Monetary winds of change: Exploring the link between policy shifts and bank profitability in developed and emerging European markets

Raftis, Achilleas; Karpetis, Christos; Papadamou, Stephanos; Spyromitros, Eleftherios

doi:10.1016/j.gfj.2024.100932

Global Finance Journal

2024

DOI: 10.1016/j.gfj.2024.100932

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Monetary winds of change: Exploring the link between policy shifts and bank profitability in developed and emerging European markets

Achilleas Raftis,

Christos Karpetis,

Stephanos Papadamou

et al.

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Money talks, green walks: Does financial inclusion promote green sustainability in Africa?

Eshun,

Kočenda

2024

Global Finance Journal

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Money talks, green walks: Does financial inclusion promote green sustainability in Africa?

Eshun,

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2024

Global Finance Journal

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Analyzing the Determinants of Banking Profitability in European Commercial Banks: Do COVID-19 Economic Support Measures Matter?

Blaga,

Dumitrescu,

Duca

et al. 2024

Sustainability

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In this paper, we rely on a comprehensive dataset of European commercial banks from the ORBIS Database spanning from 2014 to 2022 and use an unconditional quantile regression to investigate the driving factors of profitability. By controlling for several bank-related factors, we aim to capture the influence of economic support measures on banking profitability as measured by the ROA. The major finding of the paper brings to light the negative impact of economic support measures on bank profitability, especially for banks associated with the lower and middle quantiles of the distribution of the ROA. This suggests that while government interventions are essential during economic downturns such as the COVID-19 pandemic, their impact on banking sector productivity is more complex. Indeed, when the government provides more intensive economic support in the form of direct subsidies, grants, or tax exemptions, it reduces the immediate dependence of economic agents on bank loans. If these entities receive funds directly from the government, their propensity to borrow from banks drastically decreases, resulting in a reduction in their interest income and other financial services.

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Monetary winds of change: Exploring the link between policy shifts and bank profitability in developed and emerging European markets

Cited by 2 publications

References 54 publications

Money talks, green walks: Does financial inclusion promote green sustainability in Africa?

Money talks, green walks: Does financial inclusion promote green sustainability in Africa?

Analyzing the Determinants of Banking Profitability in European Commercial Banks: Do COVID-19 Economic Support Measures Matter?

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