Showing papers on "Financial sector development published in 2003"

Economic, demographic, and institutional determinants of life insurance consumption across countries

Abstract: Life insurance has become an increasingly important part of the financial sector over the past 40 years, providing a range of financial services for consumers and becoming a major source of investment in the capital market. But what drives the large variation in life insurance consumption across countries remains unclear. Using a panel with data aggregated at different frequencies for 68 economies in 1961-2000, this article finds that economic indicators such as inflation, income per capita, and banking sector development and religious and institutional indicators are the most robust predictors of the use of life insurance. Education, life expectancy, the young dependency ratio, and the size of the social security system appear to have no robust association with life insurance consumption. The results highlight the importance of price stability and banking sector development in fully realizing the savings and investment functions of life insurance in an economy.

Dollarization of the banking system : good or bad?

Abstract: De Nicol� Honohan, and Ize assess the benefits and risks associated with dollarization of the banking system. The authors provide novel empirical evidence on the determinants of dollarization, its role in promoting financial development, and on whether dollarization is associated with financial instability. They find that: The credibility of macroeconomic policy and the quality of institutions are both key determinants of cross-country variations in dollarization. Dollarization is likely to promote financial deepening only in a high inflation environment. Financial instability is likely higher in dollarized economies. The authors discuss the implications of these findings for financial sector and monetary policies.

How much do we really know about growth and finance

Abstract: During the past twenty-five years, development economists have made a major shift toward a more mainstream, market-oriented approach to the financial sector. Economists now take for granted that a well-developed financial sector contributes to economic growth. But until recently there was surprisingly little solid evidence to support this view. ; This article assesses the econometric evidence about the finance-growth relationship. The author first describes the regression framework that has become the standard for assessing this relationship. He outlines some methodological reservations about the evidence used to establish this consensus, pointing out the drawbacks of using aggregate measures of activity. ; Over the last decade, a large body of empirical work using this framework has provided results that relate different dimensions of financial sector development to economic growth. The observed relationships in these studies appear convincingly to be causal, from finance to growth, and not the result of simultaneity or reverse causality. However, the author points out, the literature has not yet adequately explained what happens when the financial sector deepens or how that deepening affects behavior and economic growth. ; Research so far provides policymakers little guidance about how best to develop the financial sector or about the optimal sequence of developments. But the next generation of research has already begun to delve into the "black box." The author discusses a few of these studies that attempt to show how financial deepening effects are transmitted into the real sector.

Financial Sector Development in Transition Economies: Lessons from the First Decade

Abstract: Broadly speaking, the role of the financial sector in all economies is to channel resources from primary savers to investment projects. The importance of this financial sector role has received much attention in the recent literature on economic growth. A strong consensus has emerged in the last decade that well-functioning financial intermediaries have a significant impact on economic growth. Modern economies have a wide range of market-oriented institutions for facilitating this process. In planned economies, this process was conducted by administrative arrangements and there were few market-oriented elements of the financial sector. The only ubiquitous financial institutions in the pretransition planned economies were banks, which acted as recordkeepers for the planning process and payment agents among state entities rather than as financial intermediaries. Although these banks had the appearances of real banks, they did not function as banks would in a market-oriented economy. Thus, the first step in the transition process for the financial sector is the development of market-oriented financial sector institutions. Given the unique problem faced by the financial sectors in formerly planned economies, many observers expected that the transition process would extend over many years. In fact, many transition economies have made remarkable process in the first decade of transition. Although financial sectors are far from perfect, the elements of market-oriented intermediation are already the rule rather than the exception throughout the transition world. Although banks are the most visible and often the dominant financial sector institutions, they are only one part of the process of financial intermediation. Financing arrangements that allocate resources in a market economy fall along a broad and long continuum. Financing starts with the entrepreneur, who collects the savings of friends and family, and extends to the large firm that raises capital in a variety of ways, ranging from the issuance of publicly traded

Financial Globalization: Gain and Pain for Developing Countries

Abstract: This paper discusses the benefits and risks that financial globalization entails for developing countries. Financial globalization can lead to large benefits, particularly to the development of the financial system. But financial globalization can also come with crises and contagion. The net effect of financial globalization is likely positive in the long run, with risks being more prevalent right after countries liberalize. So far, only some countries, sectors, and firms have taken advantage of globalization. As financial systems turn global, governments lose policy instruments, so there is an increasing scope for some form of international financial policy cooperation.

Finance and Income Inequality: Test of Alternative Theories

Abstract: Although theoretical models make distinct predictions about the relation between finance and income inequality, little empirical research has been conducted to compare their relative explanatory power. We examine the relation between financial intermediary development and income inequality in a panel data set of 91 countries for the period of 1960-95. Our results provide reasonably strong evidence that inequality decreases as economies develop their financial intermediaries, consistent with Galor and Zeira (1993) and Banerjee and Newman (1993). Moreover, consistent with the insight of Kuznets, the relation between the Gini coefficient and financial intermediary development depends on the sectoral structure of the economy: a larger modern sector is associated with a smaller drop in the Gini coefficient for the same level of financial intermediary development. However, there is no evidence of an inverted-U shaped relation between financial sector development and income inequality, as suggested by Greenwood and Jovanovic (1990). The results are robust to controlling for biases introduced by simultaneity.

Financial development and economic growth in India: 1970–1971 to 1998–1999

Abstract: This paper examines the causal relationship between financial development and economic growth in India for the period 1970–1971 to 1998–1999, using the techniques of unit root and cointegration analysis. The results show that, for the period under consideration, it is M3, representing financial sector development, which led GDP and not the other way around.

Financial and legal institutions and firm size

Abstract: The authors investigate how a country's financial institutions and the quality of its legal system explain the size attained by its largest industrial firms in a sample of 44 countries. Firm size is positively related to the size of the banking system and the efficiency of the legal system. Thus, the authors find no evidence that firms are larger in order to internalize the functions of the banking system or to compensate for the general inefficiency of the legal system. But they do find evidence that externally financed firms are smaller in countries that have strong creditor rights and efficient legal systems. This suggests that firms in countries with weak creditor protections are larger in order to internalize the protection of capital investment.

The finance growth nexus: Evidence from sub-saharan Africa

Abstract: The finance-growth linkage has been sharply debated in the literature since the pioneering work of Patrick (1966), McKinnon (1973), and Shaw (1973). This study extends the debate to a sample of eight emerging economies in Sub-Saharan Africa (SSA) using cointegration tests proposed by Johansen and Juselius, and causality tests based on error-correction model. The empirical results indicate each of the finan cial development indicators and economic growth are integrated of order one. In addi tion, cointegration test results show that the two series share a long-run equilibrium association in the seven of the eight countries, thus indicating the existence of a strong link between financial development and economic growth. Causality test results also indicate the preponderance of unidirectional causality from finance to growth in Ghana, Nigeria, Senegal, South Africa, Togo, and Zambia, and growth to finance in Ivory Coast and Kenya. In general, the results show that for the majority of the countries, the financial sector development appears to lead economic develop ment. The results have important policy implications for the finance and banking sec tor development of the countries in the region.

An Empirical Reassessment of the Relationship Between Finance and Growth

Abstract: This paper reexamines the empirical relationship between financial development and economic growth. It presents evidence based on cross-section and panel data using an updated dataset, a variety of econometric methods, and two standard measures of financial development: the level of liquid liabilities of the banking system and the amount of credit issued to the private sector by banks and other financial institutions. The paper identifies two sets of findings. First, in contrast with the recent evidence of Levine, Loayza, and Beck (2001), cross-section and panel-data-instrumental-variables regressions reveal that the relationship between financial development and economic growth is, at best, weak. Second, there is evidence of nonlinearities in the data, suggesting that finance matters for growth only at intermediate levels of financial development. Moreover, using a procedure appropriately designed to estimate long-run relationships in a panel with heterogeneous slope coefficients, there is no clear indication that finance spurs economic growth. Instead, for some specifications, the relationship is, puzzlingly, negative.

The finance-growth nexus and financial sector environment: New evidence from Southeast Europe

Abstract: Recent research has established a positive and causal link between financial development and economic growth in the long run. For this reason, financial sector reform has been regarded as conducive to faster growth in transition countries. In Southeast Europe, however, reform efforts in the first half of the 1990s failed to prevent inflationary finance in many countries, ultimately contributing to crises and large output losses. Only since the late 1990s, have tightened regulations and supervision as well as the opening of domestic banking sectors to foreign investors changed the environment of the financial sector in Southeast Europe positively. Our empirical evidence confirms that the improved quality of the financial sector and its environment has borne favourably on growth, more than financial deepening per se. Indeed, we do not find evidence of a positive impact of financial deepening on growth in the region. Conversely, together with macroeconomic stability, better creditor right protection and increasing foreign bank penetration are found to have a positive and significant impact on growth. JEL classification number: G21, G38, O16, P27 * ( ) European Central Bank and ( ) Ecares, Universite libre de Bruxelles. The paper builds on earlier versions presented at the KfW conference on “Innovative approaches to financial sector development in volatile environments”, Berlin, November 2002, and at the 9 Dubrovnik Economic Conference on “Banking and the Financial Sector in Transition and Emerging Market Economies”, Dubrovnik, June 2003. The authors are grateful to the conference participants, Roland Beck, Matthieu Bussiere, Francois Gurtner, Oscar CalvoGonzalez, Francesco Mazzaferro, Tomasz Michalski, Ralph Suppel, Franziska Schobert, Nikolaus Siegfried, Christian Thimann, Pierre van der Haegen and Andrea Wolfel for helpful comments on earlier drafts. Research assistance from Andre Geis and Calin Arcalean is gratefully acknowledged. The views expressed in the paper do not necessarily represent those of the European Central Bank. E-mail for correspondence: adalbert.winkler@ecb.int. Draft 20 October 2005

Three episodes of financial fragility in Norway since the 1890s

Abstract: This paper provides for the first time a comparative study of three major banking crises in Norway (1899-1905, 1920-28 and 1988-92), and presents financial and macroeconomic data spanning more than 130 years. Financial sector development appears to be closely linked to booms and busts in economic activity during these years. The boom periods that preceded each of the three crises all have some common features: they were characterised by significant bank expansion, considerable asset price inflation and increased indebtedness. The non-financial sector increased its debt only slightly more than its income during the first two boom periods, but subsequent deflation increased its debt burden. A puzzle in the two first boom periods was that the commercial bank equity-to-total assets ratio increased markedly. Nonetheless, the commercial banks were severely affected in the each subsequent bust. Possible explanations are provided, but this puzzle calls for more research. Altogether, a strong causal link between financial fragility and banking crises is suggested. The crises occurred in different institutional environments and monetary policy regimes, and the role of these is explored and policy lessons are drawn. In particular, the close link between monetary and financial stability is highlighted.

Flow of funds: implications for research on financial sector development and the real economy

Abstract: This paper provides a selective survey of the leading theoretical and empirical issues surrounding the flow of funds: its meaning and origin, problems of construction, and more particularly the key issues involved in financial modelling. It is argued that there is an intimate connection between the flow of funds, interest rate and asset price determination, and hence incomes and expenditures in an economy. The paper also explores the reasons for lack of success at empirical flow of funds modelling and proposes “promising research ideas” (PRIs) for future research on the relationship between financial sector development and the real economy, especially in order to identify effective financial sector policies for promoting poverty-reducing economic growth in low-income developing countries.

Capital account liberalization and financial sector development in transition countries

Abstract: Introduction The first decade of transition has seen remarkable progress in financial sector reform for the former-socialist countries of Central and Eastern Europe and the former Soviet Union, although this progress has been uneven across regions, countries and market segments. There have been significant achievements in the privatisation and restructuring of state banks in most (but not all) of these countrie s; there has been exit by failing institutions and entry and development of new domestic and foreign banks; there has been improvement in the legal, supervisory and regulatory framework, which has supported enhanced competition in the provision of banking services. However, even in the most advanced transition countries (including the eight likely early EU accession candidates from the region), the banking sector still lags behind best practice as regards the scale and scope of their provision of financial services. The level of bank intermediation between domestic savers and potential investors in the domestic real economy remains low. The menu of financial products and services offered by the banking sector remains restricted. Even in the most advanced countries of the region much more needs to be done in order to achieve a fully functioning and efficient banking sector (Fries and Taci 2002). The relative underdevelopment of the banking sector in transition countries is not compensated for by a strong non-bank financial sector or by thriving capital markets. If anything, the degree of underdevelopment of capital markets and non-bank financial institutions is greater than that of the banking system (Claessens, Djankov and Kliengebiel 2001). Enhancing financia l stability and reducing the vulnerability of financial systems remain key challenges for all countries in transition. The importance of meeting this challenge, both from the point of view of savers looking for a superior risk-return trade-off and from the point of view of domestic enterprises looking for external sources of finance, cannot be over-emphasised. The integration into the international capital markets that has progressed significantly in some transition countries, especially in the EU accession candidates, reinforces the importance of building strong, stable and efficient domestic financial markets and institutions. The strengthening of the domestic financial sector, particularly the banking sector-the main vehicle for the intermediation of both domestic and international financial flows now and for the foreseeable future-is essential if these countries are to gain the benefits and withstand the risks associated with large, and potentially volatile, gross and net cross-border capital flows. Without …

Globalization and national financial systems

Abstract: The volume is divided into five traditional areas of finance: the macroeconomy, banking, securities markets, pension issues, and regulations. Four cross-cutting messages emerge. First, the erosion of national frontiers by trade, tourism, migration, and capital account liberalization means that residents of all countries have substantial financial assets, and often liabilities denominated in foreign currencies at home or abroad. Any analysis of national financial systems must take this into account. More important, this factor constrains governments' use of macroeconomic and financial policy and may contribute to economic fluctuations. Second, individuals and firms benefit substantially from the improved risk and return menu associated with global diversification. Diversification is of particular importance in developing countries where the lack of size and diversity of the national economy results in instability in the value of production. Third, the small size of most developing countries limits the efficiency and quality of financial services: banking, equity markets, and pensions. Thus cross-border provision of financial services, one facet of globalization, has potential benefits for small economies. Fourth, taking full advantage of the opportunities presented by globalization and minimizing its costs depend on effective regulation and supervision to ensure good quality information, transparency, market integrity, and prudent investing by banks and pension funds.

Financial Sector Development - Futile or Fruitful? An Examination of the Determinants of Savings in Sri Lanka

Abstract: Using dynamic econometric techniques the paper investigates the determinants of private saving in Sri Lanka with a primary focus on the role of financial sector development. Empirical evidence is obtained indicating the existence of the Ricardian equivalence hypothesis, and the significance of credit constraints on private saving. Most significantly, an index of financial sector development variables is constructed, based on measures of the relative size of the financial sector, the absolute size, and the activity of financial intermediaries. The index is found to have a significant positive influence on the level of private saving, giving support to the hypothesized nexus between saving and financial sector development.

FDI Spillovers, Financial Markets, and Economic Development

Abstract: This paper examines the role financial markets play in the relationship between foreign direct investment (FDI) and economic development. We model an economy with a continuum of agents indexed by their level of ability. Agents can either work for the foreign company or undertake entrepreneurial activities, which are subject to a fixed cost. Better financial markets allow agents to take advantage of knowledge spillovers from FDI, magnifying the output effects of FDI. Empirically, we show that well-developed financial markets allow significant gains from FDI, while FDI alone plays an ambiguous role in contributing to development.

Financial Development in the CIS-7 Countries; Bridging the Great Divide

Abstract: This paper documents the great divide in the level of financial development between the Commonwealth of Independent States (CIS) 7 countries and the more advanced economies in transition, in particular those of Central and Eastern Europe and Baltic states. It discusses the roots of financial underdevelopment in the CIS-7 countries by examining the differentials in interest rate spreads between the CIS-7 countries and the transition economies that have achieved faster financial development. The roots of the divide are traced to weaknesses in the institutional infrastructure for financial intermediation, which lead to a combination of low depositor trust in the banking system and high credit risk. High credit risk stems mainly from the poor creditor-rights protection and weak auditing and accounting standards. Financial sector reform strategies that fail to give priority to the resolution of weaknesses in the basic financial infrastructure are unlikely to be successful in letting the CIS-7 countries bridge the great divide.

Financial Infrastructure, Group Interests, and Capital Accumulation: Theory, Evidence, and Policy

Abstract: This study presents a theory of financial infrastructure - or the set of rules, institutions, and systems within which agents carry out financial transactions. It investigates the effects of financial infrastructure development on financial architecture and real capital accumulation, taking into account financial-sector special interests. It shows that a more developed infrastructure promotes financial market growth, reduces the scope of traditional banking, and helps investors make more efficient investment decisions. The theory presented explains why traditional banking predominates in the early stages of economic development and becomes relatively less important as the economy develops, and why banks may retard financial sector development. The study provides evidence in support of its predictions.

Finance and Income Inequality: Test of Alternative Theories

Abstract: Although theoretical models make distinct predictions about the relation between finance and income inequality, little empirical research has been conducted to compare their relative explanatory power. We examine the relation between financial intermediary development and income inequality in a panel data set of 91 countries for the period of 1960-95. Our results provide reasonably strong evidence that inequality decreases as economies develop their financial intermediaries, consistent with Galor and Zeira (1993) and Banerjee and Newman (1993). Moreover, consistent with the insight of Kuznets, the relation between the Gini coefficient and financial intermediary development depends on the sectoral structure of the economy: a larger modern sector is associated with a smaller drop in the Gini coefficient for the same level of financial intermediary development. However, there is no evidence of an inverted-U shaped relation between financial sector development and income inequality, as suggested by Greenwood and Jovanovic (1990). The results are robust to controlling for biases introduced by simultaneity.

Capital Liberalization in Transition Countries: Lessons from the Past and for the Future

Abstract: Capital account liberalization in the transition phase - an overview, Age Bakker, Bryan Chapple. Part one - policy issues and earlier experiences: advanced country experiences with capital account liberalization, Age Baker sequencing capital account liberalization and financial sector stability, Stefan Ingves managing capital account liberalization - the experience of Indonesia, Malaysia, Korea and Thailand, Yung Chul Park, Chi-Young Song recent codes-based liberalization in the OECD, Eva Thiel capital account liberalization and financial sector development in transition countries, Willem Buiter, Anita Taci. Part two - transition country experiences: capital account liberalization in Ukraine, Anatolii Shapovalov capital account liberalization experiences in Armenia, Vache Gabrielyan, Armine Khachatryan capital flows and capital account liberalization in Croatia, Boris Vujcic the liberalization of the capital account in Hungary - experiences and lessons, Roger Nord capital account liberalization and financial market reform in the Republic of Moldova, Veronica Bacalu capital account liberalization in Poland, Ewa Sadowska-Cieslak.

Financial Sector Reforms and Savings Mobilization in Zambia

Abstract: The paper explores the relationship between financial sector reforms and savings mobilization in Zambia. Although there exists an extensive literature on financial sector development and savings levels in developing countries, there does not seem to exist satisfactory work on the above nexus for sub-Saharan African countries, particularly Zambia. Along these lines, the paper examines the linkages between the financial reforms of the early 1990s and savings mobilization. It considers the characteristics of banks and non-bank financial institutions, especially micro finance institutions, and savings levels and identifies problems associated with the relatively poor performance of savings in recent years and concludes with a set of policy guidelines for strengthening savings mobilization, highlighting the expected effect on povertyreducing growth.

Finance and income inequality : test of alternative theories

Abstract: Although theoretical models make distinct predictions about the relationship between financial sector development and income inequality, little empirical research has been conducted to compare their relative explanatory power. The authors examine the relation between financial intermediary development and income inequality in a panel data set of 91 countries for the period 1960-95. Their results provide evidence that inequality decreases as economies develop their financial intermediaries, consistent with the theoretical models in Galor and Zeira (1993) and Banerjee and Newman (1993). Moreover, consistent with the insight of Kuznets, the relation between the Gini coefficient and financial intermediary development appears to depend on the sectoral structure of the economy: a larger modern sector is associated with a smaller drop in the Gini coefficient for the same level of financial intermediary development. But there is no evidence of an inverted-U-shaped relation between financial sector development and income inequality, as suggested by Greenwood and Jovanovic (1990). The results are robust to controlling for biases introduced by simultaneity.

Local Government Finance, Private Resources, and Local Credit Markets in Asia

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Savings and Financial Sector Development: Panel Cointegration Evidence from Africa

Abstract: The present paper uses panel integration and cointegration tests for a dynamic heterogeneous panel of 17 African countries to examine the impact of financial sector development on private savings. We used three different measures of financial sector development to capture the variety of channels through which financial structure can affect the domestic economy. The empirical results obtained vary considerably among countries in the panel, thus highlighting the importance of using different measures of financial sector development rather than a single indicator. The evidence is rather inconclusive, although in most of the countries in the sample a positive relationship between financial sector development and private savings seems to hold. The empirical analysis also suggests that a change in government savings is offset by an opposite change in private savings in most of the countries in the panel, thus confirming the Ricardian equivalence hypothesis. Liquidity constraints do not seem to play a vital role in most of the African countries in the group, since the relevant coefficient is negative and significant in only a small group of countries.

Loan processing costs and information asymmetries : implications for financial sector development and economic growth

Abstract: The paper presents a model in which credit-constrained firms might delay the adoption of new and more productive technologies because of the very high external financing costs they face. Our point of departure is that the efficiency of the banking system can have a profound impact on real resource and investment allocation not only directly, by reducing the amount of resources channelled to the credit market, but also indirectly by affecting entrepreneurs’ investment decisions. Along these lines of reasoning we develop a model of information asymmetries in the credit market in which high costs of processing bank loan applications might obstruct investments in high-tech projects and favour, instead, low-return, self-financed investments in mature sectors. The result is that these kinds of costs have a negative impact on the average capital productivity and on the rate of economic growth. In specific circumstances, the combination of these

Structural Challenges for Europe

Abstract: Part 1 Structural reforms and competitiveness - where does Europe stand today?: the European strategy for economic and social modernization, Maria Joao Rodrigues structural reforms - where does Europe stand today?, Jorgen Elmeskov structural reforms and competitiveness - will Europe overtake America?, Jan Svejnar an agenda for global economic growth - European challenges, Randall S. Kroszner. Part 2 Financial sector development: banking sector development in the Czech Republic, Zdenek Tuma foreign direct investment - the impact of foreign banks in Central and Eastern Europe, Herbert Stepic the banking system in the accession countries, Marianne Kager. Part 3 Financing of enlargement and catching up: the financial aspects of enlargement, Michaele Schreyer financing of enlargement and catching up, Ewald Nowotny catching-up and the growth factors - the state of play in Bulgaria, Mariella Nenova twin deficits - implications of current account and fiscal imbalances for the accession countries, Jarko Fidrmuc. Part 4 Social security reform: pension reform - what lessons from Italy?, Daniele Franco adjusting welfare systems to aging populations - challenges and experiences in OECD countries, Willi Liebfritz the quest for modern pension system design, Marek Gora the impact of international migration on welfare and the welfare state in an integrated Europe, Herbert Brucker. Part 5 Taxes and benefits/fiscal structures: fiscal policy challenges of EU accession for the Baltics and Central Europe, George Kopits and Istvan P. Szekely tax structures in transition economies in a comparative perspective with EU member states, Rumen Dobrinsky taxation in the European Union - the harmonization issue, Roger Guesnerie assessing the smoothing impact of automatic stabilizers - evidence from Europe, Jesus Crespo-Cuaresma et al. Part 6 Enterprise sector reform/network industries: the case of privatization of network utilities, Willem Buiter and Maria Vagliasindi foreign direct investment in CEECs and the position of the electricity, gas and water distribution sector, Gabor Hunya the role of foreign direct investment in Poland's enterprise sector reform, Danuta Jablonska. Part 7 The adequate policy mix: trajectories towards the euro and the role of ERM II, Tommaso Padoa-Schioppa and adequate macroeconomic policy mix in EMU?, Torben M. Andersen exchange rates and long-term interest rates in Central Europe - how do monetary and fiscal policy affect them?, Franz Schardax. Part 8 Looking into the future - Europe's position in the world economy in 2020: introductory remarks - the keys to a successful future of EMU, Gert Jan Hogeweg Europe in 2020 - globalization challenge and/versus regional responses?, Elena Kohutikova the "new Europe" -looking ahead to 2020, Richard Webb.

Arab Financial Sector Development and Institutions

Abstract: Arab countries like other developing countries have embarked on financial sector reforms since the early 1990s. The purpose of this study is to discuss and shed some light on the Arab countries’ financial sector institutional reform and their implications for economic development. The Arab financial sector reforms experience demonstrated that institutions have a vital role in and have positively influenced the process of Arab financial sector liberalization. It also emphasized the notion that strong and effective institutional reforms are very important ingredients for the success of financial sector reforms. For the most part, financial sector reforms have already brought about significant improvement in monetary and credit aggregates in many Arab countries. Financial sector reform has certainly had a noticeable impact on the cost of intermediation: real interest rates and gross interest margins. However, there is room for even more improvement in the coming years as competition enhancing measures and administrative costs reduction interventions are adopted.