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The impact of the EU/ECB/IMF bailout programs on the financial and real sectors of the ASE during the Greek sovereign crisis

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  • Kosmidou, Kyriaki V.
  • Kousenidis, Dimitrios V.
  • Negakis, Christos I.

Abstract

Using a broad set of news reports about the Greek sovereign crisis, we tested for the impact of the troika bailout programs on the banking, financial, and real economic sectors of the Athens Stock Exchange (ASE). Our results reveal that the troika’s actions caused a shift in the systematic risk of firms in all sectors, suggesting that these actions failed to prevent the financial crisis from turning into a real crisis. The actions of the Greek Government only significantly increased the systematic risk for value banking stocks, most likely because established banking firms in Greece hold large amounts of Greek sovereign debt. We also discuss the implications of our findings.

Suggested Citation

  • Kosmidou, Kyriaki V. & Kousenidis, Dimitrios V. & Negakis, Christos I., 2015. "The impact of the EU/ECB/IMF bailout programs on the financial and real sectors of the ASE during the Greek sovereign crisis," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 440-454.
  • Handle: RePEc:eee:jbfina:v:50:y:2015:i:c:p:440-454
    DOI: 10.1016/j.jbankfin.2014.03.008
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    2. Brzeszczyński, Janusz & Gajdka, Jerzy & Kutan, Ali M., 2015. "Investor response to public news, sentiment and institutional trading in emerging markets: A review," International Review of Economics & Finance, Elsevier, vol. 40(C), pages 338-352.
    3. Balcilar, Mehmet & Kutan, Ali M. & Yaya, Mehmet E., 2017. "Testing the dependency theory on small island economies: The case of Cyprus," Economic Modelling, Elsevier, vol. 61(C), pages 1-11.
    4. repec:kap:compec:v:51:y:2018:i:4:d:10.1007_s10614-017-9648-x is not listed on IDEAS
    5. Meredith A. Crowley & Huasheng Song, 2015. "Policy Shocks and Stock Market Returns: Evidence from Chinese Solar Panels," Cambridge Working Papers in Economics 1529, Faculty of Economics, University of Cambridge.
    6. Chiu, Junmao & Tsai, Kunchi, 2017. "Government interventions and equity liquidity in the sub-prime crisis period: Evidence from the ETF market," International Review of Economics & Finance, Elsevier, vol. 47(C), pages 128-142.
    7. Pappas, Vasileios & Ingham, Hilary & Izzeldin, Marwan & Steele, Gerry, 2016. "Will the crisis “tear us apart”? Evidence from the EU," International Review of Financial Analysis, Elsevier, vol. 46(C), pages 346-360.

    More about this item

    Keywords

    Greek debt crisis; Financial and real sector returns; Troika policy actions; News announcements; Event studies;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G01 - Financial Economics - - General - - - Financial Crises
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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