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
Date Written: 1998
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: Suggested Citation