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Factors contributing to Greece Financial crisis
Finance & Accounting
Pages 35 (8785 words)
Abstract Accountability for all the borrowed funds must be closely monitored and audited with directives to favour more loans to private, local entrepreneurs who have high-earning business proposals and whose ideas are found to be well founded. Although banks do no harm by tying up much funds with their Investment Banking activities, independent auditors accountable to the government should make all the business activities of banks transparent and open to public audit.
There was a wide margin of money supply circulated in the economy versus the available increases in money supply that remained in banks. Another major discovery was a wide gap between importations and exports. Imports exceeded exports by the billions of dollars each year. Yet the ECB, EU, and IMF did not recommend drastic reduction in the importations. Instead, these financial organizations recommended retrenchments of government employees. The budget defitis could have been drastically reduced by simply cutting down substantial imports of goods that people in Greece can readily produce. But the financial system needs reforms in the sense that entrepreneurs with feasible business projects should be given priority over Investment Banking activities of banks. This dissertation recommends further impartial investigation into the banking operations in terms of the loans or funding of businesses in order to eliminate the public’s doubt over the banking system of withholding substantial funds from the needed productivity of the country. Retrenchment of employees should be the last option in finding ways to fix the budget deficit annually. ...
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