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Banking behaviour and the Brazilian economy after the Real Plan: The post-Keynesian approch

Author

Listed:
  • Luiz-Fernando De Paula

    (University of the State of Rio de Janeiro. Rio de Janeiro (Brasil))

  • Antonio J. Alves

    (Rural Federai University of Rio de Janeiro. Rio de Janeiro (Brasil))

Abstract

This paper aims at analysing--from a Post Keynesian approach--the Brazilian bankingbehaviour in the current phase of the business cycle that is at the semi-stagnation state of the economy. According to the Post Keynesian approach, banks are economic agents that have liquidity preference determined strongly by their expectations under uncertainty, managing their portfolio according to the tradeoff between liquidity and profitability. We argue that banking behaviour in Brazil has been determined by the specific institutional-macroeconomic context of the current phase of the Brazilian economy, with banks taking advantage of the high rates of interest and the conditions in which government has managed its internal debt. But at the same time bankingstrategies are determinant of the current phase since portfolio allocation has been dominated by a short-termist behaviour and high liquidity preference that have resulted in low credit supply and high banking spread.

Suggested Citation

  • Luiz-Fernando De Paula & Antonio J. Alves, 2003. "Banking behaviour and the Brazilian economy after the Real Plan: The post-Keynesian approch," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 56(227), pages 337-365.
    • Handle: RePEc:psl:bnlqrr:2003:42
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    References listed on IDEAS

    as
    1. Paul Davidson & Jan Kregel (ed.), 1999. "Full Employment and Price Stability in a Global Economy," Books, Edward Elgar Publishing, number 1670, August.
    2. Tarsila Segalla Afanasieff & Priscilla Maria Villa Lhacer & Márcio I. Nakane, 2002. "The Determinants of Bank Interest Spread in Brazil," Money Affairs, CEMLA, vol. 0(2), pages 183-207, July-Dece.
    3. Márcio I. Nakane, 2001. "A Test of Competition in Brazilian Banking," Working Papers Series 12, Central Bank of Brazil, Research Department.
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    Cited by:

    1. Guilherme Jonas Costa da Silva & José Luís Oreiro & Luiz Fernando de Paula & Rogério Sobreira, 2007. "Macroeconomic Determinants Of Banking Spread In Brazil: An Empirical Evaluation," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 098, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    2. Philip Arestis & Fernando Ferrari-Filho & Luiz Fernando de Paula, 2011. "Inflation targeting in Brazil," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(2), pages 127-148.
    3. Leandro Coghi Bernardelli & Carlos Enrique Carrasco-Gutierrez, 2024. "Macroeconomic, industry-specific and bank-specific determinants of the profitability of Brazilian banks: dynamic panel evidence," Empirical Economics, Springer, vol. 67(2), pages 693-726, August.
    4. Philip Arestis & Luiz Fernando Paula & Fernando Ferrari-Filho, 2007. "Inflation Targeting in Emerging Countries: The Case of Brazil," Palgrave Macmillan Books, in: Philip Arestis & Alfredo Saad-Filho (ed.), Political Economy of Brazil, chapter 8, pages 116-140, Palgrave Macmillan.
    5. Sarah Sanya & Mr. Montfort Mlachila, 2010. "Post-Crisis Bank Behavior: Lessons From Mercosur," IMF Working Papers 2010/001, International Monetary Fund.
    6. Guilherme Jonas Costa da Silva & José Luís Oreiro & Luiz Fernando de Paula, 2007. "Macroeconomic Determinants of Bank Spread in Brazil: An Empirical Evaluation," Working Papers 0066, Universidade Federal do Paraná, Department of Economics.

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    Keywords

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    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • 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
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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