Is a "bad bank" solution for a possible future Greek banking crisis?

Panagiotis Liargovas, Spyridon Repousis

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

This chapter examines the "bad bank" solution for a possible future Greek banking crisis which might originate by the accumulation of non-performing loans in banks' loan portfolios. "Bad bank" solution in Greece is apart from all a funding problem and it is not the best solution to be implied because the Greek economy and the Greek banking sector are in a very weak fiscal position. Greek enhancement programme of ε28 billion was not enough to stabilize the Greek banking sector and offer sufficient funding in the Greek economy. In order to prevent possible future liquidity crisis, there is need to improve liquidity buffer (safe assets) of the Greek banking sector which means higher capital adequacy standards to limit liquidity risk and implement better risk management. A combination of mergers and acquisitions would be the best solution.

Original languageEnglish
Title of host publicationGreece
Subtitle of host publicationEconomics, Political and social Issues
PublisherNova Science Publishers, Inc.
Pages115-127
Number of pages13
ISBN (Print)9781621009443
Publication statusPublished - Jan 2012

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    Liargovas, P., & Repousis, S. (2012). Is a "bad bank" solution for a possible future Greek banking crisis? In Greece: Economics, Political and social Issues (pp. 115-127). Nova Science Publishers, Inc..