Covid-19 impact on the profitability of the EU27 banking sector

Juhász Péter and Mammadov Tahir: Covid-19 impact on the profitability of the EU27 banking sector.

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Abstract

Due to COVID-19, economic activity decreased considerably all across Europe. Our paper reviews the various pandemic effects and changes in the European banking sector. Using a dataset merged from four different secondary databases, we created a panel of countryquarters with 513 items covering the period 2016 Q1 – 2020 Q3 including the effects of the first wave of the pandemic. Correlation analysis revealed that during the pandemic, the connectedness of the banking system to the macroeconomy increased, and that the open economies had a more stable banking system. Performance fluctuations on the national banking system level increased, and banking performance became more closely linked to quarterly GPD growth. Covid-19 had a significant adverse effect on the banking sector's profitability on top of the standard macroeconomic fallbacks. Data also underpin that the countries where citizens had stronger trust in their government (political system, legal system, police) suffered less due to the Covid-19 crisis than other EU27 members. High-trust EU27 countries lost less in GDP, import, export, and banking profitability during the first wave of the pandemic. However, this might be partly also a result of some cultural characteristics linked to geography.

Item Type: Conference or Workshop Item
Heading title: Economic development and economic policy responses
Journal or Publication Title: Proceedings of the European Union’s Contention in the Reshaping Global Economy
Date: 2022
ISBN: 978-963-306-852-6
Page Range: pp. 10-24
Language: English
Place of Publication: Szeged
Event Title: The European Union’s contention in the reshaping global economy (2022) (Szeged)
Related URLs: http://acta.bibl.u-szeged.hu/75064/
DOI: 10.14232/eucrge.2022.1
Uncontrolled Keywords: Gazdaságpolitika - Európai Unió, Világjárvány hatása, Európai Unió - pénzügy
Additional Information: Bibliogr.: 24. p. ; ill. ; összefoglalás angol nyelven
Subjects: 05. Social sciences
05. Social sciences > 05.02. Economics and business
Date Deposited: 2022. Mar. 29. 12:09
Last Modified: 2022. Nov. 08. 13:09
URI: http://acta.bibl.u-szeged.hu/id/eprint/75065

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