Bank Of Greece Sa · ATHEX:TELL
Bank Of Greece Sa — Investor Presentation
14 slides from Bank Of Greece Sa's investor presentation
Slide 1: Public and Private Liquidity During Crises Times: Evidence from Greek Banks
PUBLIC AND PRIVATE LIQUIDITY DURING CRISES TIMES: EVIDENCE FROM GREEK BANKS Antonis Kotidis Dimitris Malliaropulos Elias Papaioannou Discussant: Sergio Mayordomo 8th workshop of the MPC Task Force on Banking Analysis for Monetary Policy Bank of Greece These views are the authors’ ones and do not rep
Slide 2: This Paper
THIS PAPER 1. Effects of ELA program on • Interbank Market: The banks contracted lending in the interbank market in response to ECB policy swing • Provision of ELA: Importance of the ELA as a lender of last resort. 2. Firm level dimension effects • Lending: Banks with higher exposure to the shock re
Slide 3: Outline
OUTLINE • Firm level dimension effects • Effects of corporate lending • Trade effects • Extensions to enhance the contribution to the understanding of the ELA functioning and effects • How did ELA affect the access to financing? • Portfolio reallocation 3
Slide 4: Outline
OUTLINE • Firm level dimension effects • Effects of corporate lending • Trade effects • Extensions to enhance the contribution to the understanding of the ELA functioning and effects • How did ELA affect the access to financing? • Portfolio reallocation 4
Slide 5: Effects on Corporate Lending (I)
EFFECTS ON CORPORATE LENDING (I) • This analysis has to be implemented with the four systemic banks that report exposures exceeding 1 million euros to individual firms. • Firms in this analysis represent 1% of firms in Greece but they account for 40% of lending (very large corporations!) • Additiona
Slide 6: Effects on Corporate Lending (II)
EFFECTS ON CORPORATE LENDING (II) • Aggregate effect (1% of firms) • 1% of firms with very specific characteristics • Access to financial markets… • Aggregate credit at the industry, size or industry-size level • More difficult to deal with demand • It enables you to use the seven banks of the first
Slide 7: Effects on Corporate Lending (III)
EFFECTS ON CORPORATE LENDING (III) • Relationship lending • Defined based on four banks • No significant effect on the interaction between multi-lender firm and the proxy for the bank exposure to ELA • Suggestion to deal with the limitations of RL: Restrict the sample to firms that “only” borrow for
Slide 8: Trade Effects
TRADE EFFECTS • Result: Among single-lender firms, firms more exposed are more likely to terminate an export flow after the shock. • Same issue as with relationship lending • There is no differential effect on export volumes and values • What type of export flows are terminated? Small clients, …. •
Slide 9: Outline
OUTLINE • Firm level dimension effects • Effects of corporate lending • Trade effects • Extensions to enhance the contribution to the understanding of the ELA functioning and effects • How did ELA affect the access to financing? • Portfolio reallocation 9
Slide 10: How Did ELA Affect the Access to Financing?
HOW DID ELA AFFECT THE ACCESS TO FINANCING? • Some evidence on long-term financing • Quantify stigma in financial markets (bond markets?) • Financing in the interbank market • Characteristics of lenders (now all vs Greek banks), types of collateral used, cost of borrowing • Does collateral mitigate
Slide 11: Alternative Explanations of the Rebalancing from Loans to Greek Sovereign Bonds
ALTERNATIVE EXPLANATIONS OF THE REBALANCING FROM LOANS TO GREEK SOVEREIGN BONDS 1. Regulatory compliance (zero risk-weights) • Similar rebalancing to other sovereigns with zero risk-weight 2. Search for yield (general strategy: Banks compensate higher funding costs taking more risk) • No rebalancing
Slide 12: Minor Comment (I): Effects on Corporate Lending (IV)
MINOR COMMENT (I): EFFECTS ON CORPORATE LENDING (IV) • Dealing with ELA conditionalities • Result: Banks that were close to the cutoff reduced lending to a higher extent • Criteria: (i) CET1 > 4.5% & (ii) Tier1 > 6% & (iii) total capital > 8% (?) • ELA eligibility defined based on ex-ante distance f
Slide 13: Minor Comment (II): Provision of Emergency Liquidity Assistance
MINOR COMMENT (II): PROVISION OF EMERGENCY LIQUIDITY ASSISTANCE • Result: A bank’s direct exposure to the ECB waiver shock is positively associated with its borrowing from ELA (importance of the ELA as a lender of last resort). • Control by bank characteristics that evolve over time (stock prices) •
Slide 14: Thanks for your attention!
BANCODEESPANA Eurosistema Thanks for your attention!