BANKING IN THE NEW EU

MEMBER STATES

INTRODUCTİON

•Developments in financial markets have shaped• the economic and policy

debate in recent years

NEW EURO MEMBER STATES• the Czech Republic (CZ), Estonia (EE), Hungary• (HU), Latvia (LV), Lithuania (LT), Poland (PL),• and Slovakia (SK), which joined the EU on• 1 May 2004, and Romania (RO) and Bulgaria• (BG), which joined on 1 January 2007. Since• the bulk of the analysis covers the period from• 1996 until 2006, we also consider EU member• states, Slovenia (SI), which joined the euro area• on 1 January 2007, as well as Cyprus (CY) and• Malta (MT), which joined on 1 January 2008.

TWO MAJOR CHALLENGES

• 1-manege the continued and probably rapid procces of further real economic convergence• 2-to achive the degree of nominal

convergence

MAIN SUBJECTS

• the macroeconomic outlook• structural features of financial sectors in new

member states• the role of foreign banks• mergers and acquisition activities• the regulatory framework

THE MACROECONOMIC OUTLOOK

About table 1

• gdp increase• potential output increase• government consumption decrease• there is trade deficit because of import and

export • unemployment rate increase

STRUCTURAL FEATURES OF FINANCIAL SECTORS IN NEW

MEMBER STATES

• the nım-8 transition countries are characterised by relatively low levels of their economies from centrally planned ones, with very low levels of intermadiation

STOCK MERKETS IN NEW MEMBER STATES

THE SUTRUCTURE OF NMSs’ BANKİNG SECTORS

• İn terms of stability efficiency of their banking sectors NMSs’ banks seem to be adequately capitalised and profitable

ASSET QUALİTY

germany

italy

greece

THE ROL OF FOREIGN BANKS

Cross-border provision of financialservices in the euro area

assests liabilities

BANK AUSTRİA AND ITS PERFORMANCE IN CENTRAL AND

EASTERN EUROPE

• CROSS-BORDER FİNANCİNG FOR EASTERN EUROPE

• ONE CREDİT AVAİLABLE FOR TEN COUNTRİES• COORDİNATED PROVİSİON OF CREDİTS İN A

FAST AND FLEXİBLE MANNER FOR COMPANİES

• SUPPORT CLİENTS WİTH OPTİMAL FİNANCİNG

MERGER AND ACQUISITION ACTIVITIES

• Mergers = a company's own legal personality of the changing union of one another under a single management.

Acquisition

• merger differently can financial consolidation through can survive in the purchase. Acquisition, simply a part of an organization or company in another part of the purchase of the assets directly caused by the change

Reasons of the mergers

• expansion of regional and political area• • to protect their profit margins by increasing market share• • provide the technology needed• • expand marketing network• • to improve competitive power• • ensure that branch network•

THE REGULATORY FRAMEWORK

• Laws and regulations that outline the legal requirements to be met. They may also be complemented by policies, standards, directives and guidelines

International regulatory framework for banks (Basel III)

• "Basel III" is a comprehensive set of reform measures, developed by the Basel Committee on Banking Supervision, to strengthen the regulation, supervision and risk management of the banking sector

Aligning Financial Supervisory Structures with Country Needs

• The financial sector industry has undergone major changes in recent years. Technological innovation, deregulation, and liberalization are changing the context in which financial supervisors operate

• This timely book also identifies the pros and cons of different financial supervisory models.

CONCLUSİONS

• banks in new member states have benefited from a period of favourable macroeconomic conditions in the run up to eu accession

• for most NEMSs’will be the membership of the ERM ll with a view to joining the single currency and the implementation of the Lamfalussy procedure whic aims to reform a substantial part of the EU regulatory framework

sources

• www.ecb.int• www.bis.org• Occasional paper series no:81 marc 2008

PREPARED BY

• ALPARSLAN SARP• EMRE OFLAZ• DİLEK ALPAY• DİLAN ADAM• BUSE SOYTÜRK• BAŞAK KIZAL