Banking Crises in Transition Economies : Fiscal Costs and Related Issues

Tang, Helena ; Zoli, Edda ; Klytchnikova, Irina

World Bank, Washington, DC

关键词: ACCOUNTING;    BAD DEBT;    BAD DEBTS;    BANK ASSETS;    BANK CRISES;   

DOI  :  10.1596/1813-9450-2484
RP-ID  :  WPS2484

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The authors look at strategies fordealing with banking crises in 12 transition economies --five from Central and Eastern Europe (CEE): Bulgaria, theCzech Republic, Hungary, Macedonia, and Poland; the threeBaltic states: Estonia, Latvia, and Lithuania; and fourcountries from the Commonwealth of Independent States (CIS):Georgia, Kazakhstan, the Kyrgyz Republic, and Ukraine. Threetypes of strategies were used to deal with the crises. TheCEE countries generally pursued extensive restructuring andrecapitalizing of banks; most CIS countries pursuedlarge-scale liquidation; and the Baltic states generallypursued a combination of liquidation and restructuring. Thestrategy pursued reflected macroeconomic conditions and thelevel of development in a country's banking sector.There were more new banks in the former Soviet Union(FSU-the CIS and Baltic states), but they tended to besmall, undercapitalized, and not deeply engaged in financialintermediation. The CEE countries generally incurred higherfiscal costs than the FSU countries but ended up withsounder, more efficient banking systems, with many of therecapitalized banks being privatized to strategic foreigninvestors. The CIS countries pursued a less fiscally costlyapproach but have been left with weak banking systems andlow levels of intermediation. The Baltic states appear tohave struck a good balance, incurring modest fiscal costswhile making their systems sounder and more efficient. Thefindings suggest the following: a) Operational, financial,and institutional restructuring should be undertaken inparallel. b) Financial restructuring should involve adequaterecapitalization to deter moral hazard and repeatedrecapitalization. c) Operational restructuring should entailprivatization to core investors (particularly to reputableforeign banks). d) The enterprise problems underlyingbanking problems must also be addressed. e) Fiscal costswere reduced when governments dealt only with bad debtinherited from the socialist period; when small banks thatheld few deposits were allowed to fail, where the socialcosts of such failure were low; and when only banks that gotinto trouble because of external shocks were rescued whilethose suffering from poor management were liquidated. f) Thegovernment, not the central bank, should undertake bankrestructuring. Central bank refinancing is not transparentand could lead to hyperinflation.