Cooperative Banking in the Ten Newly Admitted EU Member Countries in 2004

Abstract

The economic and financial systems of the ten newly-admitted EU member countries have undergone sweeping changes over the last twenty years. In particular, those Countries may be grouped into two homogeneous clusters. The first one comprises the countries that remained under the influence of the Soviet Union until the end of the 1980s and that had in force - to a varying extent - a system of planned economy; that is, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovakia and Slovenia. The second one comprises those under the Anglo-American influence, where an economy based on free trade and private property was already operational; these are Malta and Cyprus.¹ In the first group, the passage from a planned economy to a market economy had initially led to a considerable economic growth attained within an inadequate regulatory context, in particular with reference to the laws concerning the conmixtion between bank and industry and the control over assumed risks. As a rule, the direct consequence of such a situation had been the surfacing of deep economic-financial crises that brought about a thorough reassessment of the national regulatory setup. On the other hand, the countries belonging to the second group suffered no transition problem, as the economic and financial system had developed after World War II according to the rules of the market, making the evolution of such countries fully assimilable to that of the continental context (Caviglia, Krause and Thimann 2003).