Analysis of Financial Crisis Results on Dry Bulk Market & Financing

Sambracos, Evangelos and Maniati, Marina (2015): Analysis of Financial Crisis Results on Dry Bulk Market & Financing.

Abstract

The maritime industry provides an efficient method of transporting large volumes of basic commodities and finished products, with more than one-third of all international seaborne trade consisting of dry bulk cargo. Historically, the period that preceded the global financial crisis was characterized by accelerated growth, which culminated with the historic high point in the dry bulk freight market recorded during the second quarter of 2008. However, since mid-2008, the dry bulk sector presents high volatility, reflecting both lower demand for maritime transport and increase of the expected capacity.Within this framework, commercial banks, being the main source of financing for the shipping market, which is characterised by high capital and operating costs, have significantly reduced the volume of loans granted in the industry. The latter is of particular importance considering the recent regulatory framework for banks apllied by the Basel III that limits the exposure of banks in sectors, like dry bulk shipping, that present high risk rate.

• Item Type: MPRA Paper
• Language: English
• Keywords: Finance, Shipping Market, Risks, Basel Accord(s)
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; G - Financial Economics > G1 - General Financial Markets > G15 - International Financial Markets; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R4 - Transportation Economics > R40 - General

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