The Financial Crisis in Greek Banking Industry Dissertation

The Financial Crisis in Greek Banking Industry - Dissertation ExampleHowever, it is an important part of the dissertation because it makes a significant section in backing the researchers point of billet while providing current knowledge including solid findings in terms of theoretical and methodological contribution. It reviews the books, journal names, and magazines to give new interpretations to old sources. In the article written by Li and Xu (2002), it is stated that higher- hazard assets give higher returns in comparison to low-risk assets wish well treasury bills (see table1 below). It forms a basis for the decision of asset allocation and making an estimation of interest grade in financial markets (Haitao Li and Yuewu Xu, 2002). During the process of bidding demand for firms products and its value govern the financial premium of the firm. It is so because there is a direct correlation between net evaluate value and performance of the firm as it yields higher returns. This implies that the higher the value of the firm the higher premiums. Barberis, et al, (2001) held the view that higher volatility is recorded in the stock prices of a company when performance if its assets are not up to the standard. The entire margining industry came under pressure due to credit turmoil and subsequent decline in quality of global market which in turn prompted the intervention of the central banks particularly the IMF and the World Bank. This sector was adversely affected by the inherent weakness of the Greek economy that is a result of rising debt and deficits. However, improvements waste been noticed in the premiums paid because of the strong legal framework and improvements to the operational model. A akin(predicate) hatch finds that, as a way of increasing the economies of scale, merger and acquisitions were imminent. The risk in the assets can be minify by diversification of the assets. It also brings profitability and promotes growth besides improvin g the survival rate in similar future financial crises. According to Nenova (2006) desire of having effective control over the firm and then(prenominal) pressurize the shareholders to sell the firm at a lower price is the reason why banks overrate premium during the process of mergers and acquisitions. In addition to this, the value of the premium is also influenced by enforceability of ownership rights and self-assertion in the target banks ( LaPorta et al., 1998 Djankov et al., 2008 Nenova,2006 Bris and Cabolis,2008). As provided, the weaker the shareholder protection creates get-out for managers, shareholders to seize smaller, and minority shareholders with motives of gaining higher private benefits (Dyck and Zingales, 2004). A research study conducted by Hunter and Wall (1995) stated that acquirers are interested to pay more premiums for the banks that adopt strategies such as diversification for reducing combined firms overall risk and for the banks that would increase the value of the government safety net to the combined firm. With the help of regression analysis, it can be understood that a target with high variance of own profitability and high covariance with the acquirers profitability will yield less premium. Theory of diversification will also make the similar implication. MANNER OF PREMIUMS COMPUTATIONS a) An Informal Model of Bank Takeover Pricing During the process of valuation of a bank for merger and acquisition, several factors are considered by the bidder.