Credit Risk Management: An Examination on the Basis of Exposures with Risk Weighting in Greek Banks

Karafolas, Simeon

doi:10.4236/jfrm.2017.62009

Cited by 2 publications

(3 citation statements)

References 10 publications

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“…In Greece, the financial crisis 2008 turned into an economic crisis in the following decade due to the sovereign debt crisis. The Greek state, having a public debt estimated at 127% of GDP at the end of 2009 and a public deficit estimated at 15.2% of GDP, could not resort to private capital to finance its debt and, in particular, to repay the bonds that matured in 2010 (Karafolas, 2019). The recourse to the European authorities (European Commission and European Central Bank) and the International Monetary Fund was necessary to finance these needs and to meet the needs for the functioning of the state (Bank of Greece, 2014).…”

Section: The Greek Economic Crisismentioning

confidence: 99%

Consequences of the Financial Crisis and Capital Adequacy in Greek Banks

Karafolas,

Stergiou

2023

JFRM

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Distinct from other countries, in Greece, the global financial crisis continued during the decade 2010 and became an economic crisis resulting in a recession. It resulted from implementing measures aimed at reducing Greece's high public debt, as the country had reached an agreement with the European Union and the International Monetary Fund on public borrowing. Unlike other countries, public debt is at the core of the Greek crisis. The economic crisis has primarily affected the Greek banking system, capital banks, and specialized credit institutions such as cooperative banks. The economic depression during the decade was reflected in the banks' activities and results, while in the middle of the decade, it led to a considerable increase in nonperforming loans. In addition to these consequences, most Greek banks suffered from the halving of the value of Greek bonds in 2011, as they were involved in financing the Greek government. The generalization of these phenomena distinguishes the Greek case from other banking systems while limiting the argument of poor management for the outcomes of the banking crisis in Greece. Banks' difficulty meeting the capital requirements set out in the Basel Regulations III was a vital component of the banking crisis. As a result of these difficulties, some banks were unable to meet the requirements and were forced to close or be sold by their parent banks. In the case of a particular category of banks, the so-called economically significant banks, there was substantial public support for capitalization, contrary to the other banks, which had to raise the necessary capital themselves. This article examines the impact of capital requirements on bank development, both for capital and cooperative banks, and also attempts some comparative accounts between them.

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Section: The Greek Economic Crisismentioning

confidence: 99%

Consequences of the Financial Crisis and Capital Adequacy in Greek Banks

Karafolas,

Stergiou

2023

JFRM

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“…Con respecto al caso de los bancos de Chipre, los resultados se refieren al total, dado que el Banco Cooperativo Central de Chipre los incluye a todos. Otra limitación se debe al hecho de que los datos están analizados en base al tipo de aperturas y en base al porcentaje de riesgo (Karafolas, 2017). Esto resulta en una diferenciación de la ponderación de riesgo dentro de un tipo, si se considera que algunos datos no conllevan riesgo, y al revés.…”

Section: Limitaciones De La Investigaciónunclassified

“…In addition to these, two other categories exist which cover the particularly high risk exposures and exposures in default. The 14 categories are as follows (see also Karafolas, 2017): (a) Central governments and central banks, (b) Regional governments and local authorities, (c) Public sector entities, (d) Financial institutions, (e) Parent companies and affiliates, (f) Multilateral development banks, (g) International organizations, (h) Corporate customers, (i) Retail customers, (j) Security by mortgages on immovable property, (k) Exposures in default, (l) Items associated with particularly high risk, (m) Equity exposures, (n) Other items. A risk weighting is applied to every exposure, determined by its associated risk.…”

Section: Crisis Consequences To the Cypriot Cooperative Banksmentioning

confidence: 99%

Crisis’ consequences on recapitalization and exposure for Cypriot and Greek cooperative banks

Karafolas

Kleanthous

2019

Ciriec-España

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The financial crisis of 2008 transformed, in some countries, to economic and social one, created serious problems to the banking system. Capital basis and asset exposures, especially through the non-performing loans, have been the most important. Capital inadequacy caused the failure of banks that didn't succeed to accomplish the capital requirements set by Basel II obligations. The treatment was not the same for all banks as only those considered as significant banks, for the economy, received capital aid from their state. The paper investigates through capital basis requirements and asset exposures the crisis' consequences on Cyprus and Greek cooperative banks. The consequences were cataclysmic for the cooperative banking systems of the two countries. In Greece, the cooperative banks did not receive any state aid, leading to the bankruptcy of many of them. In Cyprus, once all the cooperative banks were merged into the central cooperative bank, the latter received state aid as it was considered as a significant bank for the national economy. Moreover, the high level of non-performing loans and the new economic environment that the crisis had caused, forced the cooperative banks to change their asset exposures structure and their credit policy.

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Credit Risk Management: An Examination on the Basis of Exposures with Risk Weighting in Greek Banks

Cited by 2 publications

References 10 publications

Consequences of the Financial Crisis and Capital Adequacy in Greek Banks

Consequences of the Financial Crisis and Capital Adequacy in Greek Banks

Crisis’ consequences on recapitalization and exposure for Cypriot and Greek cooperative banks

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