Theoretical Foundations for Socio-Economic Benefits of the Banking System

Abstract

The banking system plays a pivotal role in ensuring sustainable socio-economic development by facilitating capital allocation, financial intermediation, risk management, and inclusive growth. Despite the rapid transformation of global financial markets, the theoretical foundations explaining the socio-economic benefits of banking institutions remain fragmented across monetary, institutional, and development economics. This study systematizes and integrates the key theoretical approaches that justify the socio-economic significance of the banking system. The findings provide a comprehensive theoretical framework that may guide policymakers in strengthening banking reforms and financial inclusion strategies in emerging economies.

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