Banking transition progress, foreign bank market entry and economic development: The case of Serbia

In Serbia and other South Eastern European Countries (SEE) financial sector transition started late. In Central and Eastern Europe (CEE), better developed financial systems already translate into faster growth through channelling savings into productive investments. What are the lessons from progress in the CEE financial sector for South Eastern Europe, in particular Serbia? We provide an overview of banking reform in transition countries, draw lessons in financial sector reform for policy makers, bank supervision and market participants, and compare and apply the evidence from bank restructuring in CEE to the current situation in Serbia and Montenegro.