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Title: Deregulation and the crisis in transitional banking systems in traditional and newly-established market economies
Author: Hewelt, Przemyslaw Wojciech
ISNI:       0000 0001 3555 4765
Awarding Body: Nottingham Trent University
Current Institution: Nottingham Trent University
Date of Award: 1996
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At the end of the 1980s the banking system in Poland was de-regulated allowing competitive forces to operate. This process gave banks freedom to shape their lending policies. Since 1992 a number of banks had begun to report an increase in the number of bad loans. A number of banks had become insolvent. Analysis of case studies of failed banks showed that managers made serious mistakes in the decision - making process. Lack of experience of operating in the market environment could be the most obvious explanation to those phenomena. However, the analysis of the case studies of the banking de-regulation processes undertaken in the United Kingdom, the USA, Norway and Finland revealed a very similar pattern of lending behaviour which also led to deterioration of assets quality and, in extreme cases, to bankruptcy. In spite of different levels of economic development of Poland and the mature market economies mentioned above, the study indicates the existence of a common pattern of post de-regulation banking crises. Analysis of the financial de-regulation processesin the case study countries illustrates the hypothesis, that the nature of the post de-regulation banking crisis in Poland is similar to the post de-regulation crises observed in mature market economies. The shock of the regulatory change in the banking industry causes deterioration of risk management standards, with no respect whether banking de-regulation has been conducted in a mature market economy or in the transitional economy of Poland. In both cases the change of regulatory framework caused deterioration of risk management standards, which negatively affected banks' financial situation. This study provides also verification of Llewellyn's overreaction hypothesis in the conditions of a transitional economy of Poland. Findings of the study indicate that the hypothesis developed upon the experience of mature market economies also applies to the less developed banking system in Poland. VIII
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Competition