Risk, Regulation and Competition in Banking and Finance in Transition Economies

When the centrally planned economies of eastern Europe and the Soviet Union began transition to a market economy in the early 1990s, it was widely recognised that the system of banking and finance would play a pivotal role in the economic development of each country. Nearly two decades later the banking systems have been transformed from crude mono-bank systems to functioning market-oriented systems of banking and finance. The transition, however, has not been without difficulties. As the legal and regulatory environment evolved to accommodate a market-oriented system, issues dealing with bank strategic behaviour, market consolidation and competition, foreign bank entry, banking risks, efficiency and asymmetric information, inter alia, quickly arose. Recognising the importance of addressing these issues both theoretically and empirically The Department of Economics of Ghent University organised a Conference entitled 'Risk, Regulation and Competition: Banking in Transition Economies', financed by funds from the Belgian Inter University Attraction Poles for researchers to discuss these issues in detail. The papers in this symposium issue are drawn from this conference.