The crowding out of the Greek banking sector by sovereign debt -

Abstract

After the financial crisis of 2008, the Greek crisis was one the most discussed and controversial issues. The Greek crisis was a sovereign debt crisis. As its name indicates it was due to the excessively high government debt. Greece faced series of downgrades and accordingly bond spreads and CDS increased dramatically. The banking sector, which was performing very well before the crisis, was deeply affected. Banks incurred huge losses and were having difficulty in obtaining funding. This crisis studies how government debt crowded out the Greece banking sector by going through a literature review, then an overview of the crisis in order to analyse how the banking sector was affected.