Trends of banking sector development under the conditions of globalization

Abstract

Researchers often describe globalisation in different terms, attributing social, economic, political, and other aspects to this concept. Nevertheless, it is commonly acknowledged that globalisation is an integral part of the economy that can have both positive and negative qualities. Since banks are an integral part of the financial market as well as that of the economy, it is important to stress the effect of globalisation on banking institutions. The main ones are fund attraction, mergers, and technological advancement. However, threats are also noted, which are identified with respect to banks as currency or financial crisis. The KOF globalisation index is recognised around the world and widely used. This measurement includes three areas: social, economic, and political. Noting that banking development under the conditions of globalisation can have a negative impact on banking activity, the finance sector, and, finally, the economy of the whole country, it is important to control the potential risks. Due to this reason, the Nordic-Baltic countries (NB8) signed a cooperation agreement, under which experts of all these countries discuss various topics and create potential action plans to tackle the arising problems. The main goal of the paper is to identify the criteria that influence bank development and assess emerging trends.