Working Paper: CEPR ID: DP2791
Authors: Barry Eichengreen; Heather D. Gibson
Abstract: In this Paper we analyse the current state, past performance, and future prospects of the Greek banking system. Greek banking is in a period of rapid transformation, reflecting the impact of national, European and international forces. Deregulation and European integration are already intensifying competition. The most revolutionary transformation will follow from the privatization of Greece?s public banks. We focus on two challenges for policy makers: the need to strengthen prudential supervision, and the need to manage the process of restructuring so as to deliver a more efficient, competitive banking system.
Keywords: banking; European integration; Greece
JEL Codes: F30; G20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Privatization of public banks (L33) | More efficient banking system (G21) |
| Catch-up competition (L13) | Improvement in banking services (G21) |
| Deregulation (L51) | Improvement in banking services (G21) |
| European integration (F15) | Improvement in banking services (G21) |
| Smaller banks growing (G21) | Benefit from scale economies (F12) |
| Larger banks downsizing (G21) | Exhausted scale economies (D24) |
| Higher market concentration (L11) | Less risk-taking by banks (G21) |
| Market concentration (L11) | Profitability (L21) |