Title: Do the Troika's financial assistance programs reduce systemic risk? Evidence from Eurozone countries

Authors: Konstantinos A. Moutsianas; Kyriaki Kosmidou

Addresses: Department of Economics, Division of Business Administration, Aristotle University of Thessaloniki, Greece ' Department of Economics, Division of Business Administration, Aristotle University of Thessaloniki, Greece

Abstract: The European sovereign debt crisis has forced many countries in the Eurozone to request financial assistance from the European Central Bank (ECB) and the International Monetary Fund (IMF) to prevent the contagion of the crisis to national banking systems. In the framework of providing large-scale financial rescue packages, the Troika, a unique institutional construction that consists of the ECB, the IMF and the European Commission (EU), has developed economic policies in combination with economic adjustment programs that aim to reinforce financial stability and reduce systemic risk. Our research focuses on the estimation of systemic risk in the countries that have implemented the Troika's bailout programs. The main objective is the evaluation of systemic risk in Greece, Ireland, Portugal, Cyprus and Spain 'pre' and 'post' the Troika's financial rescue programs to examine whether the Troika's bailout programs reduce systemic risk and financial fragility.

Keywords: financial stability; systemic risk; value at risk; CVaR; conditional VaR; value at risk; financial assistance programmes; Eurozone countries; sovereign debt crisis; financial rescue packages; European Central Bank; ECB; International Monetary Fund; IMF; European Commission; economic policy; Greece; Ireland; Portugal; Cyprus; Spain; risk assessment; financial bailout.

DOI: 10.1504/IJBAAF.2016.10001421

International Journal of Banking, Accounting and Finance, 2016 Vol.7 No.2, pp.149 - 171

Received: 11 Jan 2016
Accepted: 03 Aug 2016

Published online: 18 Nov 2016 *

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