The Socialist Banking System in Albania and in Yugoslavia: Two Extremes within the European Socialist Bloc

Absztrakt

The paper compares two different banking systems – and their political background – within the former European socialist sphere; namely the banking system of Albania and Yugoslavia.
Based on the relevant literature, the paper provides a comparative overview of the two financial sectors, showing that two completely different systems emerged within the socialist bloc. According to the analysis, although the development of the two countries diverged, the banking sector legacy of both countries could be considered similar by the end of the socialist time period, meaning that basically the same challenges had to be addressed during the transition process. This also underpins the concept that generally only fundamental changes could lead to sustainable economic systems. Furthermore, we highlight that the development of the successor states’ banking sector followed a similar path during the transition period, whereas the Slovenian system became an outlier to a certain extent.

Keywords: banking sector, economic history, socialism, Albania, Yugoslavia