Impact of External Shocks and Macroeconomic Instability on the Security and Profitability of the Cooperative Sector in Poland and the European Union Countries

Abstract

The beginning of the 21st century was a period of significant economic transformation, which changed the existing order of economic processes, thereby exerting a strong influence on the real economy, but also on the security and efficiency of the financial system. As a consequence of the 2007–2009 crisis, many credit institutions had to cover losses from insufficient capital and lost their solvency. Some of them underwent compulsory restructuring and, in some cases, nationalisation. The crisis caused by the COVID-19 pandemic and the geopolitical turmoil resulting from Russia’s attack on Ukraine had less severe consequences for the banking sector in Europe. Based on a review of the literature and other research, the article assesses the impact of these events on the safety and profitability of cooperative banks operating within selected banking groups in Europe. In this context, based on an analysis of statistical data, it is argued that the impact of external shocks on the cooperative sector was limited. As part of a case study, using the example of one of the Polish cooperative groups, shocks were identified which, however, did not have a negative impact on profitability and stability. A correlation was also demonstrated between the level of security of individual banks and the fact that they operate within the structure of the Institutional Protection System.

The purpose of the article. The purpose of this article is to indicate the impact of macroeconomic shocks on the security of cooperative banks operating in the European Union, as well as to examine the relationship between the level of integration of cooperative banking groups and the level of financial stability of individual cooperative banks.

Methodology. Literature review, statistical analysis, case study.

Results of the research. The high level of integration of cooperative banking groups in the European Union helps build resilience to external macroeconomic shocks.