Focus on Transition

Focus on Transition 2/1998


Editorial 
Recent Economic Developments
Developments in Selected Countries 
Maciej Krzak
Studies

Contagion Effects of the Russian Financial Crisis on Central and Eastern Europe: The Case of Poland 
Maciej Krzak
The purpose of this paper is to analyze the channels of contagion through which the Russian financial crisis affects Poland, which serves as a case of a Central European economy (CEE) in transition. The financial turmoil in Russia exerted a global impact. It affected countries with strong trade links with Russia such as CIS countries, with looser links such as the CEEs, but also countries with hardly any links to Russia such as Brazil, a seemingly puzzling pattern. Furthermore, the moratorium on payments on Russian domestic debt to commercial institutions sent jitters to financial markets in developed economies, spilling over to emerging markets, such as the CEEs. The paper explains in brief how this connection could come about. The common wisdom is that CEEs are vulnerable to the fallout of the Russian crisis because of their close ties with Russia. This paper attempts to cast some light on the potential magnitude of the impact by using Poland as an example. The major flaw of this analysis is that much of it is by nature speculative, since the crisis is not over yet. 

The 1998 Reports of the European Commission on Progress by Candidate Countries from Central and Eastern Europe: The Second Qualifying Round 
Sandra Dvorsky, Peter Backe« and Olga Radzyner
This study reviews the European Commission’s 1998 regular reports on the progress towards EU accession of the ten candidate countries from Central and Eastern Europe. The focus is on those issues which are of particular interest from a central bank viewpoint. Therefore, the study examines the reports’ accounts and assessments on monetary and exchange rate policies, (dis)inflation performance and preparations for integration into Economic and Monetary Union, with a specific focus on central bank independence and the liberalization of capital movements. This is complemented by a presentation and analysis of selected general issues related to methodology, the broad macroeconomic picture, the Commission’s overall assessments in the economic realm and its main recommendations.

Prudential Supervision in Central and Eastern Europe:
A Status Report on the Czech Republic, Hungary, Poland and Slovenia 
Michael Würz and Wolfgang Müller
This status report offers an overview of the progress the Czech Republic, Hungary, Poland and Slovenia have made in the implementation of twelve EU Directives on prudential supervision. The report is based on a survey carried out with the help of questionnaires sent to the four countries’ central banks in the summer of 1998.

After a brief summary of the general historical, economic and political background outlining the fundamental changes the banking and supervisory systems in transition economies have gone through, the report presents the makeup of supervisory systems in the countries under review. The main chapter contains a condensed description of the objectives of each EU Directive and the current state of implementation in the four countries surveyed. The report’s final chapters are dedicated to an overall assessment of the candidates’ progress towards legal convergence with EU secondary legislation on supervision and the Basle Core Principles. The main conclusion to be drawn is that above and beyond the serious efforts undertaken in recent years, further measures will be needed to overcome persisting shortcomings, especially in the field of consolidated supervision. 

OeNB Activities
Lectures organized by the Oesterreichische Nationalbank
Getting Things Done in an Anti-Modern Society – Richard Rose 
The Currency Board in Bulgaria:
An Assessment of the First Year of Operation – Ilian Mihov 
The Financial Crisis in Mexico – Lessons for Eastern Europe – Julio G. Lopez 
Banking Sector Restructuring: The Hungarian Case – Agnes Horvath and Balazs Zsamboki 
The World Investment Report – Zbigniew Zimny 
The "East Jour Fixe" of the Oesterreichische Nationalbank – A Forum for Discussion 
Between Inflation and Capital Inflows: Dilemmas of Monetary Policy
in More Advanced Transition Countries – Dariusz Rosati 
Russia – What Kind of a Market Economy? – Pekka Sutela 
Technical Cooperation of the Oesterreichische Nationalbank
with Central and Eastern European Transition Countries 

Statistical Annex
Compiled by Andreas Nader
Gross Domestic Product 
Industrial Production 
Unemployment Rate 
Consumer Price Index 
Trade Balance 
Current Account 
Total Reserves Minus Gold 
Central Government Deficit 
Gross Debt in Convertible Currencies 
Exchange Rates 
Discount Rates



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