engleski

The Role of the State-Owned Banks in Transition Countries' Economic Development

In the process of market liberalization, i.e. transition from non-market into market economy, a great number of foreign banks enter the market thereby increasing the inter-banking competition in financial markets. The emerging of other financial institutions (insurance companies, pension funds, building societies...)contributes to the outflow of savings from the state-owned banks as well. The establishment of a great number of financial institutions owned by foreigners, and the sell-out of the state-owned banks, transferred the management of the entire national potential to foreigners. Being aware of this, the expected development and growth of the indigenous economies is not possible. It is necessary to retain the existing state-owned banks and by applying the proper business strategy and concepts to channel financial flows into the national economy, and thereby improve its development and growth.

Banking system; economic development

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