Bank Liberalization and Profitability: Evidence from Greek Commercial Banks
Posted: 15 Oct 2000
This paper investigates the evolution of the determinants of bank profitability for a small bank market, as it is the case of the Greek market. The period examined, 1980-1991, is divided into three subperiods, one in which banks functioned under a highly restricted environment, a second one, where certain changes occurred towards deregulation and a recent one, since 1987, when significant changes have been introduced liberalizing the market. The results suggest that the determinants of profitability of Greek commercial banks were highly different from those depicted in other countries during the periods of intense regulation in Greece. However, liberalisation of the Greek financial system, has brought these determinants more in line with international experience, and thus has normalised the behaviour of Greek commercial banks.
JEL Classification: G21
Suggested Citation: Suggested Citation