Non-performing Loans in the Greek Banking System: Navigating Through the “Perfect Storm”

Paul Mylonas and Nikos S. Magginas
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Paul Mylonas: Deputy CEO, National Bank of Greece
Nikos S. Magginas: Senior Economist, Economic Analysis Department, National Bank of Greece

Chapter 12 in Non-Performing Loans and Resolving Private Sector Insolvency, 2017, pp 275-306 from Palgrave Macmillan

Abstract: Abstract In view of the severity of the Greek sovereign debt crisis, the analysis presented in the chapter focuses on the macroeconomic drivers of the deterioration in non-performing loans at an economy-wide level, as well as the two larger loan categories of Greek banks’ portfolios, that is, mortgage and corporate loans. The empirical results indicate that the collapse of economic activity and the sharp increase in unemployment, as expected, were the main factors underlying the sharp deterioration in loan quality. However, the empirical evidence is supportive of the existence of other distinct factors that affected non-performing loan generation, related to the extremely procyclical fiscal policy, the protracted liquidity squeeze and the high uncertainty related, inter alia, to Greece’s euro area membership status.

Keywords: Non-performing loans; Greek banking system; Financial distress; Macroeconomic drivers; GDP; Unemployment (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-50313-4_12

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DOI: 10.1007/978-3-319-50313-4_12

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