Challenges of regionalism: development and spatial structure of the hungarian banking system
Abstract
This paper is concerned with the spatial characteristics of the Hungarian banking system.Financial services became the key sector in the processes of economic transformation and 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 presence on the local markets, as well as the competition for the retail market stimulate banks to expand their branch networks.Commercial banks, which have their headquarters exclusively in Budapest, largely concentrate only on the collections of deposits in their national network, resulting in capital drainage and net capital loss in most of the regions.The presence of the centralised capital market and the lack of decentralised regional financial system can restrain and slow down regional development in the long run.The paper is organised as follows.After the introductory section the spatial and structural characteristics and polarisation of the Hungarian banking system is discussed in the light of its progress made in the last ten years.This is followed by an analysis of a possible reorganisation and decentralisation of the spatial structure of banking at regional level without questioning the pre-eminent role of the national banking centre, but contributing to a more efficient operation of the network.
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