Eureka! Institutional Repository

For nearly a decade before the outbreak of the international economic crisis of 2008, Greek banks had been turning to consumer loans as a new market that would boost their earnings. They employed an aggressive promotional communication policy based chiefly on advertising, personal selling, promotional activities and direct marketing to persuade consumers to take out loans. This paper elaborates on the impact of communication policy of banks on the real economy and social prosperity of the Greek people drawing insights from secondary sources. The evidence shows that the high number of consumer loans made to households briefly increased bank earnings, boosted consumption and fuelled a temporary rise in personal prosperity. In the long term, however, the increase in consumer loans led to a worsening of the national economy, a decrease in social prosperity and a loss of cohesion in the social fabric. Interestingly, the banks themselves suffered from their own policy, namely the excessive promotion of consumer loans in Greek households