Reininger, Thomas; Schardax, Franz; Summer, Martin --- "Financial system transition in Central Europe: the first decade" [2003] ELECD 27; in Tumpel-Gugerell, Gertrude; Mooslechner, Peter (eds), "Economic Convergence and Divergence in Europe" (Edward Elgar Publishing, 2003)

Book Title: Economic Convergence and Divergence in Europe

Editor(s): Tumpel-Gugerell, Gertrude; Mooslechner, Peter

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843762416

Section: Chapter 21

Section Title: Financial system transition in Central Europe: the first decade

Author(s): Reininger, Thomas; Schardax, Franz; Summer, Martin

Number of pages: 29

Extract:

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 transfor-
mation. 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 house-
holds and firms, and it helps agents economize on transaction and infor-
mation 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 supervi-
sory 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 ...