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Banking Sector Reform in Hungary: Lessons Learned, Current Trends and Prospects

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  • György Szapáry

    () (Magyar Nemzeti Bank)

Abstract

This paper reviews the reform of and current trends in the Hungarian banking system and draws some lessons that can be useful for countries where the reforms are less advanced. The point is made in the paper that since the weak financial position of state enterprises has been one of the major sources of difficulties encountered by the banks in transition economies, it is crucial that the restructuring of the banks and enterprises go hand in hand. One lesson learned is that consolidation should be based on an accurate assessment of the difficulties of the banks to reduce the cost of consolidation and should be accompanied by a strengthening of regulation and supervision to prevent the reproduction of losses. The paper also discusses the reasons for the low depth of financial intermediation in Hungary and concludes that this situation will change only slowly.

Suggested Citation

  • György Szapáry, 2001. "Banking Sector Reform in Hungary: Lessons Learned, Current Trends and Prospects," MNB Working Papers 2001/5, Magyar Nemzeti Bank (Central Bank of Hungary).
  • Handle: RePEc:mnb:wpaper:2001/5
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    File URL: http://www.mnb.hu/letoltes/wp2001-5.pdf
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    References listed on IDEAS

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    Cited by:

    1. Max Gillman & Anton Nakov, 2004. "Granger causality of the inflation-growth mirror in accession countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(4), pages 653-681, December.
    2. Király, Júlia & Nagy, Márton & Banai, Ádám, 2010. "Az aranykor vége Magyarországon. "Külföldi" és "lokális" bankok - válság előtt és válság után
      [End of the golden age in Hungary. "Foreign" and "local" banks
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 105-131.
    3. Brzoza-Brzezina, Michał, 2005. "Lending booms in the new EU Member States: will euro adoption matter?," Working Paper Series 543, European Central Bank.

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