Open AccessDevelopment Prospects of Banking Sector in Central and Eastern European Countries in Terms of Financial Integration
Author(s) -
Darya Chumachenko,
Tatyana Derkach,
Виталина Бабенко,
Marharyta Krutko,
Sergey Yakubovskіy,
Tatiana Rodionova
Publication year - 2021
Publication title -
estudios de economía aplicada
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.123
H-Index - 6
eISSN - 1697-5731
pISSN - 1133-3197
DOI - 10.25115/eea.v39i7.4949
Subject(s) - financial system , economics , convergence (economics) , liberalization , financial sector development , international economics , financial sector , financial integration , financial market , business , macroeconomics , finance , market economy
This study examines banking transformations in Central and Eastern Europe (CEE) under conditions of economic liberalization, dependence between economic development of countries and efficiency of their banking systems. The comparative method and methods of economic-mathematical modeling were applied. Considering the positive correlation between financial structure and economic growth, confirmed by literature findings, the development of the financial sector can become a crucial factor in convergence for the new EU members. Analysis revealed lower depth of financial sector in Central and Eastern European countries region in comparison to the Eurozone, but higher efficiency and growth rates. Regression models confirmed the significant causality between financial sector expansion and economic growth of CEE countries, but extremely high foreign market shares in the banking sector of region create prerequisites for financial shocks transmission through contagion channel in case of economic instability in the countries of banks’ origin.