Analysis of Financial Crisis Results on Dry Bulk Market & Financing

Evangelos Sambracos or Samprakos () and Marina Maniati

MPRA Paper from University Library of Munich, Germany

Abstract: The maritime industry provides an efficient method of transporting large volumes of basic commodities and finished products, with more than one-third of all international seaborne trade consisting of dry bulk cargo. Historically, the period that preceded the global financial crisis was characterized by accelerated growth, which culminated with the historic high point in the dry bulk freight market recorded during the second quarter of 2008. However, since mid-2008, the dry bulk sector presents high volatility, reflecting both lower demand for maritime transport and increase of the expected capacity.Within this framework, commercial banks, being the main source of financing for the shipping market, which is characterised by high capital and operating costs, have significantly reduced the volume of loans granted in the industry. The latter is of particular importance considering the recent regulatory framework for banks apllied by the Basel III that limits the exposure of banks in sectors, like dry bulk shipping, that present high risk rate.

Keywords: Finance; Shipping Market; Risks; Basel Accord(s) (search for similar items in EconPapers)
JEL-codes: E32 G15 G32 R40 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-mac
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