Economic Convergence and Divergence in Europe Growth and Regional Development in an Enlarged European Union
Growth and Regional Development in an Enlarged European Union
Edited by Gertrude Tumpel-Gugerell and Peter Mooslechner
Chapter 21: Financial system transition in Central Europe: the first decade
21. Financial system transition in Central Europe: the ﬁrst decade Thomas Reininger, Franz Schardax and Martin Summer 21.1. INTRODUCTION1 The Czech Republic, Hungary and Poland (referred to below as the CEEC-3) have undertaken substantial eﬀorts during the last decade to build a new ﬁnancial system under the constraints of their legacies from central planning and the initial conditions of the early phase of transformation. Since these countries are considered the most advanced group of transition economies, they form a natural focal point for the analysis of ﬁnancial system transformation. It is our aim to provide a broad picture of what this process has achieved during the ﬁrst ten years. The economic literature has frequently pointed out the importance of the ﬁnancial system’s role for the real economy. The ﬁnancial system has a key function in the allocation of resources by channelling funds from households to enterprises, it provides risk-sharing opportunities for households and ﬁrms, and it helps agents economize on transaction and information costs. A developed ﬁnancial system is therefore an important part of economic development in general. In our discussion we concentrate on three main aspects. First, we look at the banking sector. Second, we give an overview of the structure of funding for the private and public sector. Finally, we discuss the legal and supervisory environment. Our study uses various sources of data. We collected parts of the data ourselves. Some of the data are taken from oﬃcial publications, such as statistical reports of stock exchanges,...
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