Empirical Investigation of Loans Loss Provisions Through Accounting and Macroeconomic Factors : The Case of Greek Banking System

The aim of the present study is to investigate the loan portfolio quality of the Greek banking system. In our days, loan quality threatens the financial well-being and the soundness of banking institutions globally. However, Greece is under surveillance due to its severe ongoing sovereign debt crisis, affecting the stability of the economy. In this context, we examine possible accounting and macroeconomic determinants of loan quality by using quarterly data for the period 2001-2012. Aggregate loans loss provisions (LLP) are used as a proxy for measuring loan quality. The results indicate that both accounting and macroeconomic variables exert significant influence on loans loss provisions of Greek banking sector