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The EU Debt Crisis: A Reflection On Financial Sector Of The Western Balkans

Year 2013, Volume: 2 Issue: 1, 51 - 64, 01.03.2013

Abstract

The main objective of this article is to analyze the certain financial variables in order to have asses transmission effects of the EU debt crises on stability and efficiency of financial sector of Western Balkan (WB). Also, this study uses a cross-country comparison methodology and examines the following aspects: Capital adequacy, liquidity position and efficiency of the banking sector of the WB in pre crisis and crisis period as well as financial sector size, structure, and trends in financial developments for the WB region in pre crisis and crisis period. The paper is divided into six sections. Section 2 deals with the literature review. Section 3 contains an explanation of the data and methodology. Section 4 analyze trends in financial developments for the WB region. Section 5 gives an overview of the implications ofEU debt crises for WB financial system while the focus of the section 6 is on an analysis of changes in perceptions by European bank subsidiaries in WB countries in context of the European debt crisis. The findings and discussion presented in previous sections of this article ends with conclusions that impact of EU debt crises has been transmitted on the position banking sector of WB through several sources, especially through: decline in profitability, credit growth has dropped significantly and asset quality has deteriorated markedly.

References

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  • Derviz A. and Podpiera J. (2007). Cross-border lending contagion in multinational banks, ECB Working Paper Series, no 0 807.
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  • Ganić, M. (2012). The Impact the Global financial crisis on the banking sector of Western Balkans: Cross-country Comparison Analysis", Journal of Economic and Social Studies, ISSN 1986- 8499 (print), 1986-8502 (online Vol. 2, No. 2.
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  • Haselmann R. (2006). Strategies of foreign banks in transition economies, Emerging Markets Review, vol. 7, pp. 283-299.
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  • Pindyuk, O. and Holzner M. (2012). The European banking crisis and spillover effects in the CESEE countries, The Vienna Institute for International Economic Studies.
  • Puhr, C., Schwaiger, M. S. and Sigmund, M. (2009). Direct Cross-Border Lending by Austrian Banks to Eastern Europe, Financial Stability, 17–June.
  • Reinhart, C. and Kaminsky,G. (2001). Bank Lending and Contagion: Evidence from the Asian Crisis, in Regional and Global Capital Flows: Rosenberg, C. and Tirpák,M. (2008). Determinants of foreign currency borrowing in the New Member States of the EU. IMF Working Paper WP/08/173.
  • World Bank (2012). Global Economic Prospects- Europe & Central Asia Annex, Washington D.C.
  • World Bank, (2012). African Financial Sectors and the European Debt Crisis: Will Trouble Blow across the Sahara? CRISIS MONITORING POLICY BRIEFING.
  • World Bank, (2011). Jugoistočna Evropa Redovni ekonomski izveštaj, Jedinica za smanjenje siromaštva i ekonomsko upravljanje Region Evrope i Centralne Azije.
Year 2013, Volume: 2 Issue: 1, 51 - 64, 01.03.2013

Abstract

References

  • Bank of Albania, (2006-2011). Financial Stability Report,Annual Report.
  • BIS, (2003). Guide to the international banking statistics. Bank for International Settlements, BIS Paper, (16)-April.
  • Backe, P., Egert B. and Zumer, T. (2006). Credit Growth in Central and Eastern Europe: New (Over) Shooting Stars? Oesterreichische Nationalbank, Focus on European Economic Integration, (1):112–139.
  • Brown, M., S. Ongena and P. Yesin. (2009). Foreign currency borrowing by small firms. Center Discussion Paper No. 2008-16.
  • Brana, S. and Lahet, D. (2011). Foreign banks and the stability of foreign and domestic credit in CEECs, LAREFI Working Paper CR11-EFI/07, Université Montesquieu-Bordeaux, 2011.
  • Central Bank of Bosnia and Herzegovina, (2006-2011). Financial Stability Report,Annual Report. Central Bank of Montenegro, (2006-2011). Financial Stability Report,Annual Report.
  • Cetorelli N. and Goldberg L. S. (2009). Global Banks and International Shock Transmission: Evidence from The Crisis, Federal Reserve Bank of New York.
  • Claudio, B. (2003). Towards a macroprudential framework for financial supervision and regulation? BIS Working Papers No 128.
  • Cocozza, E. , Colabella, A. and Spadafora, F. (2011) The Impact of the Global Crisis on South-Eastern Europe, IMF Working Paper, WP/11/300.
  • Croatian National Bank, (2006-2011). Financial Stability Report,Annual Report.
  • Dynkin, A. (2010). Euro area crises: Causes and consequences for the Euro – Atlantic region, Report for the Commission of the Euro-Atlantic Security Initiative (EASI), Institute of World economy and International relations –Russion academy of sciences, Moscow.
  • De Haas R. and Van Lelyveld I. (2006). Foreign banks and credit stability in central and Eastern Europe. A panel data analysis”, Journal of Banking and Finance, 30, 1927-1952.
  • De Haas, R. and Van Lelyveld, (2010). Internal capital market and lending by multinational bank subsidiaries”, Journal of Financial Intermediation, Vol.19, pp. 1-25.
  • Derviz A. and Podpiera J. (2007). Cross-border lending contagion in multinational banks, ECB Working Paper Series, no 0 807.
  • ECB, (2010). Financial stability challenges in EU candidate countries-Financial systems in the aftermath of the global crisis, Occasional paper series, No 115. Eurostat Yearbook 2011.
  • Farbis, N. (2011). Bankarske krize s posebnim osvrtom na male otvorene ekonomije, Ekonomske ideje i praksa : kvartalni časopis iz oblasti ekonomije, poslovne ekonomije i menadžmenta, statistike i poslovne informatike, str.25-44.
  • Feyen, E., Kibuuka, K. and Ötker-Robe, İ. (2012). Bank Deleveraging- Causes, Channels, and Consequences for Emerging Market and Developing Countries, The World Bank Financial and Private Sector Development Network Financial Systems Global Practice.
  • Ganić, M. (2012). The Impact the Global financial crisis on the banking sector of Western Balkans: Cross-country Comparison Analysis", Journal of Economic and Social Studies, ISSN 1986- 8499 (print), 1986-8502 (online Vol. 2, No. 2.
  • Geršl, A. (2007). Foreign Banks, Foreign Lending and Cross-Border Contagion: Evidence from the BIS Data, Czech Journal of Economics and Finance, 2007, 57(1-2)
  • Haselmann R. (2006). Strategies of foreign banks in transition economies, Emerging Markets Review, vol. 7, pp. 283-299.
  • Kaminsky, G. L. and Reinhart, C. M. (2001) Bank Lending and Contagion: Evidence from the Asian Crisis. Published in: in Takatoshi Ito and Anne Krueger, eds. Regional and Global Capital Flows: Macroeconomic Causes and Consequences, (Chicago: University of Chicago Press for the NBER, 2001). pp. 73-99.
  • Maechler, A.M. and Ong, L.L. (2009). Foreign Banks in the CESE Countries: In for a Penny, in for a Pound? IMF Working Paper, WP/09/54.
  • Mendis, C. (2002). External Shocks And Banking Crises In Developing Countries: Does the Exchange Rate Regime Matter?, Cesifo Working Paper No. 759.
  • National Bank of the Republic of Macedonia, (2006-2011). Financial Stability Report,Annual Report.
  • National Bank of Serbia, (2006-2011). Financial Stability Report,Annual Report.
  • Pindyuk, O. and Holzner M. (2012). The European banking crisis and spillover effects in the CESEE countries, The Vienna Institute for International Economic Studies.
  • Puhr, C., Schwaiger, M. S. and Sigmund, M. (2009). Direct Cross-Border Lending by Austrian Banks to Eastern Europe, Financial Stability, 17–June.
  • Reinhart, C. and Kaminsky,G. (2001). Bank Lending and Contagion: Evidence from the Asian Crisis, in Regional and Global Capital Flows: Rosenberg, C. and Tirpák,M. (2008). Determinants of foreign currency borrowing in the New Member States of the EU. IMF Working Paper WP/08/173.
  • World Bank (2012). Global Economic Prospects- Europe & Central Asia Annex, Washington D.C.
  • World Bank, (2012). African Financial Sectors and the European Debt Crisis: Will Trouble Blow across the Sahara? CRISIS MONITORING POLICY BRIEFING.
  • World Bank, (2011). Jugoistočna Evropa Redovni ekonomski izveštaj, Jedinica za smanjenje siromaštva i ekonomsko upravljanje Region Evrope i Centralne Azije.
There are 31 citations in total.

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Journal Section Articles
Authors

Mehmed Ganić This is me

Publication Date March 1, 2013
Published in Issue Year 2013 Volume: 2 Issue: 1

Cite

APA Ganić, M. (2013). The EU Debt Crisis: A Reflection On Financial Sector Of The Western Balkans. Journal of Business Economics and Finance, 2(1), 51-64.

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