Do current consolidation processes of globalized financial systems strengthen these systems or rather increase the level of systemic credit risk and thus may destabilize domestic and global economies in the future?
THE PROCESSES OF CAPITAL CONSOLIDATION AND CONCENTRATION AS DETERMINANTS OF DEVELOPMENT OF THE BANKING SYSTEM IN POLAND
In connection with the system and socio-economic transformation which was initiated in Poland since 1989, intensified globalization processes take place in various spheres of economy, including the field of banking. Financial institutions including commercial banks are the entities which face not only the processes of globalization but above all these processes co-create. The key attributes of globalization include deregulation processes, computerization and internationalization. Currently operating financial system in Poland, including the banking sector, is among the best ones to meet EU standards and simultaneously globalized sectors of the economy. The key date for this issue was 2004, where Poland made an accession to the European Union structures.
The distinctive characteristic of the banking system in Poland is the clear superiority of universal, classical deposit and loan banking with a slightly developed segment of specialized investment banking operating mainly in capital markets. Since investment banking is still developed in much narrow scope than in developed countries, it is generally accepted that in Poland there was no source of financial crisis, which began in the investment banking of highly developed countries in the autumn of 2008 [Kalinowski, Pronobis, 2015, p. 142]. On the other hand, the aforementioned global financial crisis also flowed to Poland, mainly in 2009, through globalized financial markets, trade and financial links. Under current, post-economic conditions, the process of globalization of the financial markets and the banking system in Poland is determined mainly by factors such as the administrative and supervisory functions of central banking and supervisory authorities in the financial system, as well as adaptation of legal norms to the standards of Western European high-developed countries [Zielińska-Głębocka, 2012, p. 159].
Economic globalization also usually involves other aspects of these globally progressing processes. In addition to the economic and financial determinants of globalization in banking systems, there are also social factors. These factors shape, among others, expectations of banks customers regarding the offer of financial services, which has become more and more dynamic due to technical and technological progress in the field of data transmission and use of the Internet for banking services and contact of customers with banks [Gwoździewicz, 2014, p. 74]. The special feature of the social determinants of globalization processes in banking systems is the unification and progressive increase in the standardization of analogous offers of banking products and financial services in different European countries as well as in other economically developed regions of the world [Prokopowicz, Dmowski, 2010, p. 193].
D. Prokopowicz, S. Gwoździewicz, The processes of capital consolidation and concentration as determinants of development of the banking system in Poland (in:) M. Oziębło (ed.) Management - new perspectives with the participation of e-technologies, "Entrepreneurship and management", tom XVIII, volume 10, part II, Publishing house Social Academy of Sciences, Łódź - Warsaw 2017, pp. 101-110. ISSN 2543-8190
Thank you very much for your comment and interesting scientific information. I invite people interested in the above issues to the discussion.
The issues of globalization of financial and banking systems are described in the publications:
https://www.researchgate.net/publication/323244562_Adjustment_of_Polish_banks_to_international_standards_as_a_factor_of_globalization_of_the_national_financial_system
https://www.researchgate.net/publication/320061057_THE_IMPORTANCE_OF_ECONOMIC_GLOBALIZATION_IN_THE_CONTEXT_OF_THE_DEVELOPMENT_OF_THE_FINANCIAL_SYSTEM_IN_POLAND
https://www.researchgate.net/publication/327201145_Social_and_economic_determinants_of_the_processes_of_economic_globalization_that_shape_the_development_of_the_banking_system_in_Poland
https://www.researchgate.net/publication/320074691_ADMINISTRATIVE_LEGAL_AND_SUPERVISORY_DETERMINANTS_OF_GLOBALIZATION_OF_FINANCIAL_MARKETS_AND_THE_BANKING_SYSTEM_IN_POLAND
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As a result of globalization processes, does the share of the SME sector in your country increase or decrease in the domestic economy?
The sector of micro enterprises and small and medium-sized enterprises, i.e. SMEs in contemporary economies of developed countries, usually has a particularly important role for the effective development of the national economy.
Usually about 90 percent. or more economic goods, income etc. is created in this sector. The share of this sector in the Gross National Product of the domestic economy is similar.
But this situation is not identical in every country. In addition, the growing importance of cross-border trade and capital transfer can change the importance of this sector in modern economies.
This is mainly due to the growing importance of supranational large corporations and financial institutions, including banks and investment funds.
These large industrial, service, commercial and financial corporations are a particularly important factor in contemporary globalization processes.
In view of the above, I would like to ask you: Does the share of the SME sector in your country increase or decrease in the domestic economy as a result of globalization processes?
Please, answer, comments. I invite you to the discussion.
Can current globalization processes increase the systemic risk of global economic and financial crises?
Yes. In my opinion, globalization is leading to the Integration of Business Cycles. In this way, globalization may deepen economic crises, including the global financial and debt crisis. An example was the global financial crisis, which appeared in mid-September 2008. At that time bankruptcy was announced by one of the largest investment banks in the world. As a result of unreliable credit risk management procedures, billions of USD of financial losses have been generated. It turned out that the unwritten rule no longer works, that "big can not fall". However, it is the emergence of ever larger international corporations and financial institutions that is one of the main determinants of the processes of economic globalization that have been progressing in recent years. these processes continue. Every few years, as a result of the merger of some of the largest financial institutions through mergers and acquisitions, more and more banks are formed. On the other hand, international operating industrial corporations move their factories from country to country, looking for cheaper workforce, and international trading and service corporations set up subsidiaries and sales outlets in other countries. Capital links grow transnational and thus systemic risk grows, whose sources can be related to the progressing economic globalization.
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The above discussion inspired me to the following considerations:
Is the importance of the psychology of financial markets and behavioral economics in the securities markets falling after the global financial crisis?
Are the investors operating in securities markets more cautious in making investment decisions after the global financial crisis, or are they more thoroughly analyzing the investment risk of investing in capital markets?
Has any of you conducted research aimed at identifying possible changes in the significance of the psychology of financial markets and behavioral economics in the capital markets, including securities markets after the global financial crisis of 2008?
If research shows that the importance of the psychology of financial markets and behavioral economics on the capital markets is decreasing, what is it mainly determined?
Is this the result of post-crisis higher awareness of investment risk among investors, or also changes in the structure of dominant segments of investors operating on capital markets, or is it also the result of the increase in the number of transactions conducted by computerized transaction systems?
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In addition, I note the interesting discussion inspired me to the following considerations:
Is the situation on the stock exchange markets really correlated with the macroeconomics of the entire economy?
In the long-term period, this correlation is significant. On the other hand, however, the importance of state intervention implemented through monetary policy pursued by the central banking and through the budgetary policy pursued by the ministerial bodies appointed for this purpose within the state administration is growing. The central banks in many countries, including the Federal Reserve Bank and the European Central Bank after the outbreak of the global financial crisis in the autumn of 2008, have applied particularly significant interventionist monetary policy. I researched this issue and published scientific publications on this topic.
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Analysis of the functioning of securities markets?
The study of the functioning of securities markets is particularly important in the context of the analysis of the effective functioning of modern economies. It is particularly important to limit the systemic investment risk and strengthen the instruments of financial supervisors to reduce the likelihood of further global financial crises.
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