Challenges of the Banking Integration Process in the Case of the New EU Member States

The creation of the single European market represents a 50 years long process which aims at developing the most advanced economy in the world. In order to achieve this, political actions must be accompanied by economical and juridical changes in order to stimulate and foster the creation of the single European market. A key component of this process is represented by the integration of the financial sector. While several component of it have registered major transformations and achievements in the integration process, one of the least integrated parts is represented by the European banking sector. Most of the European economies are funded directly through the banking sector, thus the integration of this sector represents a major benchmarks in the European integration process. This problem becomes more complex in the context of the European Union enlargement to 27 member states. Thus, the aim of this paper is to underline the progresses achieved by the banking sectors of the European Union new member states from Central and Eastern Europe in their integration process. In order to achieve this we will use an empirical analysis based on the Law of One Price, which will underline the progress made by the banking sectors of the panel countries: Poland, Czech Republic, Slovenia, Slovakia, Romania and Bulgaria. The results of the research will provide an overview of the main achievements registered by these countries, while also underling how national particularities of these sectors affect their integration.