Banking sector amid Covid-19 and post-pandemic recovery

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In the first year of the project the researcher, first, carried out the analysis of an impact of financial system development on economic growth in Europe generally as well as during the main crises, including the Covid-19 pandemic. The results of the analysis showed that larger banking system in the European countries is generally related to lower growth. This negative relationship becomes especially strong at the time of the crisis, most prominently the pandemic and the global financial crisis. Highly developed, large banking system, thus, not only does not protect the countries from economic slowdowns and recessions but can even deepen the negaive impacts of negative shocks like pandemic or financial crisis.The above-mentioned research results were presented at the research workshop and need further development in the direction of cross-country differences as well as reasons that influence such a relationship between banking sector and growth.Second, the researcher has carried out literature review on the channels through which banking sector and bank lending might affect growth. Basing on the review, the analysis on the post-pandemic impact of banking sector on growth is to be carried out.