Lessons from Bank Privatization in Central Europe
AbstractIn the three fast track, Central European transition countries, Hungary, Poland and the Czech Republic, bank restructuring and privatization involved different approaches and met with a variety of outcomes. Hence, these experiences in otherwise similar transition economies provide important lessons for bank privatization in other transition countries and in developing economies. If an independent market-oriented banking sector is the overriding goal, three fundamental conclusions emerge. First, bank restructuring and privatization must be sequenced carefully to create the appropriate incentives for lending on a commercial basis only in the future. Second, privatization requires a credible transfer of proper corporate culture is most easily established by attracting a strategic investor, preferably a foreign financial institution.
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Bibliographic InfoPaper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 245.
Date of creation: 01 May 1999
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bank privatization; bad loans; bank restructuring; financial sector reform; transition economies;
Find related papers by JEL classification:
- P34 - Economic Systems - - Socialist Institutions and Their Transitions - - - Finance
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
This paper has been announced in the following NEP Reports:
- NEP-CWA-2001-12-04 (Central & Western Asia)
- NEP-EEC-2001-12-19 (European Economics)
- NEP-TRA-2001-12-19 (Transition Economics)
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- Bonin, John & Wachtel, Paul, 2002. "Financial sector development in transition economies: Lessons from the first decade," BOFIT Discussion Papers 9/2002, Bank of Finland, Institute for Economies in Transition.
- Guisan, Maria-Carmen & Aguayo, Eva & Carballas, David, 2004. "Economic Growth and Cycles in Poland, Hungary, Czech Republic, Slovakia and Slovenia: A comparison with Spain, Austria and other EU countries, 1950-2002," Economic Development 79, University of Santiago de Compostela. Faculty of Economics and Business. Econometrics..
- Abel, Istvan & Siklos, Pierre L., 2004. "Secrets to the successful Hungarian bank privatization: the benefits of foreign ownership through strategic partnerships," Economic Systems, Elsevier, vol. 28(2), pages 111-123, June.
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