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Abstract

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Designing the New European Union
Type: Book
ISBN: 978-1-84950-863-6

Article
Publication date: 8 May 2009

Valeriya Dinger and Jürgen von Hagen

The purpose of this paper is to present an analysis of the size of the banking sectors in central and Eastern European (CEE) countries. The banking sectors' ability is…

1135

Abstract

Purpose

The purpose of this paper is to present an analysis of the size of the banking sectors in central and Eastern European (CEE) countries. The banking sectors' ability is focused to provide financial intermediation between savers and investors in the economy.

Design/methodology/approach

The existing literature on banking in transition economies argues in unison that banking sectors in CEE countries are too small and do not provide sufficient levels of financial intermediation. In this paper, a common drawback of the existing measures used to indicate the size of CEE banking sectors is detected: they all relate the volume of bank intermediation to gross domestic product (GDP). It is argued that since transition economies have a low stock of financial wealth relative to economic activity, a more objective measure of the size of the banking sector is the ratio of bank assets to a proxy of the stock of financial wealth rather than to GDP.

Findings

There is evidence that the estimation of the size of the banking sectors relative to GDP produce downward biased measures for the ability of CEE banks to intermediate available financial resources. When the size of the banking sector is measured relative to financial wealth, the gap between the developed European Union banking systems and those of the CEE countries is not as severe as argued in studies based on the traditional approach of measuring the size of the banking system with respect to GDP.

Practical implications

Using the downward biased measure of financial system development to stress the underdevelopment of the financial intermediation in CEE may produce misleading policy recommendations, e.g. recommendations in the direction of rapid financial system expansion by lowering barriers of entry for new banks. The authors' new measure presents an alternative that should be considered by policy makers in the design of measures promoting financial system development.

Originality/value

The paper challenges the existing consensus on severe underdevelopment of the CEE banking sectors. It presents a new approach of accessing financial system development in emerging economies.

Details

Journal of Financial Regulation and Compliance, vol. 17 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

Abstract

Details

Designing the New European Union
Type: Book
ISBN: 978-1-84950-863-6

Article
Publication date: 1 October 2005

Georgios I. Zekos

Globalisation is generally defined as the “denationalisation of clusters of political, economic, and social activities” that destabilize the ability of the sovereign State…

1102

Abstract

Globalisation is generally defined as the “denationalisation of clusters of political, economic, and social activities” that destabilize the ability of the sovereign State to control activities on its territory, due to the rising need to find solutions for universal problems, like the pollution of the environment, on an international level. Globalisation is a complex, forceful legal and social process that take place within an integrated whole with out regard to geographical boundaries. Globalisation thus differs from international activities, which arise between and among States, and it differs from multinational activities that occur in more than one nation‐State. This does not mean that countries are not involved in the sociolegal dynamics that those transboundary process trigger. In a sense, the movements triggered by global processes promote greater economic interdependence among countries. Globalisation can be traced back to the depression preceding World War II and globalisation at that time included spreading of the capitalist economic system as a means of getting access to extended markets. The first step was to create sufficient export surplus to maintain full employment in the capitalist world and secondly establishing a globalized economy where the planet would be united in peace and wealth. The idea of interdependence among quite separate and distinct countries is a very important part of talks on globalisation and a significant side of today’s global political economy.

Details

Managerial Law, vol. 47 no. 5
Type: Research Article
ISSN: 0309-0558

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Content available
Article
Publication date: 8 May 2009

Jens Hagendorff

638

Abstract

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Journal of Financial Regulation and Compliance, vol. 17 no. 2
Type: Research Article
ISSN: 1358-1988

Content available
Book part
Publication date: 4 December 2006

Abstract

Details

Designing the New European Union
Type: Book
ISBN: 978-1-84950-863-6

Abstract

Details

Designing the New European Union
Type: Book
ISBN: 978-1-84950-863-6

Content available
Article
Publication date: 1 April 1998

Tibor Gönye

31

Abstract

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European Business Review, vol. 98 no. 2
Type: Research Article
ISSN: 0955-534X

Abstract

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Designing the New European Union
Type: Book
ISBN: 978-1-84950-863-6

Book part
Publication date: 1 July 2015

Nikolay Markov

This chapter investigates the predictability of the European monetary policy through the eyes of the professional forecasters from a large investment bank. The analysis is…

Abstract

This chapter investigates the predictability of the European monetary policy through the eyes of the professional forecasters from a large investment bank. The analysis is based on forward-looking Actual and Perceived Taylor Rules for the European Central Bank which are estimated in real-time using a newly constructed database for the period April 2000–November 2009. The former policy rule is based on the actual refi rate set by the Governing Council, while the latter is estimated for the bank’s economists using their main point forecast for the upcoming refi rate decision as a dependent variable. The empirical evidence shows that the pattern of the refi rate is broadly well predicted by the professional forecasters even though the latter have foreseen more accurately the increases rather than the policy rate cuts. Second, the results point to an increasing responsiveness of the ECB to macroeconomic fundamentals along the forecast horizon. Third, the rolling window regressions suggest that the estimated coefficients have changed after the bankruptcy of Lehman Brothers in October 2008; the ECB has responded less strongly to macroeconomic fundamentals and the degree of policy inertia has decreased. A sensitivity analysis shows that the baseline results are robust to applying a recursive window methodology and some of the findings are qualitatively unaltered from using Consensus Economics forecasts in the regressions.

Details

Monetary Policy in the Context of the Financial Crisis: New Challenges and Lessons
Type: Book
ISBN: 978-1-78441-779-6

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