Financial Cooperatives and Commercial Banks Differences before and after the 2014–2016 Brazilian Economic Crisis

18 Pages Posted: 2 Aug 2021

See all articles by Ederaldo Lima

Ederaldo Lima

Fucape Business School

Aziz Beiruth

Independent

Antonio Lopo Martinez

University of Coimbra; University of Salamanca

Date Written: July 29, 2021

Abstract

The present research aims to evaluate the performance of cooperatives and commercial banks, emphasizing the before and after the Brazilian economic crisis of 2015 and 2016. The worsening of the fiscal and monetary situation led to the impeachment of the Brazilian President of the Republic on May 12, 2016, which generated even more uncertainty and instability in the financial market, creating an effect like a 2008 global financial crisis. In this context, the objective of this work is to evaluate changes in the performance of cooperatives and commercial banks and presenting the consequence of the Brazilian crisis to these financial institutions. The main scope of the study was how cooperatives and banks fared in the face of the situation, especially on the indicators of net loans and derivatives. The methodology will identify the difference between this type of institution using panel data methods with fixed and random effect models, tested using the Hausmann test to see which one best fits the data scenario. The results point out the worse performance of cooperatives than commercial banks in the crisis period of 2015/2016 and over 2011-2020. The cooperatives usually established to provide financial support to small businesses and farmers have suffered significantly more than commercial banks; nevertheless, all suffer.

Keywords: cooperative banks, commercial banks, economic crisis, financial indicators.

JEL Classification: G1

Suggested Citation

Lima, Ederaldo and Beiruth, Aziz and Martinez, Antonio Lopo and Martinez, Antonio Lopo, Financial Cooperatives and Commercial Banks Differences before and after the 2014–2016 Brazilian Economic Crisis (July 29, 2021). Available at SSRN: https://ssrn.com/abstract=3895987 or http://dx.doi.org/10.2139/ssrn.3895987

Ederaldo Lima

Fucape Business School ( email )

Brazil

Aziz Beiruth

Independent ( email )

Antonio Lopo Martinez (Contact Author)

University of Coimbra ( email )

Pátio das Escolas
Coimbra
Portugal

University of Salamanca ( email )

Campus Miguel de Unamuno
Salamanca, Salamanca 23007
Spain

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