Geographia Polonica (2000) vol. 73, iss. 1

Challenges of regionalism: development and spatial structure of the Hungarian banking system

Zoltan Gal

Geographia Polonica (2000) vol. 73, iss. 1, pp. 95-126 | Full text

Abstract

This paper is concerned with the spatial characteristics of the Hungarian bank-ing system. Financial services became the key sector in the processes of economic transfor-mation and one differentiated by uneven regional development. The spatial structure of the banking sector is characterised by a large-scale concentration in Budapest, but the foundation boom of branch offices is also typical in the regions, as the necessity of a presence on local markets, as well as competition for the retail market, stimulate banks to expand their branch networks. Commercial banks, which have their headquarters exclusively in Budapest, largely confine themselves to the collection of deposits in their national network, resulting in capital drainage and net capital loss from most of the regions. The presence of the centralised capital market and the lack of a decentralised regional financial system can restrain and slow down regional development in the long run.

Keywords: Hungarian banking system, transitional financial markets, banking network, global-local dichotomy, uneven regional development

Zoltan Gal, Centre for Regional Studies, Hungarian Academy of Sciences, University of Kaposvâr PO.BOX 199, 7601 Pecs, HUNGARY