Privatisation of financial services in the CEECs : relating the analysis to the Malta experience

Abstract

This study deals with the theory relating to financial services privatization, and with the history of such privatizations, in a selected number of Central and Eastern European Countries (CEECs). It has as its main research objective that of studying and discussing key categories of privatization themes, plus indicators and issues related thereto; and includes in this objective the structuring of a model template that incorporates the more important privatization circumstances applicable to each country's experiences. A consequential objective to such a matrix has been that of producing a final collective picture of the region's bank privatization experiences. And a further aim has been that of analogizing these experiences to the process of privatization of banks as it evolved in the small Mediterranean island of Malta. Using empirical observation and historic analysis as main methods, this work produces as key results a record of significant differences in strategy processes and implementation, and strongly asymmetric evolution paces of bank and economic restructuring. The finally collated picture is a complex and heterogeneous account of financial system transitioning, besides being a record of substantial national efforts in the midst of often very serious economic adversity, and of banking institutions labouring under tough legacy constraints from central planning and the policies and operational effects of mono banking. It will also be seen that this CEECs' banking sector experience contrasts substantially to that witnessed in Malta.