Authors: CHRYSANTHI BALOMENOU, ANTONIOS LIAKOS

Title: THE IMPACT OF THE DEMOGRAPHIC ΑGING OF ΤΗΕ GREEK POPULATION ON THE DOMESTIC BANKING SYSTEM LIQUIDITY

Abstract

This paper examines the implications to the domestic banking system liquidity caused by the rapid demographic aging of the population in Greece. The theoretical framework of research is based on the Life Cycle Hypothesis (Modigliani & Ando, 1963) and the empirical approach is developed by the method of multiple linear regressions on simple time series and panel data, starting from 1998 and reaching up to 2016. In addition, a comparative analysis between the results of the Greek economy and the corresponding figures of the eurozone countries is applied, taking into account the impact of the global economic crisis of the year 2008. The statistical survey findings are mixed, showing that aging may affect the banking system of a country in conjunction with its own specific features. In particular, in countries where demographic aging is acute or coexists with low productivity and competitiveness, such as Greece and other Southern European countries, the liquidity of the banking system is seriously affected. Whereas, in countries where aging progresses smoothly or in countries where there is a strong demographic aging with simultaneous presence of high productivity and competitiveness indicators, the pressures on the banking system liquidity are weak.