A review of banking institutions' transformation in Balkan transition economies: 1990–2000

The decade 1990–2000 has been considered as the most crucial and risky for the future development of all Balkan countries, passing from centrally planned to open economies. This paper examines the status of the banking sector and the prevailing conditions in the embryonic financial markets, compared to the suggested policies put forward. Almost all Balkan countries have got over acute problems generated by the transformation of their economies. The parallel development of internal and external trade offered new possibilities for expansion of banking operations, while it contributed directly to the creation of foreign exchange markets. The institutional framework of the operation of banks was created on the basis of Western European models. Foreign banks entered in all bank markets, bringing with them financial know-how, sophisticated IT application, investment resources, and more advanced risk-assessment methods.