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Volume 67, Issue 2

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Credit Rationing in Greece During and After the Financial Crisis

Koráb, Petr; Poměnková, Jitka

Year: 2017   Volume: 67   Issue: 2   Pages: 119-139

Abstract: The financial crisis has revealed the vulnerability of the Eurozone’s banking sector to adverse macroeconomic shocks. In this paper we investigate corporate access to bank credit in Greece, combining microeconometric and macroeconometric empirical methods. We employ the Non-parametric Kernel estimate to identify credit rationing at the firm-level and a disequilibrium maximum likelihood approach to identify periods of credit market disequilibrium in Greece between 2003 Q1 and 2015 Q4. The empirical analysis reveals a credit crunch in Greece between 2008 Q4 and 2012 Q4 and provides evidence that credit rationing during this period was not only caused by banking sector factors but also by increasing firm-specific credit risk and by deterioration of the financial health indicators of companies.

JEL classification: E51, G32

Keywords: credit crunch, credit rationing, financial crisis, credit market disequilibrium, non-parametric estimate

RePEc: https://ideas.repec.org/a/fau/fauart/v67y2017i2p119-139.html

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