The Banking System in Greece EFFECTS OF WORLD

The Banking System in Greece EFFECTS OF WORLD AND GREEK CRISIS ΔΑΒΤΥΑΝ ΤΡΙΑΝΤΑΦΥΛΛΙΑ ΔΗΜΑΣ ΧΡΗΣΤΟΣ 2370 2373 ΔΗΜΟΣ ΠΑΝΑΓΙΩΤΗΣ 2374 ENGLISH FOR ACADEMIC PURPOSES IV ΠΟΛΥΧΡΟΝΙΑΔΟΥ ΜΑΓΔΑ 2502 ΧΑΤΖΗΛΑΖΑΡΟΥ ΛΑΖΑΡΟΣ-ΑΝΤΩΝΙΟΣ (G. L. ) 2557 ECONOMICS UNIVERSITY OF IOANNINA, DEPARTMENT OF

Contents 2. Greek Economic Crisis 2. 1 Greek crisis and Worldwide Crisis 2. 2 Effects of Greek crisis on Greek economy 3. Greek crisis and banking system 3. 1 Importance of banking sector for Greek economy 3. 2 Effects of Greek crisis on banking system 3. 3 Stress Tests 4. The structure of the banking sector 4. 1 The bail in 4. 2 The Hellenic Financial Stability Fund 5. Future Prospects

Crisis. Where? Why? How? 2007. The international financial crisis. Stock markets. Indicators going “crazy”. U. S. A‘s banking precarities Weakness on loan servicing.

Crisis affected Greece. The major effects of the crisis were: Unemployment Number of banks in Greece fell by 17% Internal devaluation of the currency. Troika and Memoranda 1&2

And now Greece needs help. The debt is huge. Viable? No! ECB EC (European Central Bank) (European Commission) IMF (International Monetary Fund) Thus European Union created: EFSF ESM

Banks are very important. Why? reverse selection moral hazard Behavior when in danger! What? Asymmetric information problem When? Before transaction Non creditworthiness units act unexpectedly effectively to be financed with a loan (Mishkin, 1996)

Banks “suffer”… the further reduced rate of growth, the increase in lending rates, the reduce of economic activities, Increasing delay in payments of loans.

Stress Tests. Deficiency 6. 4 of loaning capitals. billion Euros. Peireos Alpha Ethniki 425 million 262 million 2. 183 million

Where will they find these amounts? 1 st to lose are the shareholders Creditors or bond holders Uninsured deposits (over 100. 000) Eventually all the deposits The bail in.

HFSF. (Hellenic Financial Stability Fund)

What about the future? Is really HFSF necessary? Private businesses. Why belong to the state? Bureaucracy. What about the European capital and money market?

There is still hope. ü http: //www. hfsf. gr/files/announcement_20140328_el. pdf ü http: //www. hfsf. gr/files/announcement_20140404_el. pdf HFSF data for Eurobank, Alpha and Peireos banks.

Thank you for your attention.