Banking Sector Transformation and Monetary Policy in the Visegrád Countries

The early-1990s mark the beginning of considerable reforms of the financial systems in the former Czechoslovakia, Hungary and Poland on their way from centrally planned to market economies. In the meantime, these so-called Visegrád countries have been increasingly integrated into the international financial markets. Striking indicators are currency convertibility, liberalized capital movements and a shift from fixed to flexible exchange rate regimes. A major task of the post-socialist countries was the design of a viable banking system and the introduction of monetary policy strategies allowing monetary impulses to be channelled effectively through the permanently changing financial and real sectors.
The book concentrates on the transformation of the Visegrád countries" banking sectors and their monetary policy actions during difficult stages of economic transition. Special focus is on whether restrictive monetary impulses have been mainly transmitted via the bank loan volume or via relative prices. This question, which is discussed for established market economies being economically stable in comparison to post-socialist countries, is analysed theoretically and empirically.