TRAMES, 2007, 11(61/56), 2, 155172



(full text in pdf format)


Kari Liuhto1, Olga Luštšik2, Mart Sõrg2, and Janek Uiboupin1


1Turku School of Economics, 2University of Tartu



Abstract. Our study examines organizational and sectoral developments in the Estonian banking sector. It can be concluded, that despite the unstable economic and legal environ­ment during the transition period, banking in Estonia has been much more profitable than in many developed countries. But at the same time the effectiveness of banking in a transition economy is volatile and the risk of bank failures risk is high. The Estonian banking sector is clearly dominated by foreign banks that have brought stability and modern banking techniques with them and increased the competitiveness of the market. We also prove that new electronical channels provide to are more cost-effective banks more cost saving than traditional channels and explain what the difference in the cost structure is.


Keywords: banking sector development, banking internationalization, electronic banking





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