The Hungarian banking system 20 years after modernisation

Introducing the two-tier banking system in 1987 was a pivotal step in modernising the Hungarian economy. For the last two decades the Hungarian banking industry has significantly changed regarding ownership, institutional and market structures. The quality of financial services has considerably improved. Financial deepening has taken place as a result of organic developments as well as government policies. Bank clients have, no doubt, gained a lot in terms of quality and price of services. However, as international comparisons of market efficiency demonstrate, elimination of oligopolistic market structures in retail banking should further enhance consumer welfare