Development of European Financial System: Challenges for the Balkan Countries Integration Process

The goal of this chapter is to point out the core changes in the development of the European financial system in the past several years. A number of factors have influenced these processes, such as: the aspiration of the European Union for increase in competitiveness of its own economy, negative effects of the first wave of the global economic crisis, its mutation and outbreak of the second wave coupled with problems of public debt of some EU member states, the crisis of common currency euro, etc. All changes in the EU have significant implications and create new challenges for the countries of the Western Balkans, which are undergoing different stages of the process of the European Union integrations. We shall observe occurrences in the European financial system in the three directions – through adopting new regulations, creating new institutions and rising ethical standards. Common characteristics for countries of the Western Balkans region are that they are at a lower level of economic development and overall competitiveness of economy, as well as less developed financial systems. The surveys we conducted have shown that they were more affected by the impact of the global crisis than many of the EU nations. Countries of the region have reacted differently to negative impacts from the global environment, mainly within the field of regulative adaptations. In that manner, they have followed up flows of regulatory reforms of the European financial system. However, in the fields of creating new institutions, rising of ethical standards and regional cooperation, the changes were taking place at much slower paste.