The impact of the EU/ECB/IMF bailout programs on the financial and real sectors of the ASE during the Greek sovereign crisis

Abstract

Using a broad set of news reports about the Greek sovereign crisis, we tested for the impact of the troika bailout programs on the banking, financial, and real economic sectors of the Athens Stock Exchange (ASE). Our results reveal that the troika’s actions caused a shift in the systematic risk of firms in all sectors, suggesting that these actions failed to prevent the financial crisis from turning into a real crisis. The actions of the Greek Government only significantly increased the systematic risk for value banking stocks, most likely because established banking firms in Greece hold large amounts of Greek sovereign debt. We also discuss the implications of our findings.