The Banking Sector'S Ownership Structure In The Post-Yugoslav Countries

The primary aim of the research is to highlight the common features of the banking sector's ownership structure in the post-Yugoslav states. Since the breakup and transition of the Socialist Federal Republic of Yugoslavia, all countries applied different sequencing and methods regarding the banking sector's reform process. During the transition period of the financial sectors, the Slovenian case could be considered as an outlier until 2018 within the analysed group of countries. Nevertheless, since 2018 a common template can be outlined for the sector's development, primarily from the ownership structure's point of view. Generally speaking, foreign-owned - primarily EU-headquartered - banks gradually became the dominant actors in the sector. By the end of 2018, the asset share of foreign-owned banks exceeded 60 percent in all of the reviewed countries. In some cases the foreign-ownership reached around 90 percent in terms of asset share. Parallel with this, the asset share of state-owned banks dropped below 35 percent in all countries. During the transition period, foreign-owned banks were able to provide new technology, management skills and financial resources. Despite their significant market concentration, they even stimulated market competition. On the other hand, during periods of negative economic shock waves, foreign-ownership became a double-edged sword. Since the 2008 global crisis, there is a continuous risk of potential negative spillovers from the subsidiaries to their parent banks and the other way around. In order to mitigate this risk, the home and host countries' supervisory and regulatory authorities try to enhance cooperation. The potential risk factors underline the importance of the ownership structure's analysis. As far as the methodology is concerned, the qualitative analysis is based on the respective literature on the impact of foreign-owned banks. The data on the banking sector's ownership structure is gained from the statistics published by the ECB, the EBRD and the respective central banks.