The Role of Banks for the Transition to Circular Economy

Virginia Ivanova Zhelyazkova

A chapter in Circular Economy - Recent Advances, New Perspectives and Applications from IntechOpen

Abstract: The financial system as a whole--in Europe the banks, in the USA mainly the stock exchanges--is oriented mainly towards financing the linear economy. It is the dominant economic model; the production cycles, hence the business cycles of the individual industries and products, are well known. This ensures relative predictability of the amount of expected profits they generate, and it gives the necessary degree of probability for the financial markets for the return on investment. In order for banks to provide the much-needed resource for the transformation of the linear economy into a circular one, they must undergo a major transformation. It is multi-layered and, of course, has many specific characteristics. As banks definitely play a dominant role in Europe\'s financing of the economy, the analysis in this paper will focus on them. Certain main trends will be presented, related to circular economy and directing to the future development of individual segments within their framework.

Keywords: circular economy; linear economy; environmental risk in lending; green bank; transformation (search for similar items in EconPapers)
JEL-codes: F63 O10 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ito:pchaps:218063

DOI: 10.5772/intechopen.94522

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