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Optimal Banking and Other Financial Business for the Economic Growth of Serbia

Author

Listed:
  • Nenad Milojević

    () (Belgrade banking academy - Faculty for banking, insurance & finance)

Abstract

The analysis of the banking / financial business impact on economic growth is a topic present in the world economy for centuries. In recent years, this topic has gained on importance in international economic circles. Actuality of the aforementioned impact particularly sparked the global economic crisis. In the focus of this paper is the impact of the level and speed of the financial development, particularly banking, on the economic growth in Serbia. Within the overall financial development, the focus is primarily dedicated to the banking business, which is still highly dominant segment of the financial sector in Serbia. We have conducted an analysis of the most important elements that have marked recent years` banking impact on the economic growth in Serbia. Actual characteristics of the aforementioned impact are also presented. Possible predictions of the banking / financial business movement in the future, as well as its impact on economic growth are presented in the paper. The focus is on determination of the optimal banking business volume for achieving sustainable economic growth in Serbia. The analysis presented in the paper indicate that there is significant potential for moderate and balanced growth of the banking / financial business in the medium term, which could make a significant contribution to the achievement of sustainable economic growth in Serbia, while providing financial stability. However, for the realization of this important and demanding goal, it is necessary to meet a significant number of factors and creation of the adequate conditions at the micro and macro level, essential for achieving the above mentioned aim.

Suggested Citation

  • Nenad Milojević, 2014. "Optimal Banking and Other Financial Business for the Economic Growth of Serbia," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 3(2), pages 61-83.
  • Handle: RePEc:cbk:journl:v:3:y:2014:i:2:p:61-83
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    File URL: http://www.cbcg.me/repec/cbk/journl/vol3no2-4.pdf
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    References listed on IDEAS

    as
    1. Beck, Thorsten & Demirguc-Kunt, Asli & Maksimovic, Vojislav, 2004. "Bank Competition and Access to Finance: International Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(3), pages 627-648, June.
    2. Robert G. King & Ross Levine, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 717-737.
    3. Masten, Arjana Brezigar & Coricelli, Fabrizio & Masten, Igor, 2008. "Non-linear growth effects of financial development: Does financial integration matter?," Journal of International Money and Finance, Elsevier, vol. 27(2), pages 295-313, March.
    4. Merja Festiæ & Jani Bekõ, 2008. "The Banking Sector and Macroeconomic Performance in Central European Economies," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 58(03-04), pages 131-151, May.
    5. Stephen Cecchetti & Enisse Kharroubi, 2012. "Reassessing the impact of finance on growth," BIS Working Papers 381, Bank for International Settlements.
    6. Beck, Thorsten & Levine, Ross & Loayza, Norman, 2000. "Finance and the sources of growth," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 261-300.
    7. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Banking Business; Financial Sector; Economic Growth; World Economic Crises;

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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