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Greek Banking Expansion in South Eastern Europe and its Role in the Post-2009 Recession

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  • Yiannis Kokkinakis

    (Department of History and Archaeology, University of Crete, Greece, Misail Apostolidou 1, 73131 Chania, Crete-Greece.)

Abstract

Capital investments by Greek banks in South Eastern Europe expanded rapidly during the period immediately before and after the introduction of the Euro. Through mergers and acquisitions, direct investments in a network of affiliated banks and subsidiary companies, as well as credit granted to Greek industrial capital invested in the region, by the mid-2000's the Greek banking system had come to possess a substantial share of the entire South Eastern European banking sector. The commitment to support subsidiaries in the area has had negative consequences as regards the provision of credit and liquidity in the rapidly shrinking post-2009 Greek economy. The so-called Vienna initiative involved undertakings by major international financial bodies and the most important European institutions to maintain the exposure of western parent banks to emerging Europe. In conjunction with the Greek sovereign debt crisis, this increased the overall burden of the bailout loans, and hence European Union and IMF involvement in Greece. This in turn contributed to the imposition of austerity measures that impaired an already fragile internal market.

Suggested Citation

  • Yiannis Kokkinakis, 2016. "Greek Banking Expansion in South Eastern Europe and its Role in the Post-2009 Recession," International Journal of Economics and Financial Issues, Econjournals, vol. 6(3), pages 1072-1080.
  • Handle: RePEc:eco:journ1:2016-03-33
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    References listed on IDEAS

    as
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    2. Eugenio Cerutti & Anna Ilyina & Yulia Makarova & Christian Schmieder, 2010. "Bankers Without Borders? Implications of Ring-Fencing for European Cross-Border Banks," Chapters in SUERF Studies, SUERF - The European Money and Finance Forum.
    3. Ralph De Haas & Yevgeniya Korniyenko & Elena Loukoianova & Alexander Pivovarsky, 2012. "Foreign Banks and the Vienna Initiative: Turning Sinners into Saints?," Mo.Fi.R. Working Papers 62, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    4. Allen, Franklin & Gu, Xian & Kowalewski, Oskar, 2011. "Corporate Governance and Intre-group Transactions in European Bank Holding Companies during the Crisis," Working Papers 11-35, University of Pennsylvania, Wharton School, Weiss Center.
    5. Ms. Yuliya Makarova & Ms. Anna Ilyina & Mr. Christian Schmieder & Mr. Eugenio M Cerutti, 2010. "Bankers Without Borders? Implications of Ring-Fencing for European Cross-Border Banks," IMF Working Papers 2010/247, International Monetary Fund.
    6. Ralph De Haas & Yevgeniya Korniyenko & Elena Loukoianova & Alexander Pivovarsky, 2012. "Foreign banks and the Vienna Initiative: turning sinners into saints," Working Papers 143, European Bank for Reconstruction and Development, Office of the Chief Economist.
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    Cited by:

    1. Alexandru Manole & Diana Dumitrescu & Daniel Dumitrescu, 2016. "Impact of EU funds absorption in ensuring macro stability," Romanian Statistical Review Supplement, Romanian Statistical Review, vol. 64(9), pages 30-35, September.

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    More about this item

    Keywords

    Greek Banks; Balkans; Vienna Initiative; Financial Crisis;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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