MULTINATIONAL BANKING IN THE TIMES OF CORONAVIRUS OUTBREAK: TRENDS AND CHALLENGES

ABSTRACT

The article provides an analysis of the changes that has recently occurred in the activities of multinational banks, taking into account the consequences of the coronavirus outbreak. Given the importance of multinational banks in many countries, understanding the scale and direction of these changes for the world economy has become essential. Over the last two decades we have been witnessing the following trends in multinational banking the credit strategies transformation - from aggressive into conservative;the rise of South-South banking;the shift toward alternative sources of funding;the dramatic increase in banks size;the expansion of Chinese banks;the strengthening position of fast-growing markets as multinational banks home countries and the growing importance of developing and emerging markets as multinational banks host countries;the geographic expansion and regionalization of their activities. Our findings show that the aforementioned trends are driven by the economic downturn in developed countries and the increasing economic importance of developing countries. On the basis of this finding we forecast a low likelihood that banks from developed countries will be active lenders in the nearest future. Banks from developing countries have much better financial positions, which increase their relative importance as foreign lenders, especially within their geographical region. It looks like the year 2020 will become a year of tipping points in the development of multinational banking. A decade after the 2008-2009 global economic crisis banking industry faces a new challenge, which seems to have influenced almost every sector of the world economy, - the coronavirus outbreak. Given the background, the consequences of the coronavirus outbreak on multinational banking should be carefully examined.