Seven Years of Financial Market Reform in Central Europe

SUERF Studies No. 3, pp. 54-95, 1998

23 Pages Posted: 1 May 2009 Last revised: 10 Feb 2011

See all articles by Gerhard Fink

Gerhard Fink

Dept of International Business and Trade

Peter R. Haiss

WU Vienna University of Economics and Business; UniCredit Bank Austria; IES Vienna - Institute for the International Education of Students

Date Written: 1998

Abstract

After seven years of transformation it is getting more and more difficult to blame the communist heritage for the state of the financial markets in the ten Central European countries which are candidates for EU membership. Only Hungary and Estonia have made sufficient progress in financial market reform. The financial sector mostly is neither sound nor strong enough to exercise effective corporate governance. Since the necessary reform steps are well known, but only hesitantly implemented by governments and parliaments the authors come to the conclusion, that influential stakeholders (politicians, insiders and industry clusters) are not strongly interested in prudent banking. Direct gains from non-prudent banking accrue mostly to insiders which are politically strong enough to delay efficient implementation of the rules prevailing in EU countries.

Keywords: Corporate governance, Financial sector, Central and East European Countries (CEECs), Banking, Stakeholder, Stock Exchange

JEL Classification: G21, G28, P34, P43, P52

Suggested Citation

Fink, Gerhard and Haiss, Peter R., Seven Years of Financial Market Reform in Central Europe (1998). SUERF Studies No. 3, pp. 54-95, 1998 , Available at SSRN: https://ssrn.com/abstract=1392636 or http://dx.doi.org/10.2139/ssrn.1392636

Gerhard Fink

Dept of International Business and Trade ( email )

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Peter R. Haiss (Contact Author)

WU Vienna University of Economics and Business ( email )

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