidity and the business cycle: Empirical evidence from the Greek banking sector, Economic Annals, LVIII(199): 109-125.
Zervas, A. & Fasianos, A. (2018) “Assessing the impact of bankruptcy protection schemes on Non-Performing Loans: The Greek Case”, mimeo.