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Development and Efficiency of the Banking Sector in a Transitional Economy: Hungarian Experience

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Author Info
Hasan, Iftekhar () (BOFIT)
Marton, Katherin () (BOFIT)

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Abstract

The paper analyzes the experiences and developments of Hungarian banking sector during the transitional process from a centralized economy to a market-oriented system. The paper identifies that early reorganization initiatives, flexible approaches to privatization, and liberal policies towards foreign banks’ involvement with the domestic institutions helped to build a relatively strong and increasingly efficient banking system. Banks with higher foreign bank ownership involvement were associated with lower inefficiency.

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Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 7/2000.

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Length: 41 pages
Date of creation: 29 Jun 2000
Date of revision:
Handle: RePEc:hhs:bofitp:2000_007

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Keywords: banking; transition; efficiency; privatisation; Hungary;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  2. repec:fip:fedreq:y:1990:i:may:p:13-19:n:v.76no.3 is not listed on IDEAS
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    Other versions:
  5. William C. Hunter, 1993. "Banking reform and the transition to a market economy in Bulgaria: problems and prospects," Economic Review, Federal Reserve Bank of Atlanta, issue Jan, pages 15-22.
  6. Catte, Pietro & Mastropasqua, Cristina, 1993. "Financial structure and reforms in Central and Eastern Europe in the 1980s," Journal of Banking & Finance, Elsevier, vol. 17(5), pages 785-817, September. [Downloadable!] (restricted)
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    Other versions:
  8. DeYoung, Robert & Hasan, Iftekhar, 1998. "The performance of de novo commercial banks: A profit efficiency approach," Journal of Banking & Finance, Elsevier, vol. 22(5), pages 565-587, May. [Downloadable!] (restricted)
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  10. Thorne, Alfredo, 1993. "Eastern Europe's experience with banking reform: Is there a role for banks in the transition?," Journal of Banking & Finance, Elsevier, vol. 17(5), pages 959-1000, September. [Downloadable!] (restricted)
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  13. Gary Gorton & Andrew Winton, 1998. "Banking in transition economies : does efficiency require instability?," Proceedings, Federal Reserve Bank of Cleveland, issue Aug, pages 621-655.
  14. Berger, Allen N. & Hancock, Diana & Humphrey, David B., 1993. "Bank efficiency derived from the profit function," Journal of Banking & Finance, Elsevier, vol. 17(2-3), pages 317-347, April. [Downloadable!] (restricted)
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    Other versions:
  27. Saunders, Anthony & Sommariva, Andrea, 1993. "Banking sector and restructuring in Eastern Europe," Journal of Banking & Finance, Elsevier, vol. 17(5), pages 931-957, September. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Vernikov , Andrei V., 2007. "Russia's banking sector transition: Where to?," BOFIT Discussion Papers 5/2007, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
  2. Sufian, Fadzlan & Abdul Majid, Muhamed Zulkhibri, 2007. "Consolidation and efficiency: Evidence from non-bank financial institutions in Malaysia," MPRA Paper 12128, University Library of Munich, Germany, revised 01 May 2007. [Downloadable!]
  3. Ilko Naaborg & Bert Scholtens & Jakob de Haan & Hanneke Bol & Ralph de Haas, 2003. "How Important are Foreign Banks in the Financial Development of European Transition Countries?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  4. Bayraktar, Nihal & Yan Wang, 2004. "Foreign bank entry, performance of domestic banks, and sequence of financial liberalization," Policy Research Working Paper Series 3416, The World Bank. [Downloadable!]
  5. Valentina Hartarska & Steven B. Caudill & Daniel M. Gropper, 2006. "The Cost Structure Of Microfinance Institutions In Eastern Europe And Central Asia," William Davidson Institute Working Papers Series wp809, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
  6. Subal Kumbhakar & Dan Wang, 2007. "Economic reforms, efficiency and productivity in Chinese banking," Journal of Regulatory Economics, Springer, vol. 32(2), pages 105-129, October. [Downloadable!] (restricted)
  7. Fungáová, Zuzana & Godlewski , Christophe J. & Weill, Laurent, 2009. "Asymmetric Information and Loan Spreads in Russia: Evidence from Syndicated Loans," BOFIT Discussion Papers 7/2009, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
    Other versions:
  8. Gabriel Asaftei & Subal Kumbhakar, 2008. "Regulation and efficiency in transition: the case of Romanian banks," Journal of Regulatory Economics, Springer, vol. 33(3), pages 253-282, June. [Downloadable!] (restricted)
  9. Laurent Weill, 2008. "Convergence in Banking Efficiency Across European Countries," Working Papers of LaRGE (Laboratoire de Recherche en Gestion et Economie) 2008-07, Laboratoire de Recherche en Gestion et Economie, Université de Strasbourg (France). [Downloadable!]
  10. Delis, Manthos D & Papanikolaou, Nikolaos I, 2009. "Determinants of bank efficiency: Evidence from a semi-parametric methodology," MPRA Paper 13893, University Library of Munich, Germany. [Downloadable!]
  11. Stavarek, Daniel & Šulganová, Jana, 2009. "Analýza efektívnosti slovenských bánk využitím Stochastic Frontier Approach
    [Analysis of Efficiency of Slovak Banks Using Stochastic Frontier Approach]    ," MPRA Paper 16020, University Library of Munich, Germany. [Downloadable!]
  12. Paul Evans & Iftekhar Hasan & Ana Lozano-Vivas, 2008. "Deregulation and Convergence of Banking: The EU Experience," Finnish Economic Papers, Finnish Economic Association, vol. 21(2), pages 104-117, Autumn. [Downloadable!]
  13. Adrian E. Tschoegl, 2004. "Financial Crises and the Presence of Foreign Banks," International Finance 0405016, EconWPA. [Downloadable!]
  14. Hanneke Bol & Jakob de Haan & Bert Scholtens & Ralph de Haas, 2002. "How Important Are Foreign Banks in European Transition Countries? A Comparative Analysis," International Finance 0209005, EconWPA. [Downloadable!]
  15. G. Lanine & R. Vander Vennet, 2006. "Microeconomic determinants of acquisitions of Eastern European banks by Western European banks," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 06/414, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]
  16. Julien Reynaud & Rofikoh Rokhim, 2005. "Do banking crises enhance efficiency ? A case study of 1994 Turkish and 1997 Indonesian crises," Cahiers de la Maison des Sciences Economiques bla05007, Université Panthéon-Sorbonne (Paris 1). [Downloadable!]
    Other versions:
  17. Dan Luo & Shujie Yao, . "World Financial Crisis and the Rise of Chinese Commercial Banks," Discussion Papers 09/08, University of Nottingham, GEP. [Downloadable!]
  18. Daniel Stavarek, 2005. "Efficiency of Banks in Regions at Different Stage of European Integration Process," Finance 0502020, EconWPA. [Downloadable!]
  19. Sufian, Fadzlan & Abdul Majid, Muhamed Zulkhibri, 2007. "Bank Ownership, Characteristics and Performance: A Comparative Analysis of Domestic and Foreign Islamic Banks in Malaysia," MPRA Paper 12131, University Library of Munich, Germany, revised 01 Jun 2007. [Downloadable!]
  20. Delis, Manthos D & Koutsomanoli-Filippaki, Anastasia & Staikouras, Christos & Gerogiannaki, Katerina, 2008. "Evaluating cost and profit efficiency: a comparison of parametric and nonparametric methodologies," MPRA Paper 14039, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  21. Muliaman D. Hadad & Maximilian J. B. Hall & Wimboh Santoso & Ricky Satria & Karligash Kenjegalieva & Richard Simper, 2008. "Banking Efficiency and Stock Market Performance: An Analysis of Listed Indonesian Banks," Discussion Paper Series 2008_07, Department of Economics, Loughborough University, revised Aug 2008. [Downloadable!]
  22. Anastasia Koutsomanoli-Filippaki & Emmanuel Mamatzakis, 2008. "Banking Inefficiency in Central and Eastern European countries under a Quadratic Loss Function," Discussion Paper Series 2008_11, Department of Economics, University of Macedonia, revised Sep 2008. [Downloadable!]
    Other versions:
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