, fluctuations in domestic equity market and the dynamics of the economic cycle come across as important and statistically significant factors. Both equity market and bankingsector, if they are expected to contribute to economic performance at either micro- or
Kozaric , K. – Begovic , S. ( 2018 ): The BankingSector in the Selected South-Eastern Europe Countries in 2016 . In: Garonna , P. – Delneri , F. – Seganti , F. (eds): The Role of Banking, Insurance and Finance. Draft for Discussion. Report
Authors:Małgorzata Iwanicz-Drozdowska and Bartosz Witkowski
1 Introduction In many emerging markets, foreign capital penetration in the bankingsector is high. As of 2014, assets in post-communist Central, Eastern and South-Eastern Europe (CESEE), varied from approximately 30% (Belarus, Slovenia, and Ukraine
of Hungary as well.
In computing the WACL, I took a bankingsector level approach, that is, I used the monetary statistics provided by the central banks and calculated different proportions of liabilities for the whole bankingsector
banks to their FSIs built on the micro banking data. Similar weights for bankingsector and house market subindices in the financial cycle indicator were estimated by Kota – Saqe (2013) , as well as for subindices in Albulescu (2010) . Additionally
. (2012) , Alifano et al. (2019) also investigated the ORX database, but for a more recent period, and found that in the bankingsector, four governance sub-indices had significant negative effects on the loss amounts.
hit by the shocks. The situation of the bankingsector and the specific economic structure (e.g., the size of the tourism sector) of the MSs add to the risk of structural divergence. This could weaken and fragment the EU's single market