Pyro terrorism in Greece? Greek forest fires August 2007 and the impact on Greek banks stocks
| Date | 08 May 2018 |
| Pages | 163-170 |
| DOI | https://doi.org/10.1108/JMLC-04-2017-0014 |
| Published date | 08 May 2018 |
| Author | Spyridon Repousis |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
Pyro terrorism in Greece? Greek
forest fires August 2007 and the
impact on Greek banks stocks
Spyridon Repousis
University of Nicosia, Patras, Greece
Abstract
Purpose –The purpose of this paperis to examine Greek forest fires in August 2007 and statements about
terrorism(pyro-terrorism) and the impact on Greek banks stocks.
Design/methodology/approach –Event study methodology and market model is used in this paper
and data of all Greek bank stocks prices listed in Athens Stock Exchangeare analysed, before and after 17
August 2007,which is when forest fires took place in Greece.
Findings –Total number of burned acres duringa seven-year period, 2000-2006, was 2,530,883, and during
only August 2007, burned acres accounted to 2,059,615. The former Minister for Public Order, Vyron
Polydoras,stated the fires may be a result of terrorist attacks, as many of the fires startedsimultaneously and
in places where an arsonist could not be seen. The Minister also stated that the country is facing an
asymmetric threat, a military term used forterrorist attacks. The findings of event study methodology and
market modelshow that CAARs were slightly negative but not statisticallysignificant and during event date,
and averageabnormal return (AAR) was slightly positiveat 0.0273 per cent. The event caused no influenceon
the stock market.
Practical implications –Results are important for banking system, compliance and regulatory
authorities,justice system and politicians.
Originality/value –The impact of Greek forest fires in August 2007 on Greek banks stockshas not been
examinedso far.
Keywords Greece, Terrorism, Banks, Event study, Stocks, Pyro-terrorism
Paper type Research paper
1. Introduction
Fire has been used as a meanof protest against ruling powers across the world forhundreds
of years. Several states have had to cope with pyro-terrorism aimed at their forest systems.
This method of attack –the ignition of forest fires –harms a valuable naturalresource and
threatens human populationand infrastructure (Deshpande, 2009).
Pyro-terrorism is a kind of eco-terrorism or environmental terrorism. Forest and bush
fires may become a preferredweapon of choice due to the extent of damages versus low cost
and risk of the perpetratorsbeing caught.
Every year thousands of acres isburned and a number of people lose their lives in forest
fires that increasingly surpass the wild land and lead on to touristic and urban areas,
emerging a need for the provision of useful, comprehensive, practical information aimed at
tourists in Greece and Cyprus (Boustras and Boukas, 2013). The 2007 summer wildfires
have been recorded as the worst natural disasterin contemporary Greek history (Hovardas,
2015).
Political and other social events usually have a major influence on financial markets,
because markets respond to new information and investors may revise their expectations,
hopes and investment strategies.
Pyro terrorism
in Greece?
163
Journalof Money Laundering
Control
Vol.21 No. 2, 2018
pp. 163-170
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-04-2017-0014
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