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

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.