Restructuring and Development of the Banking Sector in Poland. Lessons to be Learnt by Less Advanced Transition Countries

The banking sector in transition economies deserves a special attention of policy makers and the public. The first reason for this attention is that financial intermediation plays a special role in an economy: it channels financial savings of enterprises and households into investments. There is no economic growth in a country if this function is not executed in an effective and efficient way, and if the financial sector is not credible. Therefore reestablishment of a sound banking sector has been crucially important for transition countries. The second general reason is that banks are enterprises of a unique character due to the fact that their performance is important not only to shareholders, as it is the case for enterprises in all other economic sectors, but also to depositors. For that reason the public trust is essential for banking. While its creation is a long and comprehensive process, it is very easy to destroy it. The third reason, specific for transition economies, is connected with the very bad starting point. Under the communism allocation of funds by banks was carried out by outside orders and not by inside business decisions based on profitability and risk assessment. Therefore, at the start up of transition, in the sector of then state-owned banks there was neither know-how and business culture nor internal governance structures relevant for market economies. At the same time the banking sector was the terrain where the biggest change of culture and behavior was necessary in order to build its credibility. This fact made the task difficult and complex. The forth reason is that development of the banking sector in transition economies depends on both macroeconomic policy and microeconomic restructuring of enterprises. That is why it cannot be analyzed in isolation.transition economy, banking sector, central bank, commercial bank, bank privatization, entry, bank rehabilitation, bankruptcy, prudency, banking supervision

Fiscal Policy in Poland under Transition

Based on statistics provided by the Ministry of Finance and Central Statistical Office, the paper provides an analyses of the economic transition experienced by Poland paying particular attention to the fiscal policy.Poland, Economic Transition, Fiscal Policy

Investment and Finance in De Novo Private Firms: Empiracal Results from the Czech Republic, Hungary and Poland

In this paper we use a survey of 281 Czech, Hungarian and Polish newly established small private firms in order to shed some light on the constrains these firms face in the credit market. The results of our survey show that imperfections in capital markets in Central European economies do not seem to actually inhibit the growth of Central European transition economies studied, but they provide quite a large amount of financing and do so from a remarkably early stage of the existence of firms. Financial intermediation works reasonably well as far as de novo private firms in the three Central European transition economies studied, but they provide quite a large amount of financing and do so from a remarkably early stage of the existence of firms. Financial intermediation works reasonably well as far as de novo private firms are concerned: loss-making de novo firms have a lower probability of getting credit than profitable ones. Banks protect themselves against the risk of a deteriorating pool of borrowers by requiring collateral for their loans. We do not find convincing evidence concerning the existence of adverse selection. Loss-making firms are not ready to pay higher interest rates than profitable firms and are not more likely to ask for credit than profitable firms.http://deepblue.lib.umich.edu/bitstream/2027.42/39622/3/wp236.pd

Währungspolitische Optionen für die ostmitteleuropäischen EU-Beitrittskandidaten

Mit ihrem Beitritt zur Europäischen Union (EU) verpflichten sich die EU-Beitrittskandidaten, an der Europäischen Währungsunion teilzunehmen und den Euro einzuführen, sobald sie die Konvergenzkriterien erfüllen. Bereits als EU-Mitglieder mit eigener Währung müssen sie ihre Wechselkurspolitik als Angelegenheit von gemeinschaftlichem Interesse betrachten, und sie sehen sich der Erwartung gegenübergestellt, am EWS II teilzunehmen. Vor diesem Hintergrund wird in diesem Beitrag untersucht, welche währungspolitischen Optionen für die Beitrittskandidaten prinzipiell bestehen. Besonderes Augenmerk wird darauf gerichtet, (i) dass es sich bei den Beitrittskandidaten im Vergleich zum Euroraum um relativ gering entwickelte Volkswirtschaften im Aufholprozess handelt und (ii) dass der Systemwechsel Finanzdienstleistungssektoren von unterschiedlicher Leistungsfähigkeit und mit länderspezifischen Charakteristika hervorgebracht hat. Dementsprechend differenziert sollten auch die Währungsbeziehungen zum Euroraum ausgestaltet werden. Abstract Joining EU the new members bind themselves to participate in the European Monetary Union and to introduce the Euro as soon as they fulfill the convergence criteria. As members of EU they are obliged already to consider their exchange rate policy a matter of common interest, and they face the expectation to participate in ERM II. In this context our paper investigates which monetary options are generally open to the new members. Special attention will be given to the facts (i) that the candidates are, compared to the Euro group, rather low developed economies in a process of catching-up, and (ii) that system change has produced financial sectors with country specific characteristics and different performance. It leads to the conclusion that monetary relations with the Euro group will have to be differentiated accordingly