Transitional Economies: Banking, Finance, Institutions

By Yelena Kalyuzhnova; Michael Taylor | Go to book overview
Save to active project

3
Banking Sector Restructuring in the Baltics 1

AlexFleming


Introduction

For any country a banking crisis can be a costly experience, but for a country in transition it can also cause significant disruption to the transition process itself and undermine the authorities' efforts to construct a modern, market-based financial system. Although the Baltic republics of Estonia, Latvia and Lithuania have been in the vanguard of transition in the Former Soviet Union (FSU), and have made significant steps towards a market-based economy, their transition efforts were almost undermined by serious banking crises in the mid-1990s. The banking crises in the three Baltic republics shared some common roots but they manifested themselves in different ways and at slightly different times in the transition. The main similarities relate to the broad context in which they arose, specifically the environment of simultaneous transition and adjustment, which puts tremendous strain on banks and their enterprise borrowers and reveals the inherent weakness in the banks and their regulations. Another similarity relates to the factors internal to the banks: weaknesses in management and in general banking skills.

These countries' banking crisis experience provides a series of case studies from which it is possible to draw some general conclusions, concerning both the causes and the implications of serious banking crises in countries in transition. This chapter aims to extract these general conclusions. It begins by describing the efforts to construct a market-based banking system in each of the Baltic states and then considers the various factors, including errors of policy, that contributed to the banking crisis. This is followed by an analysis of the authorities' response to the crisis and the measures that were adopted to attempt to

-85-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited page

Bookmark this page
Transitional Economies: Banking, Finance, Institutions
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen
/ 256

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?