Behavior of cooperative banking in Portugal: the resilience of Crédito Agrícola in the 2007-2018 period

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Artur Faria
https://orcid.org/0000-0003-3918-8154
Luis Pacheco
https://orcid.org/0000-0002-9066-6441

Abstract

The financial system is a fundamental pillar in the efficient functioning of credit to the economy. The financial crisis had an impact on the entire financial system, making it clear that the banking sector in general must necessarily undergo a process of change in strategy, namely in the moderate granting of credit. Through a comparative analysis of cooperative banking with other commercial banking, for the period 2007 to 2018, we conclude that, in Portugal, cooperative banking - represented by the Integrated System of Mutual Agricultural Credit - was more resilient to the economic and sovereign debt crisis, due to its conservative transformation ratio, which allowed it to achieve positive results and not to degrade its capital ratios. The application of the HEAT! and z-score methodologies shows that, in the most acute period of the crisis, Crédito Agrícola's indicators diverge favourably from those of other commercial banks, placing Crédito Agrícola as one of the banking institutions with the lowest risk of insolvency. Therefore, liquidity and long-term orientation, which are characteristics of cooperative banking, are essential for its stability and contribute to the financial soundness of the whole system.

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How to Cite
Faria, A., & Pacheco, L. (2022). Behavior of cooperative banking in Portugal: the resilience of Crédito Agrícola in the 2007-2018 period. E3 — Revista De Economia, Empresas E Empreendedores Na CPLP, 8(2), 107–134. https://doi.org/10.29073/e3.v8i2.609
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Articles
Author Biography

Luis Pacheco, Universidade Portucalense - Infante D. Henrique

PhD in Economics from the Technical University of Lisbon, MSc in Monetary and Financial Economics and a Degree in Economics. Is a University lecturer since 1994, with the responsibility of teaching at undergraduate and master degrees in the financial and economical area. In addition to the teaching activity at Universidade Portucalense, is responsible for two curricular units of the MSc in Economics and Management at the University of Aveiro and has taught courses in the area of finance in undergraduate courses or postgraduate courses at the Polytechnic Institute of Porto, ISVOUGA, UTAD and CESPU. It develops research activities in the financial - capital structure, markets and financial products, etc. - and tourism area - factors of satisfaction, hospitality, etc. – having published works in several national and international scientific journals.

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