Eastern European Banking Model

A traditional banking model in a CEEC (Central and Eastern European Country) consisted of a central bank and several purpose banks, one dealing with individuals’ savings and other banking needs, and another focusing on foreign financial activities, etc. The central bank provided most of the commercial banking needs of enterprises in addition to other functions. During the late 1980s, the CEECs modified this earlier structure by taking all the commercial banking activities of the central bank and transferring them to new commercial banks. In most countries the new banks were set up along industry lines, although in Poland a regional approach has been adopted.

On the whole, these new stale-owned commercial banks controlled the bulk of financial transactions, although a few ‘de novo banks’ were allowed in Hungary and Poland. Simply transferring existing loans from the central bank to the new state-owned commercial banks had its problems, since it involved transferring both ‘good’ and ‘bad’ assets. Moreover, each bank’s portfolio was restricted to the enterprise and industry assigned to them and they were not allowed to deal with other enterprises outside their remit.

As the central banks would always ‘bale out’ troubled state enterprises, these commercial banks cannot play the same role as commercial banks in the West. CEEC commercial banks cannot foreclose on a debt. If a firm did not wish to pay, the state-owned enterprise would, historically, receive further finance to cover its difficulties, it was a very rare occurrence for a bank to bring about the bankruptcy of a firm. In other words, state-owned enterprises were not allowed to go bankrupt, primarily because it would have affected the commercial banks, balance sheets, but more importantly, the rise in unemployment that would follow might have had high political costs.

What was needed was for commercial banks to have their balance sheets ‘cleaned up’, perhaps by the government purchasing their bad loans with long-term bonds. Adopting Western accounting procedures might also benefit the new commercial banks.

This picture of state-controlled commercial banks has begun to change during the mid to late 1990s as the CEECs began to appreciate that the move towards market-based economies required a vibrant commercial banking sector. There are still a number of issues lo be addressed in this sector, however. For example, in the Czech Republic the government has promised to privatize the banking sector beginning in 1998. Currently the banking sector suffers from a number of weaknesses. A number of the smaller hanks appear to be facing difficulties as money market competition picks up, highlighting their tinder-capitalization and the greater amount of higher-risk business in which they are involved. There have also been issues concerning banking sector regulation and the control mechanisms that are available. This has resulted in the government’s proposal for an independent securities commission to regulate capital markets.

The privatization package for the Czech Republic’s four largest banks, which currently control about 60 percent of the sector’s assets, will also allow foreign banks into a highly developed market where their influence has been marginal until now. It is anticipated that each of the four banks will be sold to a single bidder in an attempt to create a regional hub of a foreign bank’s network. One problem with all four banks is that inspection of their balance sheets may throw up problems which could reduce the size of any bid. All four banks have at least 20 percent of their loans as classified, where no interest has been paid for 30 days or more. Banks could make provisions to reduce these loans by collateral held against them, but in some cases the loans exceed the collateral. Moreover, getting an accurate picture of the value of the collateral is difficult since bankruptcy legislation is ineffective. The ability to write off these bad debts was not permitted until 1996, but even if this route is taken then this will eat into the banks’ assets, leaving them very close to the lower limit of 8 percent capital adequacy ratio. In addition, the ‘commercial’ banks have been influenced by the action of the national bank, which in early 1997 caused bond prices to fall, leading to a fall in the commercial banks’ bond portfolios. Thus the banking sector in the Czech Republic still has a long way to go.

In Hungary the privatization of the banking sector is almost complete. However, a state rescue package had to be agreed at the beginning of 1997 for the second-largest state bank, Postabank, owned indirectly by the main social security bodies and the post office, and this indicates the fragility of this sector. Outside of the difficulties experienced with Postabank, the Hungarian banking system has been transformed. The rapid move towards privatization resulted from the problems experienced by the state-owned banks, which the government bad to bail out, costing it around 7 percent of GDP. At that stage it was possible that the banking system could collapse and government funding, although saving the banks, did not solve the problems of corporate governance or moral hazard. Thus the privatization process was started in earnest. Magyar Kulkereskedelmi Bank (MKB) was sold to Bayerische Landesbank and the EBDR in 1994, Budapest Bank was bought by GE Capital and Magyar Hitel Bank was bought by ABN-AMRO. In November 1997 the state completed the last stage of the sale of the state savings bank (OTP), Hungary’s largest bank. The state, which dominated the banking system three years ago, now only retains a majority stake in two specialist banks, the Hungarian Development Bank and Eximbank.

The move towards, and success of privatization can be seen in the balance sheets of the banks, which showed an increase in post-tax profits of 45 percent in 1996. These banks are also seeing higher savings and deposits and a strong rise in demand for corporate and retail lending. In addition, the growth in competition in the banking sector has led to a narrowing of the spreads between lending and deposit rates, and the further knock-on effect of mergers and small-hank closures. Over 50 percent of Hungarian bank assets are controlled by foreign-owned banks, and this has led to Hungarian banks offering services similar to those expected in many Western European countries. Most of the foreign-owned but mainly Hungarian-managed banks were recapitalized after their acquisition and they have spent heavily on staff training and new information technology systems. From 1998, foreign banks will be free to open branches in Hungary, thus opening up the domestic banking market to full competition.

As a whole, the CEECs have come a long way since the early 1990s in dealing with their banking problems. For some countries the process of privatization still has a long way to go but others such as Hungary have moved quickly along the process of transforming their banking systems in readiness for their entry into the EU.

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Smart Tips For Choosing The Best Auto Insurance Cover

Your vehicle is one of your most prized possessions and you need to ensure that it is well protected. One of the best ways of doing this is buying the proper auto insurance coverage. The market is populated with a lot of insurance agencies which makes it hard for you to make your choice easily. On the other hand, different products are all over which means that you should exercise due diligence before you make your final purchasing decision. The aim of this blog is to guide you accordingly in that direction so that you will be satisfied with your choice.

You must make sure that you are buying your auto insurance policy from the agency that has been operating the business for a long duration. This is because you can trust that they have a lot of experience and competence that will enable them to offer you the best service delivery. On the other hand, it is in order to visit the internet for the purpose of accessing the useful resources that will help you pick the best service provider. Look at what the clients that have engaged the auto insurance agency in the past are saying.

One of the aspects that will guide you in making a suitable choice for the auto insurance agency is the cost. You must ensure that you are financially able to pay the premiums that are quoted. It is a good business decision to compare the rates that are offered by different insurance providers for the purpose of getting the most competitive ones. You must, however, ensure that you are getting the coverage that is sufficient and your money’s worth. This means that you should base your eventual choice on cost only as that may cause you to get shortchanged on value.

When you are searching for the right auto insurance agency, it is essential to confirm that they are representing providers that have a strong financial base. The importance of this is that you will have the guarantee that your claims will be processed and settled as fast as possible. For this reason, you must endeavor to seek to know the financial ratings of the insurer from the online sites that are dedicated to providing those statuses.

You must make sure that you are going for the auto insurance agency that holds the necessary licensure and registration that gives them the authority to offer services in your area. If the service provider is a member of the regulatory bodies in the market, you are on the right path. This way, you will be in a position to find out if the agent has been accused of engaging in unprofessional and unethical behaviors. As well go for the company that is well-rated in the better business bureau and one that has a good image in the business.

Look for the auto insurance agency that is based in the area where you are residing. The importance of this is that you are going to rest assured that the services that you will receive will be fast and efficient. On the other hand, this will be cost-effective.

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Important Attributes To Evaluate As You Are Buying Davits

When you want to invest in the best dinghy davits, then you have to do good research. This will help you to know the nature of the dinghy davits that you are using. You will also have a good highlight of the quality characteristic of the dinghy davits. You need to have the dealership in dinghy davits that will do a good job. You do not want to have the dealership in dinghy davits that will take advantage. There is a need to settle for the most experienced company when it comes to the installation of the dinghy davits on your boat. If you have decided to install the dinghy davits on your boat, look for the following considerations.

If you want to install the dinghy davits onto your boat, then you will have to look at the quality. Various dealerships have been dealing with the fixing of the dinghy davits. Make sure that you have a good time with the company so that you know the nature of the dinghy davits they deal with. Most of the dealerships have counterfeits dinghy davits so that they make a lot of money. You will even have the contractors that will do a bad job so that you come back for maintenance. It is advisable that you look at the dinghy davits that will be durable. It is also good that you sit down and understand the nature and design of the dinghy davits that will please you.

The next feature of the best dinghy davits is the cost. The whole process of installing the dinghy davits on your ship will require a lot of work. You have to be prepared to pay for the dinghy davits as well as the labour. Again you need to ensure that you select the dealership in dinghy davits that will not disappoint you. Remember that you will have to pay a lot for the dinghy davits and this will mean that you are keen so that you have products worth your money. It is also good that you have in mind the certification of the dealership in dinghy davits. You will note that the company that have a license for dealing with dinghy davits will always do a good job.

Another factor to bear in mind as you are investing in the dinghy davits is trust. As you are choosing the best company that have been dealing with the dinghy davits, you will need to ensure that you look for the one that you are able to rely on. You do not want to have the company with staffs that are greedy. If you are working with a trustworthy company, then you will know that they will take care of your properties. When you fail to be keen, you realize that you make a lot of losses. Then next thing that you have to ensure as you are willing to have a good dinghy davit is to look at the compatibility with your boat.

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Aspects To Consider Before Choosing A Cosmetic Dentist
A type of dental work that tends to improve the appearance of the gum, teeth or bite is known as cosmetic dentistry. This type of dentistry usually emphasise on the aesthetics in terms of position, colour, alignment, size and the overall smile appearance. It is rather usual to come across an individual who is uncomfortable with how their teeth look like. In this scenario, you will be obliged to precisely visit a cosmetic dentist. There are different cosmetic dentists in several cities such as dentists Balcatta or cosmetic dentistry perth available. However, as there are many cosmetic dentists in the dentistry field one is required to evaluate some factors.
Today most folks are habitually insured. But most insurance companies usually incline not to cover cosmetic procedures. Therefore, in most situations, you will be needed to pay on your own. Most cosmetic dentists are usually expensive, although this automatically does not mean you cannot achieve the kind of appealing appearance you would want on your teeth. With this it is ideal that you come up with a list of cosmetic dentists you would desire to work with such as dentists Stirling or dentist innaloo and Perth Cosmetic Dentistry and dentist osborne park and karrinyup dental and Dental Implant Perth and teeth whitening Stirling . Since the list will make it effortless after you start comparing their charges. Although be wary when you stumble upon a very cheap cosmetic dentist. For the reason that as much as the deal might seem tempting, they might wind up saddening you in the long run.
Make sure that you check on the kind of experience the dentist might have had. In this situation, it will be of value if you probe to see their portfolio. This is because it will help you have a better understanding on the various procedures they might have worked on. Ensure that you visit a cosmetic dentist that has worked on a case comparable to yours. For the reason that they will be in a better place to evaluate the best strategy to make use of in order for you to achieve the aesthetic look you need. Moreover avert utilizing inexperienced cosmetic dentists; therefore, they should have five-year work experience.
To summarize, it is best that you make certain that the cosmetic dentist you want to make use of is certified. It can be pretty unsafe overlooking this aspect. For the reason that a certified cosmetic dentist is one that has been permitted by the authorities to work on patients who might need to improve on their appearances on their teeth. So one is usually guaranteed that they are in safe hands when they resolve to work with a certified cosmetic dentist. Ask to see their license document and make sure that it is updated.

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