THE PROCESS OF BANK CONCENTRATION AND CONSOLIDATION IN THE CENTRAL AND EASTERN-EUROPEAN COUNTRIES

Copil Crina Angela ()
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Copil Crina Angela: UNIVERSITATEA DIN ORADEA, 0

Annals of Faculty of Economics, 2015, vol. 1, issue 2, 198-206

Abstract: In this paper I proposed to accomplish an analysis of the process of bank concentration and consolidation in some countries from the European Union: Poland, Hungary, Czech Republic and Slovakia. These countries from Central and eastern Europe, that, the same as our country had at its basis the Soviet union model, based on a planned, centralized economy, without modern bank institutions, were submitted to a process of banking reform in a period characterized by an unstable macro-economic background, by a bank management without a discipline in the activity developed, by the increase of the portfolio of low performance credits. The objective followed on the entire paper is the underlying of the particularities of the process of bank concentration and consolidation in these countries, from the reform of the banking systems until the present. I approached the evolution of the process of bank concentration and consolidation in these countries because they are considered as having the most relevant transitions in Europe. Hungary was considered for a long time the country with the fastest economic increase. Slovakia, with approximately 90% foreign capital, is one of the few countries from Europe that avoided the crisis from the bank sector, without government support, and Czech Republic and Poland are characterized by the increase of the number of banks, due to the amenity exercised on the foreign investors. The early reforms accomplished in countries as Poland or Hungary, generated much smaller costs than the reforms accomplished in Romania, Czech Republic or Slovakia where these reforms were postponed, and the expenses with the restructuring of the banks were much bigger. The privatization of the bank institutions proved to be the most successful strategy, because the taking over of the bank institutions by foreign investors is a valid premise for the creating of some competitive bank institutions. We can affirm, as Mihai Ilie affirmed, that the role of the banks in the period of transition to the market economy is very important because they are created in an “important link of the financial system whose performance will offer an efficient instrument of appreciating the condition of health of the economy in its ensemble” and the volume of the financial availabilities existent in circulation in an economy is a characteristic of the development of economy in is ensemble.

Keywords: concentration; consolidation; banking system; reform; transition; central and Eastern Europe (search for similar items in EconPapers)
JEL-codes: F65 G21 G34 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ora:journl:v:1:y:2015:i:2:p:198-206

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