Financial service markets of Eastern Europe: a compositional model
Financial service markets of Eastern Europe: a compositional model

Summary/Abstract: The article deals with the models of functioning of financial service markets in the countries of Eastern Europe. The authors have conducted an analysis of the development of financial institutions within separate segments of relevant markets, such as deposit, credit, insurance and investment. The analysis shows that banking institutions play a significant role in the economic development of the countries of the selected group and makes it possible to determine the peculiarities of the development of their financial service markets. In view of the similarity between such countries, the obtained research results can be taken into account when considering other states that have chosen a similar path of their own economic development. The results allow us to partially predict future transformations in the financial service market of Ukraine by taking into account virtually identical starting conditions for the development of Eastern European countries in the early 1990s. This assumption is also confirmed by the changes that have already taken place in Ukraine in view of the functioning of the country’s banking system, which has led to a decrease in the number of banks and an increase in their financial stability. This is consistent with the development of banking systems in other Eastern European countries. This allows us to assert that there is gradual convergence of the functioning of the banking systems of both Eastern European countries and Ukraine. A detailed analysis of the transformations in the banking system gives reason to state that in the future the same changes are expected in other segments of the financial service market. In Ukraine, the markets of insurance services, services of non-state pension funds and investment companies remain poorly developed. The transformation of the relevant segments of the financial services market is a prerequisite for its further development.

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