Banking in Transition Countries
34 Pages Posted: 29 Mar 2014
There are 2 versions of this paper
Banking in Transition Countries
Banking in Transition Countries
Date Written: March 18, 2014
Abstract
Modern banking institutions were virtually non-existent in the planned economies of central Europe and the former Soviet Union. In the early transition period, banking sectors began to develop during several years of macroeconomic decline and turbulence accompanied by repeated bank crises. However, governments in many transition countries learned from these tumultuous experiences and eventually dealt successfully with the accumulated bad loans and lack of strong bank regulation. In addition, rapid progress in bank privatization and consolidation took place in the late 1990s and early 2000s, usually with the participation of foreign banks. By the mid 2000s the banking sectors in many transition countries were dominated by foreign owners and were able to provide a wide range of services. Credit growth resumed, sometimes too rapidly, particularly in the form of lending to households. The global financial crisis put transition banking to test. Countries that had expanded credit rapidly were vulnerable to the macroeconomic shock and there was considerable concern that foreign owners would reduce their funding to transition country subsidiaries. However, the banking sectors turned out to be resilient, a strong indication of the rapid progress in institutional development and regulatory capabilities in the transition countries.
Keywords: transition banking, bank privatization, foreign banks, bank regulation, credit growth
JEL Classification: G21, P27, O57
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Bank Governance, Regulation, and Risk Taking
By Luc Laeven and Ross Levine
-
Bank Governance, Regulation, and Risk Taking
By Luc Laeven and Ross Levine
-
Bank CEO Incentives and the Credit Crisis
By Rüdiger Fahlenbrach and René M. Stulz
-
Bank CEO Incentives and the Credit Crisis
By Rüdiger Fahlenbrach and René M. Stulz
-
By Andrea Beltratti and René M. Stulz
-
By Andrea Beltratti and René M. Stulz
-
The Credit Crisis Around the Globe: Why Did Some Banks Perform Better?
By Andrea Beltratti and René M. Stulz
-
Corporate Governance Lessons from the Financial Crisis
By Hector J. Lehuede, Grant Kirkpatrick, ...
-
The Wages of Failure: Executive Compensation at Bear Stearns and Lehman 2000-2008
By Lucian A. Bebchuk, Alma Cohen, ...
-
The 2007 Meltdown in Structured Securitization: Searching for Lessons not Scapegoats
By Gerard Caprio, Asli Demirgüç-kunt, ...