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07 October 2003

BdB: Banking markets in central and eastern Europe - Baltic countries

The significant progress made in the Baltic banking markets was a crucial condition for the convergence with the EU member states that has been achieved to date, the paper states. Price stability, low interest rates and continuing economic growth, as well as the still relatively small size of the banking sector promise continued high growth potential for these markets.

Against the backdrop of rising real income, retail business should become increasingly important, particularly as the Estonian, Latvian and Lithuanian pension systems are based to a considerable extent on private capital formation. On top of this, joining the EU next year should make the Baltic countries that extra bit attractive for foreign investors. Funds will continue to be provided largely by foreign investors and businesses. This should at the same time induce more foreign banks to move into the Baltic region and further stimulate competition among the financial markets there. Document

© Graham Bishop

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