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Greece (2008) - Capital Injections

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In October 2008, in the midst of the Global Financial Crisis (2007-09), the Greek government announced a EUR28 billion ($36 billion) government package. Greek Law 3723/2008, "Enhancement of Liquidity in the Economy in Response to the Impact of the International Financial Crisis," was passed and approved under European Union State Aid rules. The Greek law provided for three voluntary programs: recapitalizations (EUR5 billion), guarantees (EUR15 billion), and securities (EUR8 billion). This case study exclusively examines the recapitalization program. In this program, the Greek government acquired convertible preferred shares in banks in order to build and maintain banks' Tier 1 capital at a minimum of 8% of risk-weighted assets. By July 2009, 10 banks had received capital injections for a total of EUR3.8 billion.

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  • Leon Hoyos, Manuel, 2021. "Greece (2008) - Capital Injections," Journal of Financial Crises, Yale Program on Financial Stability (YPFS), vol. 3(3), pages 106-127, April.
    • Handle: RePEc:ysm:ypfsfc:3377
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    File URL: https://elischolar.library.yale.edu/cgi/viewcontent.cgi?article=1219&context=journal-of-financial-crises
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    1. Petrovic, Ana & Tutsch, Ralf, 2009. "National rescue measures in response to the current financial crisis," Legal Working Paper Series 8, European Central Bank.
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    More about this item

    Keywords

    banks; capital injections; financial crisis; Greece; recapitalization;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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