THE ROLE OF BANKING INSTITUTIONS AND THE IMPACT OF BANKING CONCENTRATION ON THE BRAZILIAN ECONOMY FROM 2011-2019

Authors

DOI:

https://doi.org/10.61673/ren.2024.1579

Keywords:

Banking sector, Post-Keynesian Theory, Banking concentration

Abstract

This article aims to present the active role of banking institutions in the economy in the light of Post-Keynesian Theory and bring this theoretical framework closer to the study of the impact of banking concentration on the granting of credit to economic agents. To this end, the elements “creation of endogenous bank money” and the “finance-investment-savings-funding circuit” will be used to explain the banking sector’s ability to accelerate economic growth and, aiming to explain banks as agents of instability, H. Minsky’s “financial fragility hypothesis” will be used. Furthermore, through Ordinary Least Squares Methods (OLS) an empirical study will be carried out for the Brazilian economy from 03/2011 to 12/2019 with data obtained from the Central Bank of Brazil, with the objective of investigating the impact of banking concentration on credit offer. This exercise relates the Volume of credit with the Banking Spread variables (representing the institutions' preference for liquidity), the Herfindahl-Hirschman Concentration Index (IHH) and the crisis dummy variable that began at the beginning of 2014 in Brazil. The results obtained report: banking institutions play an active role in the economy and that banking concentration has a negative impact on the granting of credit.

Author Biographies

Iuri Everson Silva Monteiro, Federal University of Pará

Economist. Master's student in Regional Economic Development at the Federal University of Pará. R. Augusto Corrêa, 01 - Guamá, Belém - PA, 66075-110. iurieverson@gmail.com

Hilder André Bezerra Farias, Federal University of Pará

Economist. PhD in Regional Economic Development from the Federal University of Pará. Professor of the Postgraduate Program in Economics at the Federal University of Pará. hilder033@gmail.com

Published

2024-10-31

How to Cite

Monteiro, I. E. S., & Farias, H. A. B. (2024). THE ROLE OF BANKING INSTITUTIONS AND THE IMPACT OF BANKING CONCENTRATION ON THE BRAZILIAN ECONOMY FROM 2011-2019. Revista Econômica Do Nordeste, 55(4), 86–106. https://doi.org/10.61673/ren.2024.1579

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Artigos