ABSTRACT
Central and Eastern European banking and its perspectives fit into a longer-term and geographically much wider secular liberalization trend that has swept large parts of the world in the last three decades. Triggered by the catastrophic stock market and banking failures that ushered in the Great Depression of the early 1930s, liberal laissez-faire attitudes of the previous decade were abandoned and banking regulation and protective interventionism were stepped up by the authorities in many countries: Licensing was tightened and what we call today financial repression (including interest rate ceilings, credit controls, the official encouragement of cartels, restrictions on foreign bank entry, in some cases nationalization of banks) cosseted and guided the activities of credit institutions (Spong 1985: 20-21). Incidentally, at the end of the 1920s, the Soviet Union had abandoned its partially market-oriented New Economic Policy (Novaya ekonomicheskaya politika) and introduced socialist central planning (for the first time in history on a grand scale).
