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Transnational banks’ influence on the development of the economy and the financial sector of developing countries (on the example of Poland, Brazil, Turkey)

2018; Sumy State University; Issue: 3 Linguagem: Inglês

10.21272/mmi.2018.3-22

2227-6718

Alvaro Justiniano L. Fernandes,

Banking, Crisis Management, COVID-19 Impact

The main purpose of transnational banks is to mobilize and redistribute funds in such a way as to maximize profits.The foreign economic activity of TNB is a generating factor for the expansion and development of globalization processes, the economic ties of most countries in the world.The increasing importance of TNBs in the world economy is explained by the consolidation of banking and industrial capital, which is an important trend in modern economic relations (TNB accumulate financial resources from the most convenient and beneficial sources, transforming them into those spheres, where their implementation will be the most profitable).If previously TNBs were issuing loans, mainly on foreign trade transactions of the economic entities, now at the present stage of development they are crediting any operations of their clients.The main purpose of the article is to identify the impact of TNBs on the economic and financial sector development of the developing countries by constructing the regression models and analyzing their results.According to the stated task, there is an econometric model of the TNB impact evaluation on the development of the economy and financial sector in Poland, Brasil and Turkey, which were included to the list of "Top-20 emerging economies".The dependent variable of the regression equation, GDP per capita was chosen as an indicator of economic development of these countries.The independent variables included a share of assets of foreign banks in the country's total banking system, the share of foreign banks in their total number, correlation of the credits, given in the private sector to the GDP and ratio of deposit to GDP.The list of independent variables includes also the capitalization level of the stock market for Poland and Brazil.The study period was 21 years, from 1995 to 2015.Poland is characterized by the fact that the country's economy is the most influenced by such indicators as the share of assets of foreign banks in total banking assets of Poland, as well as the proportion of foreign banks among the total number of banks.The author points out the high level of the banking sector internationalization in Poland that relates to measures, approved by the country's government, to stabilize the state's economy and to attract foreign investors.For Brazil and Turkey, loans and deposits relative to GDP have the greatest impact on the development of their economies.In Brazil, with an increase in the volume of loans issued, there was a reduction in household incomes.So in the country, the majority of the population has the overdue loans, moreover, GDP per capita also has had a downward trend since 2011.For the Turkish economy, the increase of the given credits and deposits quantity leads to the increase of the inhabitants' incomes in the country.Besides, only for this country, the impact of TNB on the financial sector is statistically significant.