Banking sector's development and economic sustainability

Abstract

This paper examines the relationship between banking sector’s development and economic sustainability. The analysis of the empirical studies of the banking sector’s impact on the economic sustainability have showed that the banking activity precedes and predicts the economic growth, however, the question concerning the direction of causality remains open, since unobserved variables may drive both developments. Analysis of the banking sector’s development stands at the core of economic sustainability topic. Issues tackled within the research field could be attributed to two broadly taken topics. The first one is related to empirical study and theoretical survey of the banking possible effect on economic development. The second field is to be concentrated on the quantitative analysis and elaboration of the most influential banking factors impacting the economic sustainability. The research is based on critical review of scientific literature, inductive and deductive research approaches and statistical methods.