POST-Emergency Open doors FOR Focal ASIAN BANKS.


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POST-Emergency Open doors FOR Focal ASIAN BANKS Presentation of Istvan LENGYEL Secretary General Saving money Relationship for Focal and Eastern Europe Focal ASIAN BANKS AND THE Emergency Two altogether different examples of pre-emergency improvement
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POST-CRISIS OPPORTUNITIES FOR CENTRAL ASIAN BANKS Presentation of Istvan LENGYEL Secretary General Banking Association for Central and Eastern Europe

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CENTRAL ASIAN BANKS AND THE CRISIS Two altogether different examples of pre-emergency advancement Kazakhstan: overabundance to expansive scale remote subsidizing of the biggest banks, boorowing-driven forceful techniques, high advances to-stores proportion (at the top more than 200%, high pre-emergency development rates (2006: +96% p.a.) Other Central Asian countries:Lower development rates, more constrained access to outside obtaining, lower LTD (Kyrgyzstan - September 2008: 104%) BUT: SUBSTANTIAL DIFFERENCES BETWEEN COUNTRIES BELONGING TO GROUP 2 (Kyrgyzstan, Tajikistan, Turkmenistan)

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CENTRAL ASIAN BANKS AND THE CRISIS LESSONS OF THE CURRENT CRISIS MACROECONOMICS: in this emergency, nations with more shut economies were hit less BUT by implication (through diminishing workers’ settlements, trade income) the emergency likewise came to moderately shut economies - BANKING SYSTEM: moderately little size of the keeping money framework was another favorable position banks depending more on local financing endured less BUT universal turbulences, apprehension of issues in banks additionally spread to banks which appeared to be generally confined from world budgetary markets DECISIVE ROLE OF THE STATE AND BANK REGULATORS IN AVOIDING LARGE-SCALE PANIC

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WHAT HAVE WE LEARNT (HOPEFULLY)? Cutting edge world is very interconnected and interrelated Information spreads with staggeringly fast (Is Hungary the following Iceland?) Events are driven by right or off base data Markets are driven by avarice and trepidation Markets are not productive Self-regulation does not work Deregulation makes new air pockets (is China the following one?) STILL With legitimate arrangements, money related control and self-confine of outside acquiring, nations may offset business sector strengths

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PERSPECTIVES OF CENTRAL ASIAN BANKS STRATEGIC STARTING POINT – WHERE SHOULD WE GO? Traditional standards of managing an account are not dead The emergency was the consequence of overlooking these standards Learning procedure by CEE/CIS banks ought not stop But rather Critical comprehension of Western banks’ experience is required Western banks ought to additionally gain from us

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STRATEGIC PROBLEMS AND POSSIBLE ANSWERS LOW CAPITALISATION 2. Absence OF LONG-TERM FUNDING SOURCES Recapitalisation from local sources, state intercession, outside proprietorship INCREASED ROLE OF INTERNATIONAL FINANCIAL INSTITUTIONS Pension change, extra security, Bausparkasse framework IFIs, intergovernmental stores PERSPECTIVES OF CENTRAL ASIAN BANKS

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3. Lavish DOMESTIC FUNDING 4. LOW PROFITABILITY, DIFFICULTIES IN BUILDING UP CAPITAL, INVESTING IN BRANCH NETWORK DEVELOPMENT, IT AND OTHER SYSTEMS 5. Absence OF TAILORED DEPOSIT AND LOAN PRODUCTS 6. LOW LEVEL OF RISK MANAGEMENT Proper macroeconomic arrangements, sensible budgetary strategy, backing of reserve funds, store protection Cheaper subsidizing, expense productivity, control over resource quality, preparing Product advancement, preparing Investment in RM, staff preparing TRAINING OF THE MANAGENT AND THE SHAREHOLDERS PERSPECTIVES OF CENTRAL ASIAN BANKS

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PERSPECTIVES OF CENTRAL ASIAN BANKS TRAINING IS OF KEY IMPORTANCE IN DEVELOPING THE BANKING SECTOR IN CENTRAL ASIA A CRITICAL APPROACH IS NEEDED THE GOAL OF THE TRAINER SHOULD BE TRANSFER OF EXPERIENCE, KNOWHOW AND KNOWLEDGE ALWAYS TAKING INTO CONSIDERATION LOCAL EXPERIENCE AND KNOWLEDGE (Should ex-Lehman brokers show hazard administration?)

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SUMMARY CENTRAL ASIAN BANKS HAVE UNIQUE OPPORTUNITIES OF DEVELOPMENT THEY MAY AVOID REPEATING PROBLEMS COMMITTED BY THEIR PEERS IN THE REGION AND IN THE WEST TO REALIZE GROWTH OPPORTUNITIES, SUPPORT OF THE GOVERNMENT, THE CENTRAL BANK AND INTERNATIONAL FINANCIAL INSTITUTIONS IS NEEDED BANKS SHOULD INVEST (MAYBE JOINTLY WITH THE GOVERNMENT) IN THE EDUCATION OF CLIENTS CLOSE CO-OPERATION WITH THE PRESS IS ALSO NEEDED TO PROVE THAT BANKS ARE SOCIALLY USEFUL, RESPONSIBLE INSTITUTIONS!

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