Relevance of the EU Banking Sector to Economic Growth

Candida Ferreira

International Advances in Economic Research, 2017, vol. 23, issue 2, No 6, 203-215

Abstract: Abstract Using panel estimates and a sample including all 28 European Union (EU) countries, this paper seeks to improve upon the existing literature with empirical evidence on the role that banking institutions can play in promoting economic growth. Banking sector performance is proxied by relevant operational, capital, liquidity and asset quality financial ratios. Economic growth is represented by the annual gross domestic product (GDP) growth rate. The estimations take into account the recent international financial crisis and consider three panels: one for the time period 1998–2012, a second one for the years before the crisis (1998–2006) and another for the subinterval 2007–2012. The results allow us to draw conclusions not only about the importance of the various financial ratios to economic growth but also regarding reactions to the recent crisis.

Keywords: Bank performance; Economic growth; European Union; Financial crisis; Panel estimates (search for similar items in EconPapers)
JEL-codes: F30 F39 G20 O40 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11294-017-9632-1

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