Financial and Macroeconomic Drivers of Bank Profitability: Evidence From Greek Systemic Banks During 2009-2019

Literature Review

According to Katsimi and Moutos (2010), the situation that led to the Greek crisis mainly featured bureaucracy, vested interests and relations between private interests and the public sector, which contributed to the mismanagement of public resources, tax evasion and the deterioration of the quality of public services. At the macroeconomic level, governments proved to have been unable to reduce the fiscal deficit. On the side of the Greek statistical authorities, there may have been not only misrepresentation of data, but also significant errors on the side of European partners. The latter revealed the weakness or reluctance in their reactions to the visible signs of Greek failure, such as the chronically large current account deficits. In this regard, Kotios and Roukanas (2013) analysed the Greek financial crisis in light of the functional responsibilities and inadequacies of eurozone governance. Some of the dimensions of the management of the Greek crisis are the weaknesses of the European decision-making mechanism and European leadership, the economic nationalism displayed by some member states, the risks of contagion of the crisis to the Eurozone and the overreactions of markets and credit rating agencies.