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The purpose of this paper is to examine Greek forest fires in August 2007 and statements about terrorism (pyro-terrorism) and the impact on Greek banks stocks.

Event study methodology and market model is used in this paper and data of all Greek bank stocks prices listed in Athens Stock Exchange are analysed, before and after 17 August 2007, which is when forest fires took place in Greece.

Total number of burned acres during a 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 started simultaneously 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 for terrorist attacks. The findings of event study methodology and market model show that CAARs were slightly negative but not statistically significant and during event date, and average abnormal return (AAR) was slightly positive at 0.0273 per cent. The event caused no influence on the stock market.

Results are important for banking system, compliance and regulatory authorities, justice system and politicians.

The impact of Greek forest fires in August 2007 on Greek banks stocks has not been examined so far.

Every year thousands of acres are burned and a number of people lose their lives in forest fires that increasingly surpass the wild land limit and lead on to touristic, urban areas. By and large, Mediterranean countries rely highly on offering a tourist product based on sea, sun, culture and nature. While the sea and sun are not affected by fire catastrophes, places of cultural and natural beauty are indeed hit; tourists end up being uninformed with no proper guidance from the firefighting authorities. This paper seeks to address these issues.

This paper attempts to highlight the relation between fire catastrophes and tourism development, to identify if and how state authorities take into account tourists in the planning and management of appropriate measures. A comparative study between Greece and Cyprus is presented. A number of interviews with stakeholders on the policy and operational level were conducted and the results and their implications are presented.

Planning and suppression is complicated with a number of actors involved in various stages; national tourism organizations in both countries do not take part in the information or planning process. There is an emerging need for the provision of useful, comprehensive, practical information aimed at tourists.

The findings of the paper are based in a number of interviews with key policy makers as well as key operational commanders. The participation of the above in the policy making as well as operational phase shows a number of limitations. This paper presents a qualitative approach to the subject. A follow‐up quantitative study is already planned.

Lessons learnt from previous catastrophes, in‐depth analysis of the existing “modus operandi” and “rules of engagement” should provide the necessary background for creating new risk‐based, comprehensive, focused communication campaigns.

Safer societies and lower impact on the environment are the main outcomes of a concerted communication campaign. Tourism represents and multiplies the image of the country as a whole to the world; a solution to the problem would offer added value.

The paper is based on a number of in‐depth interviews with actors that took part in the actual handling of the two major catastrophes in Cyprus and Greece. The outcome of the interviews is presented for the first time.