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Prof. Dr. Virginia Zhelyazkova, Deputy Rector for Education activity and Quality at VUZF University and Head of the “Finance and Financial Management” Department at VUZF Lab, presented the Laboratory at the 10th International Conference for International Business, which took place in Thessaloniki ,21-25 May 2019 (https://www.icib.eu).

At the forum she presented the results of a research on the future of banking in the context of the circular economy, carried out by the team she was leading.

At the end of December 2015, the European Union (EU) declared for its priority the gradual transition from a linear to a circular economic model. Since then, work has started at EU-level to build a comprehensive concept of how this transition will be performed.

But what does the „circular economy“ mean and how it will affect the banks?

The idea of circular economy emerged in the second half of the 20th century, although the concept underlying it is very old. It implies that the objects already used must not be thrown away and contribute to pollution, but to be recycled and go back into new goods. Thereby, the circle of use of raw materials and elements will close and will gradually reach the state of wasteless economy.

Most leading countries in the world already recognize the need to make a transition from the linear to the circular economic model. Japan, Germany, China and the Netherlands stand out as leaders. However, the question remains how to perform the transition. The role of banks in this process will be major. This is especially true for Europe, where they are the leading source of financing for business and households.

The team is researching the major changes that will occur in the way businesses work and how in practice this will require redefinition of the business models of banks.