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Financial Development, Integration and Stability

Evidence from Central, Eastern and South-Eastern Europe Edited by Klaus Liebscher, Governor, Oesterreichische Nationalbank, Josef Christl, Managing Director, Macro-Consult e. U., Peter Mooslechner, formerly Oesterreichische Nationalbank and Doris Ritzberger-Grünwald, Director, Oesterreichische Nationalbank, Austria
This book highlights the achievements and challenges of the ongoing process of financial integration in Europe.
 
This unique collection will be of great interest to economists and experts in the fields of financial markets and European integration from central, commercial and investment banks, governments, international organizations, universities and research institutes.
Published in Association with Oesterreichische Nationalbank, Austria
Extent: 576 pp
Hardback Price: $234.00 Web: $210.60
Publication Date: 2007
ISBN: 978 1 84542 967 6
Availability: In Stock
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The financial integration of Europe is both welcomed as an economic driving force and watched with concern as a source of potential stability. After all, changing financial, regulatory and corporate ownership structures are fuelling competition, capital mobility and financial intermediation, but at the same time creating new systemic risks. With a special focus on Central, Eastern and South-Eastern Europe, the contributors to this book explore a wide spectrum of underlying issues, including the finance-growth nexus, credit boom patterns, the implications of foreign bank entry modes, lessons learned from old EU member states and commercial bank strategies. Authoritative views from central bank officials and policymakers are complemented with a special focus on empirical and econometric evidence from academia as well as practical insights from key financial market players.
 
This unique collection will be of great interest to economists and experts in the fields of financial markets and European integration from central, commercial and investment banks, governments, international organizations, universities and research institutes.
‘Financial industries in central, eastern and south-eastern Europe have undergone dramatic changes over the past decade. Foreign direct investment contributed to the development of market-oriented banking and financial systems able to support the rapid pace of economic growth in these countries. Policymakers, academics and private sector analysts have contributed to this volume with their stimulating insights on a broad range of issues, from recent credit booms to the cross-border integration of banking and capital markets. Anyone who wants to understand how finance, growth and financial stability interact in transition economies should read this book.’
– Mario Draghi, Governor of the Banca d’Italia and Chairman of the Financial Stability Forum

Contributors: F. Allen, A. Babus, L. Bartiloro, F. Boissay, C. Calari, O. Calvo-Gonzalez, L. Cappiello, J. Christl, S. Claeys, F. Coricelli, C. Duenwald, T. Dvorak, F. Fecht, G. Fink, Z. Fluck, T. Galac, B. Gérard, H.P. Grüner, N. Gueorguiev, C. Hainz, P. Haiss, A. Kadareja, M. Köhler, O. Kowalewski, T. Koźluk, E. Kraft, A. Lamfalussy, J. Le Maux, K. Liebscher, S. Manganelli, K. Männasoo, C. Mayer, D.G. Mayes, A. Mehl, P. Mooslechner, F. Mucci, D.C. Mueller, R. Ortner, E. Peev, D. Pop, C. Popa, A. Profumo, T. Reininger, D. Revoltella, D. Ritzberger-Grünwald, A. Schaechter, I. Schwimann, R.M. Stulz, G. Tumpel-Gugerell, K. Vandenbergen, C. Vespro, G. Vukšić, Z. Walko, A. Winkler, S. Zapotocky
Contents:

Preface
Klaus Liebscher, Josef Christl, Peter Mooslechner and Doris Ritzberger-Grünwald

PART I: ACHIEVEMENTS AND CHALLENGES IN EUROPEAN FINANCIAL INTEGRATION
1. Financial Integration and Financial Deepening in the EU: Mind the Gap
Klaus Liebscher

2. Benefits and Risks of Financial Integration
Cesare Calari

3. Financial Globalization, Corporate Governance and Eastern Europe
René M. Stulz

PART II: EUROPEAN FINANCIAL STRUCTURES YESTERDAY, TODAY AND TOMORROW
4. Does the Financial Sector Need Europe?
Gertrude Tumpel-Gugerell

5. The Central and Eastern European Financial Sector: Current State and Prospects
Irmfried Schwimann and Kristin Vandenbergen

6. CEEC Financial Sector Issues and Macroeconomic Policy: A Perspective from Across Countries
Cristian Popa

7. The Financial System of the EU-25
Franklin Allen, Laura Bartiloro and Oskar Kowalewski

8. Meeting the Need for a Regulatory Framework for EU Financial Markets
Alexandre Lamfalussy

PART III: THE EUROPEAN FINANCIAL SYSTEM AS AN ECONOMIC DRIVING FORCE
9. Finance and Growth: The Legacy of Schumpeter to be Rediscovered?
Peter Mooslechner

10. The Impact of the Euro on Investment: Sectoral Evidence
Tomas Dvorak

11. Importance of Financial Sectors for Growth in Accession Countries
Gerhard Fink, Peter Haiss and Goran Vukšić

12. Financial Sector Development in South-Eastern Europe: Quality Matters
Arnaud Mehl, Cristina Vespro and Adalbert Winkler

PART IV: CREDIT GROWTH IN CENTRAL AND EASTERN EUROPE: A CAUSE FOR CONCERN?
13. Happy, Sad and Open Endings: A Comparison of Credit Growth in CEECs with Past Experiences and Ongoing Developments in Austria, Finland and Spain
Doris Ritzberger-Grünwald

14. Is Lending in Central and Eastern Europe Developing Too Fast?
Frédéric Boissay, Oscar Calvo-Gonzalez and Tomasz Koźluk

15. Too Much of a Good Thing? Credit Booms in Transition Economies: The Cases of Bulgaria, Romania and Ukraine
Christoph Duenwald, Nikolay Gueorguiev and Andrea Schaechter

16. The ‘New Europe’ Household Lending Market
Fabrizio Coricelli, Fabio Mucci and Debora Revoltella

PART V: FOREIGN BANK ENTRY AND CORPORATE OWNERSHIP STRUCTURES: IMPLICATIONS FOR BUSINESS, COMPETITION AND PROFITABILITY
17. Foreign Banks in Eastern Europe: Mode of Entry and Effects on Bank Interest Rates
Sophie Claeys and Christa Hainz

18. Ownership Structures and Investment in Transition Economies
Dennis C. Mueller and Evgeni Peev

19. Ownership Competition in the European Transition Arena: Towards a Viable Restructuring?
Diana Pop and Julien Le Maux

PART VI: BANKING AND FINANCIAL STABILITY: POTENTIAL PITFALLS
20. Deposit Interest Rates, Asset Risk and Bank Failure in Croatia
Evan Kraft and Tomislav Galac

21. Investigating the Early Signals of Banking Sector Vulnerabilities in Central and East European Emerging Markets
Kadri Männasoo and David G. Mayes

22. Financial Integration Through the Interbank Market: Stability and Welfare Implications
Falko Fecht and Hans Peter Grüner

23. Contagion Risk in Financial Networks
Ana Babus

24. Does Corporate Mobility Enhance Corporate Governance?
Zsuzsanna Fluck and Colin Mayer

PART VII: CAPITAL MARKET INTEGRATION AND CAPITAL MOBILITY IN NEW EU MEMBER STATES
25. Equity Market Integration of New EU Member States
Lorenzo Cappiello, Bruno Gérard, Arjan Kadareja and Simone Manganelli

26. The Integration of Czech, Hungarian and Polish Bond Markets with the Euro Area Bond Market – A Déjà-vu of the Club-Med Convergence Plays?
Thomas Reininger and Zoltan Walko

27. International Capital Mobility and Current Account Targeting in Central and Eastern European Countries
Matthias Köhler

PART VIII: COMPLEMENTING THE ACADEMIC VIEW: PERSPECTIVES FROM KEY FINANCIAL MARKET PLAYERS
28. Financial Institutions as a Driving Force of Integration
Josef Christl

29. UniCredit's Strategy in Central and Eastern Europe
Alessandro Profumo

30. Banking Consolidation
Reinhard Ortner

31. Building a Central European Exchange Alliance
Stefan Zopotocky

Index