Banking and financial stability in Central Europe. Integrating transition economies into the European Union

Book abstract:

With the next enlargement of the European Union due to take place in 2004 this book, the outcome of a research project funded by the Phare/ACE programme, examines how the focus on the economic prerequisites for EU membership has affected the financial sector in the countries of Central Europe.

Following an introduction by the editors this work is organised over four parts. Issues concerning banking within the EU are covered in Part I which also gives an overview of the 'association agreements' reached between the EU and applicant countries. Regulatory and supervisory issues presented by the European Central Bank are also discussed. Part II examines the transition of the banking sector in three of the applicant countries - Czech Republic, Slovenia, and Hungary. Undercapitalisation and high level experience of bad debts are some of the several common problems explored. A range of policy issues and implications are examined in Part III . Financial crises and the spillover effect on the productive sector of the economy are discussed together with the developments in the banking sectors of Eastern and Central Europe. The editors return with Part IV, the conclusion, identifying three major themes: the role of the state; the presence of a number of healthy commercial banks; and the need for an effective domestic supervisory body operating within the context of the internationally agreed Basle rules.

The book will interest students, scholars and policy makers of economics, finance, law, political science, the sociology of economic life and European studies.

David Green is Professor of Economics and Pro Vice Chancellor at Thames Valley University.

Karl Petrick is Senior Lecturer in Economics at Leeds Metropolitan University.