38 Lajos Bokros Experience and Perspectives of Financial Sector Development in Central and Eastern Europe W a r s a w , 2 0 0 1 Responsibility for the information and views set out in the paper lies entirely with the author. The publication was financed by the BRE Bank SA within the joint project "Seminaria BRE-CASE" (BRE-CASE Seminars) Graphic Design: Agnieszka Natalia Bury DTP: CeDeWu Sp. z o.o. ISSN 1506-1639, ISBN 83-7178-256-X Publisher: CASE – Center for Social and Economic Research ul. Sienkiewicza 12, 00-944 Warsaw, Poland tel.: (4822) 622 66 27, 828 61 33, fax (4822) 828 60 69 e-mail:
[email protected] Contents Abstract 5 1. Trust Based on Culture and Tradition 6 2. Initial Conditions 6 3. Common Features in 2000 7 4. Increasing Differences Among Countries in Financial Sector Development 10 5. Advanced Reformers 11 6. Reluctant Modernizers 13 7. Struggling with Double Legacy 17 8. Desperate Reformers 20 9. Prolonged Crisis Cases 24 10. Three Pillars of Financial Sector Development 28 CASE-CEU Working Papers Series No. 38 – L. Bokros Lajos Bokros Director of Financial Advisory Services, Europe & Central Asia Region in the World Bank. Former Hungarian Minister of Finance, Chairman of the Budapest Stock Exchange, and Director of the State Property Agency (privatization agency). Author of the successful Hungarian stabilization plan in the mid-nineties. 4 CASE-CEU Working Papers Series No. 38 – Experience and Perspectives of Financial ... Abstract Financial sector development in Central and Eastern Europe has proved to be a very dramatic process characterized by some well trumpeted success stories but even more so by many unexpected collapses of seemingly decent institutions and some systemic meltdown as well.