The financial system consists without doubt one of the most important determinants of the world national economies. The changes and challenges that the financial institutions face have a great impact on the economic growth prospects of a country and the configuration of the economic environment of each domestic economy. A healthy economy needs a stable financial system in order to convey capitals from the surplus economic bodies to the deficits ones in order funds to be invested in the productive process. The structure and the function of the financial sector differentiate from country to country widening the range of various possible forms that financial institutions could have. However, banking sector within any economy is the major source for economic growth and trustee of financial stability. The banking sector goes at the very heart of the financial system and its influence in national economies is pivotal, because available funds are filtered through it to the economy for investment purposes – with the challenge being – in the most effective way. The purpose of the current paper is to investigate the extent to which the implementation of International Financial Reporting Standards (IFRS) accompanied by Corporate Governance
practices have affected the quality of financial and narrative reporting produced by Greek banks for the period from 2008 to 2011. The study uses a sample of 14 commercial Greek banks and investigates their repots and performance for a period that includes not only the burst of global financial crisis, but also the start of the Greek sovereign debt crisis.
The rationale for the study is to make inferences regarding the quality of reporting and whether the IFRS and Corporate Governance practices offered quality information to stakeholders. The originality of the study lies at the fact that it uses the case of Greece for a period that incorporates both the burst of global financial crisis and the beginning of the Greek sovereign debt crisis. Also, the banking sector suffered from severe pressure the most during the period of 2008-2011 due to its interrelationship with the financial and debt crisis. In addition to the above, we explore the influence of IFRS to provide quality information to stakeholders through published reports. Moreover, we test whether corporate governance practices adopted by banks could contribute either alone or in conjunction with the adoption of IFRS to the improvement in quality of information provided through the published statements.
Keywords: International Financial Reporting Standards, Corporate Governance, Reporting Quality, Banking, Crisis.