The impact on the banking system from the accession of Macedonia in the EU

The aim of this paper is to examine the impact on the banking system from the accession of Macedonia in the EU. EU enlargement is a complex process with enormous impact on the economy of the new member countries. The financial system of the new member country, and the banking system as a part of it, faces with the challenge of integration in the EU financial system. The best evidence of the EU accession impact on the banking system is the analysis of the basic characteristics of banking systems on the countries that became members in the last 20 years. The future banking development in new EU member countries will very likely follow some main patterns known from the old EU members. In a way banks from candidate countries can see their own future by observing the current developments in Western European banking. The process of restructuring in the banking system through consolidation which lead to increased concentration was one of the main drivers of changes. The existence of this process in new EU countries will be examined together with the structure of Macedonian banking system. It is important to examine whether significant efficiency improvements were achieved in the banking systems of the new EU countries and are they result from the bigger market power or some other factor. Also, there were changes in the funding sources of the banks from the new EU countries with a lot of potentials for alternative funding possibilities. The financial crises made these potentials to evaporate, but on long term horizon, those opportunities will appear again. The low level of financial intermediation in new EU countries leaves space for increasing the range of financial services and their scope. Associated with the previous, a further enlarge of the market share on non-bank financial intermediaries in new EU members can be expected.