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The Greek Crisis: Tragedy or Opportunity - Case Study Example

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However, salvation lies in the fact that the bankers throughout the world should continue to support Greece in order to prevent any domino effect…

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The Greek Crisis: Tragedy or Opportunity

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Subject: Finance & Accounting
Type: Case Study
Level: Ph.D.
Pages: 1 (250 words)
Downloads: 12
Author: murazikmaci

Extract of sample "The Greek Crisis: Tragedy or Opportunity"

Financial Markets Market Sentiment of Greece Greece is going down, but it will not be alone, there are fears that the fall of Greece can hamper the entire global economic system. However, salvation lies in the fact that the bankers throughout the world should continue to support Greece in order to prevent any domino effect in the Global Economy. Analyzing Greece using CAMEL is a difficult task since it is one of the most volatile economies of the world. Capital Adequacy of Greece has improved after the IMF reform package and EU showing support to the economy.

However the probability of default on its debts is higher for Greece than other countries who can print their own money. Hence, investing is risk is not trouble free and Capital Adequacy holds a big question mark. Asset Quality of Greece is mediocre. Greece relies on tourism for most part of its revenue and hence it has all eggs in one basket. There’s too little diversification for the investors liking. Hence, Greece can never be a sure shot buy on the basis of its asset quality. Management of the economy is better than before.

The new government has shown some determination in resolving the issue and hence management of the economy can be rated as good if not great. However, Liquidity of Greek Bonds would be pretty low considering the nervous market sentiments of Greek Bonds and hence outside investor confidence would be low and secondary market trade for Greeks would also likely to be lower than other instruments.

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