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

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 H ellenic F inancial S tability F und  5. Future Prospects

Crisis. Where? Why? How?  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: UUnemployment NNumber of banks in Greece fell by 17% IInternal devaluation of the currency. TTroika and Memoranda 1&2

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

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

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

Stress Tests.  Deficiency of loaning capitals.  6.4 billion Euros.  Peireos 425 million  Alpha 262 million  Ethniki million

Where will they find these amounts?  1 st to lose are the shareholders  Creditors or bond holders  Uninsured deposits (over )  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. 8_el.pdf 8_el.pdf 4_el.pdf 4_el.pdf HFSF data for Eurobank, Alpha and Peireos banks.

 Thank you for your attention.