Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
982727 | Procedia Economics and Finance | 2014 | 13 Pages |
In this paper we consider whether the instability and the possible collapse of the Greek Banking System creates a graeat systematic risk and according to this, the possibility to prevent in the future the crisis and collapse.,by the proper use of supervisory methods of Basel I and II and the transformation of the European financial structures and procedures of the euro system.After the latest development about Cyprus banking system Crisis and searching the reasons of this Crisis (of March 2013),before and after the decisions of Euro group (of 15/3/2013) we have to answer about the situation that emerged.The questions was about the reformations needed after the decision of Eurogroup, including the shrinkage of Cyprus banking system, to a more smaller in capitalization and in volume of turnover, of the existed banking system in Cyprus.The Eurogroup insisted, that the size of banking system, is now 8 times bigger than the G.D.P. of the country, asking simultaneously from Cyprus government, to alter the economic model of the country, by reducing the service/banking sector, after the bankruptcy of one at least of the two bigger banks.The big problem emerged, after the declaration of the suspension of the «deposits guarantee» and the fear of the “Bank run” and the following collapses of banks in many states. So we have to examine the right application of rules and procedures for the Banking system. The target is to examine the mistakes and inefficiencies, that brinks the system very near to collapse, through the contagion mechanism, to the rest of Eurozone and mainly to Greek Banking System.After the above, we have to examine and re-examine the methods of Supervision of Banking System procedures (choosing among other) political/country risk and credit risk, in order to increase the credibility and the soundness of Banking System.So we have to analyze here a “Systematic Risk” situation and analyse the Methods referring to the supervisory criteria of Banking System to prevent the negative impacts of the systematic risk, that is possible to lead to an “irregular” bankruptcy.