Privileged Interfirm/Bank Relationships in Central Europe: Trigger or Trap for Corporate Governance?
32 Pages Posted: 6 Sep 2009 Last revised: 10 Feb 2011
Date Written: 1999
The paper focuses on the question whether banks and capital markets in Central Europe are capable of exerting a positive influence on enterprise performance at the present stage of the economic transformation. These markets are characterised by privileged, collaborative interfirm/interbank relationships demonstrated through various channels. Among them is the competition for private deposits between commercial and national banks that are simultaneously supervisors of commercial banks, as is the case in Poland. Other channels include: heavily indebted large banks that are owners of industrial companies (as is the case in Slovakia with the steel mill VSZ owning the third largest bank IRB), investment funds that are facilitating industrial restructuring, and foreign banks holding only minority stakes in large domestic financial institutions.
Keywords: Interfirm, bank relationship, Central Europe
JEL Classification: P34, O16, G21, G34
Suggested Citation: Suggested Citation