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European Economic Integration and South-East Europe

European Economic Integration and South-East Europe

Challenges and Prospects

Edited by Klaus Liebscher, Josef Christl, Peter Mooslechner and Doris Ritzberger-Grünwald

With both transition dynamics and the EU integration process having shifted to the south-east of Europe, a region fairly marginalized in the literature, this book fills a gap by taking stock of where South-East Europe’s economies and institutions stood in 2004. The authors evaluate the potential for investment and growth within the South-East European region, including the role of trade and FDI, and discuss the challenges associated with unemployment, poverty and ‘brain drain’. The book also provides insights into the particular monetary and exchange rate policies applied, including cases of ‘euroization’, and finally makes an assessment, against this background, of the European perspective of the countries of South-East Europe.

Chapter 23: Banking in South-East Europe: status quo and the way forward

Norbert Walter

Subjects: economics and finance, regional economics, urban and regional studies, regional economics


Norbert Walter 1. BANKING IN SOUTH-EAST EUROPE (SEE) The banking sectors of the South-East European countries have made remarkable progress in the last couple of years. However, they still have quite a long way to go to match their counterparts in the euro area in terms of efficiency. To start off, I will sketch some important lines of development. It is useful at the outset to compare the banking sector in SEE with that in the rest of Europe. Some tables will show in which aspects SEE has closed the gap with former EU countries and in which fields reforms are required. After the description of the banking sector, I will argue why it is important for an economy to have sound financial markets. For the transition economies in SEE, especially, it is very important to move forward in creating a mature banking sector to nurture the process toward economic prosperity. Before closing with an outlook for the banking sector in SEE, I will describe Romania in somewhat greater detail as a good example of a banking sector evolving amid the changes from a centrally planned economy to a market economy. I am sure that the fast and substantive changes in the banking sector and in financial market regulation, not only in Romania but in all of SEE, will continue in the next few years. 2. DESCRIPTION OF THE BANKING SECTOR IN SOUTH-EAST EUROPE 2.1 Banking Sectors are Still Relatively Small The banking sectors in the South-East European economies...

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