Consequences of the greek economic crisis on the structure of the Greek banking system

The Greek banking market developed considerably after the accession of Greece to the Eurozone, which was reflected on the growth of number of banks, banking network and number of employees. The application of the austerity program in Greece had serious consequences on the Greek banking market. These consequences can be witnessed in the dramatic increase of non-performing loans, the reduction of banks operating in Greece due to mergers and acquisitions, bank bankruptcy and withdrawal of foreign banks. All these resulted in Greece having the most concentrated banking market in the Eurozone. The reduction of the number of banks operating in Greece led to the closing of bank branches and dismissal of employees. Nevertheless, some aggregates seem to benefit the remaining banks in Greece. The ratios of deposits per branch and employee and in particular the ratios of loans per branch and employee have a positive impact on the productivity of the banks.