Financial Sector Development in New EU Member States

Abstract

Purpose: This chapter analyses the financial sector development indicators of the new European Union (EU) member states, identifying the most important factors affecting their development. It focuses on the 13 new member states of the EU that joined the EU from 2004.

Need for study: Financial sector development has a significant impact on any country’s economy, supporting faster growth of its national economy. It is essential to study the general development factors and individual characteristics of the financial sector’s development in the new EU member countries and evaluate their financial policy decisions during the crisis period.

Methodology: The authors examine indicators characterising the development of the financial market, such as assets to gross domestic product (GDP), loans to GDP, market capitalisation to GDP, the number of companies traded in the capital market, and other indicators. Along with the development indicators, the authors analyse those affecting security and resilience, such as bank capital adequacy, non-performing loan (NPL) portfolio, and others. The research methodology comprises content analysis, logical, constructive analysis, synthesis methods, and graphic visualisation.

Findings: This chapter examines development aspects of the financial systems in the new EU member states, concluding that joining the EU contributed to the successful development of the financial markets and that common financial market principles helped the new EU member states cope with the challenges.

Practical implications: Helpful for financial sector experts and policymakers, findings provide insight into the development trends of financial and capital markets in the new EU members.

Citation

Kudinska, M., Solovjova, I. and Romānova, I. (2024), "Financial Sector Development in New EU Member States", Grima, S., Romānova, I., Noja, G.G. and Dorożyński, T. (Ed.) Economic Development and Resilience by EU Member States (Contemporary Studies in Economic and Financial Analysis, Vol. 115), Emerald Publishing Limited, Leeds, pp. 119-139. https://doi.org/10.1108/S1569-375920240000115008