Economic Convergence and Divergence in Europe
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Economic Convergence and Divergence in Europe

Growth and Regional Development in an Enlarged European Union

Edited by Gertrude Tumpel-Gugerell and Peter Mooslechner

This highly topical book addresses the challenge of economic convergence within Europe, beginning with a thorough review of the theory of growth and related empirical research. Historical and more recent economic developments within the present EU and current accession countries are discussed, along with the design for the process of further integration of accession countries into the EU and the Euro area. Moreover, the potential to achieve a sustainable catch-up process in Western Balkan countries, the Ukraine and Russia is explored, focusing on the task facing the EU in designing proper policies vis-à-vis these countries. The contributors’ varied perspectives ensure that the theories and policies postulated are linked closely with the actual situation in accession countries and offer up-to-date insights.
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Chapter 21: Financial system transition in Central Europe: the first decade

Thomas Reininger, Franz Schardax and Martin Summer


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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