Macroeconomic Perspectives in Banking: A Systematic Review and Conceptual Framework

Abstract

The banking sector in an economy is one of the most important components of the financial system. It is not only affected by its own actions and industry dynamics, but also heavily relies on the macroeconomic aspects for successful management and operations. This study aims to investigate the macroeconomic facets of banking, illuminating the complex relationships that exist between banking management, macroeconomic indicators and economic stability. To this end, this article focuses on developing a conceptual framework, incorporating all elements that affect the management of banking operations in any country, through a structured examination of the literature. Two hundred seventy-eight articles, extracted from the Scopus database, were scrutinized and reviewed for understanding the literature and illustrating a conceptual framework. The framework draws on three aspects, that is, the macroeconomic determinants of bank outcomes, the short-term outcomes on banking operations, and the long-term outcomes. The study also highlights emerging areas of research which have scope for further exploration. It contributes to a deeper understanding of the macroeconomic perspectives of banking, and the findings hold significance for policymakers, financial institutions, and other stakeholders.