Original scientific paper

The effects of prudential policy measures on financial stability in post-transition countries

Mario Pečarić orcid.org/0000-0003-3214-5231 ; Faculty of Economics, University of Split, Split, Croatia; Faculty of Economics, University of Rijeka, Rijeka, Croatia
Josip Visković orcid.org/0000-0002-8797-1496 ; Faculty of Economics, Universty of Split, Split, Croatia

Abstract

The empirical research of prudential measures effectiveness is still scarce, especially for central and southeast European countries. The aim of this paper is to analyze the effects of prudential policy on financial stability of post-transition bank-oriented countries using panel data analysis approach. Using the sample of central and southeast European countries for the period 1998 – 2010, we found that these measures generally reduce the level of non-performing loans, increase the level of profi tability, partially affect banking system liquidity, but do not improve credit to deposit ratio. We point out two main conclusions: (1) prudential measures positively affect banking system stability expressed through financial stability indicators; (2) prudential measures represent important instrument of a central bank orchestra.

Keywords

Prudential measures; monetary controls; financial stability; bankoriented financial systems; panel data analysis

Hrčak ID:

104179

URI

https://hrcak.srce.hr/104179

Publication date:

21.6.2013.

Article data in other languages: croatian

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