1,721,013 research outputs found
Household savings in transition economies
Full text linkDuring the transition from central planning to market economies now under way in Eastern Europe, output levels first collapsed by 40 to 50 percent in most countries, then staged a modest recovery in the last two years. Longer-term revival of growth requires a resumption of investment and thus, realistically, of domestic savings. To explore the determinants of household savings rates in transition economies, the authors studies matching household surveys for three Central European economies: Bulgaria, Hungary, and Poland. They find that savings rates strongly increase with relative income, suggesting that increasing income inequality may play a role in determining savings rates. Savings rates are significantly higher for households that do not own their homes or that own few of the standard consumer durables-possibly because, with no retail credit or mortgage markets, households must save to purchase houses and durables. The influence of demographic factors broadly matches earlier findings for developing countries. Perhaps surprisingly, variables associated with the household's position in the transition process-including either sector of employment (public or private) or form of employment-do not play a significant role in determining savings rates.Environmental Economics&Policies,Services&Transfers to Poor,Economic Theory&Research,Banks&Banking Reform,Payment Systems&Infrastructure,Safety Nets and Transfers,Rural Poverty Reduction,Environmental Economics&Policies,Banks&Banking Reform,Economic Theory&Research
The effects of financial liberalization and new bank entry on market structure and competition in Turkey
Full text linkUntil 1980 Turkey's financial system was shaped to support state-oriented development. After the 1960s the financial system, dominated by commercial banks, became an instrument of planned industrialization. Turkey had an uncompetitive financial market and an inefficient banking system. Controlled interest rates, directed credit, high reserve requirements and other restrictions on financial intermediation, and restricted entry of new banks -plus the exit of many banks between 1960 and 1980- created a concentrated market dominated by banks owned by industrial groups with oversized branch networks and high overhead costs. Turkey since 1980 has seena trend toward liberalization of its financial market. Reforms eliminated interest rate controls, eased the entry of new financial institutions, and allowed new types of instruments. Regulatory barriers were relaxed, attracting many banks (both Turkish and foreign) into the system, and Turkey's banking system became integrated with world markets. The author examines how reform has changed the system, focusing on Turkey's commercial retail banking market. He finds that: (1) Although reform reduced concentration in the industry, leading banks are still able to coordinate their pricing decisions overtly. High profitability appears to have resulted from the banks uncompetitive pricing rather their efficiency. Deregulation and liberalization should be continued and strengthened. (2) The entry of small-scale firms alone is not enough to increase competition, so new banks should probably not be expected to alter the market structure. (3) To promote competition will require addressing barriers to both entry and mobility. The main barrier to mobility seems to be the size of the large banks, which exerts a significant negative effect on competition. (4) Interbank rivalry among the leading banks cannot be facilitated without creating new banks of a certain size with a reasonable number of branches. Breaking up public banks (which hold 30 percent of sectional assets, excluding the Agricultural Bank and three development banks) could help create 15 to 20 new banks with 40 to 50 branches. This would reduce concentration and improve mobility in retail banking. (5) Breaking up public banks before privatization would probably also improve their governance structures and efficiency. (6) Promoting the entry of nonbanks and local banks would also increase the number of institutions competing for deposits. Turkey lacks a healthy variety of credit institutions and should consider developing a mortgage market and creating institutions for housing finance.Payment Systems&Infrastructure,Financial Intermediation,Economic Theory&Research,Banks&Banking Reform,Markets and Market Access,Banks&Banking Reform,Financial Intermediation,Economic Theory&Research,Markets and Market Access,Access to Markets
Foreign entry in Turkey's banking sector, 1980-97
Full text linkDespite high and volatile inflation, a record number of foreign and local banks entered Turkey's banking sector after the country relaxed rules about bank entry, and generally eliminated controls on interest rates, and financial intermediation in 1980. The country's financial integration with the rest of the world took a big step forward with the opening up of the capital account in 1989. Capital inflows rose significantly, and the financial system became increasingly linked with external markets. The author examines one dimension of liberalization: the impact of foreign banks entering the financial sector. Between 1980 and the end of 1997, 17 foreign banks, and a number of new local banks entered the sector. The author investigates how these banks'entry into the sector affected performance, based on three measures: net interest margin, overhead expenses, and return on assets (all expressed as a percentage of total assets). He finds that: 1) Foreign bank ownership is related to all three performance measures. 2) Foreign bank entry reduced the overhead expenses of domestic commercial banks, strengthening profits. 3) Despite their small scale operations, foreign banks entering the sector had a strong effect on competition. But the market could use more competition. 4) There are strong indications that foreign banks had a positive impact on financial, and operational planning, credit analysis and marketing, and human capital.Payment Systems&Infrastructure,Financial Intermediation,Financial Crisis Management&Restructuring,Banks&Banking Reform,Banking Law,Banks&Banking Reform,Financial Intermediation,Banking Law,Financial Crisis Management&Restructuring,Municipal Financial Management
The savings collapse during the transition in Eastern Europe
Full text linkThe authors assess the presence and extent of involuntary savings by comparing the predicted savings rates of market economies with those of the pre-transition economies. On balance, predicted savings rates fell short of actual savings rates, especially for the former Soviet Union and the Baltics -- providing some support for the notion of excessive pre-transition savings. Comparing the savings behavior of market economies and transition economies, they found substantial similarities, except for a negative link between savings and GDP growth. As the fastest-growing transition economies are at the bottom of the adjustment J-curve, the finding is consistent with consumption smoothing. Finally, they explored whether differences in the extent of economic liberalization affected savings rates in the cross-section of transition economies. They found that liberalization is associated with lower savings, with a one-year lag. To the extent that liberalization is perceived as an indicator of likely future growth, this behavior is consistent with smoothing in the face of a J-curve change in output.Insurance Law,Banks&Banking Reform,Economic Theory&Research,Environmental Economics&Policies,Insurance&Risk Mitigation,Environmental Economics&Policies,Banks&Banking Reform,Economic Theory&Research,Insurance&Risk Mitigation,Rural Poverty Reduction
Foreign Entry in Turkey's Banking Sector, 1980-97
No full textDespite high and volatile inflation, a record number of foreign and local banks entered Turkey's banking sector after the country relaxed rules about bank entry, and generally eliminated controls on interest rates, and financial intermediation in 1980. The country's financial integration with the rest of the world took a big step forward with the opening up of the capital account in 1989. Capital inflows rose significantly, and the financial system became increasingly linked with external markets. The author examines one dimension of liberalization: the impact of foreign banks entering the financial sector. Between 1980 and the end of 1997, 17 foreign banks, and a number of new local banks entered the sector. The author investigates how these banks' entry into the sector affected performance, based on three measures: net interest margin, overhead expenses, and return on assets (all expressed as a percentage of total assets). He finds that: 1) Foreign bank ownership is related to all three performance measures. 2) Foreign bank entry reduced the overhead expenses of domestic commercial banks, strengthening profits. 3) Despite their small scale operations, foreign banks entering the sector had a strong effect on competition. But the market could use more competition. 4) There are strong indications that foreign banks had a positive impact on financial, and operational planning, credit analysis and marketing, and human capital
The effects of financial liberalization and new bank entry on market structure and competition in Turkey
No full textCevdet Denize
Foreign entry in Turkey's banking sector, 1980 - 97
No full textby Cevdet DenizerParallel als Buch-Ausg. erschiene
The effects of financial liberalization and new bank entry on market structure and competition in Turkey / Cevdet Denizer
No full textForeign entry in Turkey's banking sector, 1980 - 97 / by Cevdet Denizer
No full textParallel als Buch-Ausg. erschiene
Stabilization, adjustment, and growth prospects in transition economies
Full text linkPolitical change marked the difference between the approaches of the countries of Eastern Europe and the former Soviet Union (FSU). The Baltics and most Eastern European countries wanted to break away from communism and the FSU domination--so their transition was characterized first by political change. Communists were discredited and removed from power, creating a period of"extraordinary politics"and a window of opportunity for reform. The collapse of the FSU did not lead to political change in most FSU states. There were indications of discontent with the Union, but except for the Baltics these were not as strong as in the Eastern European countries and there were no explicit demands for independence. The former communists hoped that the Commonwealth of Independent States (CIS) set up after the collapse of the FSU would evolve into a loose federation maintaining old trade and financial links. Many FSU countries avoided policies different from Russia's. Most political leaders did not initially think that they would need structural reform policies which could diverge from Russian policies. The pace of reform quickened only after the collapse of the ruble zone in the FSU in 1993. Knowing where to go helped shape reform. The Eastern European and Baltic countries, wanting to join the European Union and encouraged to do so, first initiated political reform, which led to economic reform. Most FSU countries, not knowing with whom to align, initially saw no choice but the Russian Federation. Once reforms are launched, the outcomes are quite similar. Growth starts about two full years after stabilization, although it took about a year longer in the FSU. Initial conditions are important to the transition. Short to medium-term prospects seem most favorable to Eastern Europe and the Baltics, although they still have to catch up with the OECD countries. If admitted to the European Union, they may attain high growth rates even in the longer term. The FSU countries have even more catching up to do. In the short to medium-term, countries with slower population growth rates and strong reform efforts should enjoy rapid per capita growth. The Central Asian countries, with their high population growth rates, need economic growth rates faster than their population growth rates. This leaves little room for slowing reform. Given the benefits of integration, there is a strong case for Central Asian countries pushing for an economic union, which would also facilitate the restructuring of their economies.Public Health Promotion,Economic Theory&Research,Economic Conditions and Volatility,Environmental Economics&Policies,Banks&Banking Reform,Achieving Shared Growth,Governance Indicators,Economic Conditions and Volatility,Economic Theory&Research,Environmental Economics&Policies
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