Portfolio allocation by Greek banks

Abstract

The purpose of this paper is to study the portfolio allocation decisions of Greek banks over the
Period 1955 to 1981. The theoretical approach used to derive the demand equations for bank assets is
based on a modified version of the Dynamic Generalized Linear Expenditure System. This procedure
allows us to calculate both the wealth and interest rate elasticities. We conclude that the Greek banks are
relatively sensitive to changes in the various interest rates, with mortgages showing the highest owninterest
elasticity.