Banking, International Capital Flows and Growth in Europe : Financial Markets, Savings and Monetary Integration in a World with Uncertain Convergence

Paul J.J. Welfens and Holger C. Wolf While the economies of Asia and, more recently, South as well as North America have enjoyed sustained high growth, the growth performance of western Europe and in particular continental Europe has been rather modest. Coupled with sizable improvements in labor productivity and - at best - steady capital productivity, growth proved insufficient to sustain employment levels, much less to replicate the US job creation success. Relative inflation performance has been much better: in the run-up to European Monetary Union inflation rates have dramatically converged towards the lower end of the distribution while risk premia on formerly high inflation economies have fallen. Yet, looking forward, the undoubted success in achieving price stability is mitigated by the lackluster growth -and in particular employment -performance. Indeed, the relative little attention paid to initiatives directed at raising economic growth is startling, not only in the light of the US policy record but also in light of the remarkable rebound of those European economies which have aggressively tackled the structural problems, most prominently the UK and Ireland. Front Matter....Pages I-XIII Front Matter....Pages 1-1 Introduction....Pages 1-13 Front Matter....Pages 15-15 Banks, Capital Markets, R&D and Economic Growth in Europe....Pages 17-80 Policy Options for Prudential Supervision in Stage Three of Monetary Union....Pages 81-119 Banking, Privatization and Economic Growth in Russia....Pages 121-141 Historical Lessons of Foreign Banking in Eastern Europe The Case of Tsarist Russia....Pages 143-165 Restructuring and Privatization of Polish Banks....Pages 167-182 High Public Debt: Consequences for Investment and Growth....Pages 183-215 Front Matter....Pages 217-217 Banking, Foreign Investment, Endogenous Growth and Systemic Transformation....Pages 219-262 Capital Flows in Eastern Europe: Some Lessons from the Emerging Markets in Latin America and Asia....Pages 263-295 Catching Up of Economies in Transformation....Pages 297-316 Savings, Credit Markets and Economic Growth in Europe....Pages 317-351 US Multinationals and Europe: An Update....Pages 353-377 Multinational Investment and Economic Growth in Eastern Europe....Pages 379-412 Front Matter....Pages 413-413 Recent Developments in the Hungarian Financial Sector....Pages 415-425 The Present Situation of the Banking Sector in the Transition Countries....Pages 427-430 Back Matter....Pages 431-458

While international capital flows are rising, the role of banks in the economy is changing and sk markets in OECD and eastern European countries play an increasing role for financing investment and innovation. Economic catching up of eastern Europe, European Monetary Union and problems of economic convergence are some of the issues discussed in this volume. Theoretical as well as empirical analyses of savings, private and public investment, and portfolio shifts are presented from a comparative perspective, covering Europe, Asia, Latin America and the US. Prudential supervision, banking issues and monetary integration are topics analyzed in theoretical and economic policy terms.

While international capital flows are rising, the role of banks in the economy is changing and stock markets in OECD and eastern European countries play an increasing role for financing investment and innovation. Economic catching up of eastern Europe, European Monetary Union and problems of economic convergence are some of the issues discussed in this volume. Theoretical as well as empirical analyses of savings, private and public investment, and portfolio shifts are presented from a comparative perspective, covering Europe, Asia, Latin America and the US. Prudential supervision, banking issues and monetary integration are topics analyzed in theoretical and economic policy terms