Research background: In a rapidly changing economic environment companies deepen their cooperation, which occurs in all sectors of the economy. The progressive increase in market concentration, especially in the banking sector, is caused by various reasons. Purpose of the article: The purpose of this article is to compare the tendencies within market structures in few countries which origin from similar political systems and which have got experience in transformation of banking sectors. Methods: The research concerns the Baltic and the Western Balkan States. Concentration of the banking sectors, as measured by both HHI and CR5 indices changed during the quoted period, as a result of the consolidation of the sector. The study revealed a distinct change in the growth rate of market concentration and the number of banks, and is based on data provided by the local central banks and the European Central Bank. Findings and Value added: The situation in banking sectors in the Western Balkans differed significantly, which could be explained by strong economic ties, particularly with Germany and Austria. In this region, the raising concentration of the banking markets is related to the decreasing number of banks, while in the Sea Baltic States the increasing number of institutions is accomplished by the falling concentration ratio. The paper concerns the developments of the banking sectors which are not yet well described and do not belong to the mainstream of research in the Polish literature, meaning the region of the Western Balkans.
Economic transformation is still an ongoing process in many European countries. Despite common economic roots, the current economic situations are developing differently in different countries. This article will consider the process of economic transformation in terms of the banking sector. It aims to assess the level of banking stability throughout the transformation process in the Western Balkan region, and to assess the determinates of banking stability. A tool based on the Macroeconomic Stability Pentagon is used to estimate banking stability. The study finds that in most of the researched countries, the most common determinates of banking stability are market concentration and market competition. Additionally, it finds that the stability of banking systems in two countriesrelatively the most transformed in the region (Croatia) and the one which is considered the most delayed (Serbia)are influenced by similar factors, while the other banking systems in the region, despite common roots and experiences, vary in terms of the factors affecting their banking stability.
Financial comparison of Western Balkan and Baltic Sea states using the CAMEL approachThis article aims to compare the situation in the banking sectors of two regions that have much in common due to their political and economic history: the Western Balkan states of Serbia, Croatia, and Macedonia and the Baltic Sea states of Lithuania, Estonia, and Latvia. It presents three approaches to defining banking stability that can be found in literature and carries out a preliminary analysis of the financial performance of the discussed banking sectors using the CAMEL approach. Although in 2010 the banking sectors of the Baltic Sea states were in a worse shape than the banking sectors of the Western Balkan states, it has been proved that the banking sectors in countries in which the process of economic transformation has been completed could recover from a crisis faster than states that are still undergoing this process. Economic transformation is essential for the further development of the market economy and the sooner it is completed, the sooner the banking sector can develop and the easier it will be to recover from a crisis or an external shock.
The banking sector is one of the key sectors in every economy, therefore, the issue of stability is one of the main interests not only of researchers but also policy-makers. The stability of the banking sector is especially important during a process of transformation. The aim of this article is to present a new tool for estimating the stability of the banking sector as a whole. Although the tool can be used to estimate the level of stability for all countries, the relationships between various variables and interdependence of the ratios used in the tool will differ between the countries surveyed, as tested in the article. The study is based on selected countries from two regions: the Western Balkans and the Baltic Sea states that are either in the process of transformation or have just completed that. Due to the choice of the banking sectors under study, it was possible to perform a comparative analysis between countries that have already undergone the transformation process and those that are currently in the transformation process. The survey is based on quarterly data for the period Q1, 2010-Q1, 2016. The data has been sourced from the International Monetary Fund.
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