Banking Sector Systemic Risk in Selected Cenral European Countries. Review of: Bulgaria, Czech Republic, Hungary, Poland, Romania and Slovakia

Abstract

The Asian crisis brought much attention to banking sector systematic risk, understood as the potential macroeconomic consequences of the condition of the banking sector. In spite of growing interest, there are no widely accepted robust measures of this risk as it depends on a number of macroeconomic, microeconomic and institutional factors difficult to measure and compare internationally. This paper is an attempt at a comparative overview of banking sector systemic risk in six Central European countries concluding with some early recommendations. The countries covered by the paper are specific by the fact that in the early 1990’s they moved from a socialist to a market economy and the legacy of a socialist economy still has an important influence on the shape of their banking sectors.