**Table 6: Key Elements of the Banking Institutional Framework 1/**

||**_Date crisis_**<br>**_(distress)_**<br>**_peaked_**|**_Date of_**<br>**_introducton of_**<br>**_prudential_**<br>**_regulations and_**<br>**_supervision (date_**<br>**_offurther_**<br>**_tightening)21_**|**_Date BIS CAR_**_3/_<br>**_(8%)enteredin_**<br>**_force (date_**_of_<br>**_increase)_**|**_Date_**<br>**_LMSin_**<br>**_force_**_4/_|**_Current_**<br>**_minimum_**<br>**_capital_**<br>**_requirement_**_5/_|**_1998 EBRD_**<br>**_Ranking_**_of_<br>**_extensiveness_**<br>**_(effectiveness)_**_of_<br>**_financial laws_**<br>**_and_**<br>**_regulations_**_6/_|
|---|---|---|---|---|---|---|
|**Bulgaria**|1996-1997|1997 (1998)|1993(1998:10%;<br>1999:12%)|1998|USD_5.9_ml|4(4-)|
|**Czech Republic**|1991-1993<br>1996- 1997|1995 (1998)|1996|NA|USD 16.8 mln|3 (3-)|
|**Hungary**|1992<br>1995-1996|1993 (1996)|1992|1996|From<br>USD 100,000<br>to 9.8 mln|4 (4)|
|**FYR Macedonia**|1994-1996|NA (1998)|1993|1996|From<br>USD 4.2 min to<br>12.6 mln|3 (3-)|
|**Poland**|1992-1993|1993-1994 (1998)|1993a/|1994|ECU_5 mln_|4 (3)|
|**Latvia**|1995-96|1996 (1999)|1994 (1999:10%)|1992|ECU_5 mln_|3 (3)|
|**Lithuania**|1995-96|1997 (1999)|1996(1997:10%)|1997|ECU5mln|3-_(2+)_|
|**Estonia**|1992; 1994|1997|1994 (1997:10%)|<br>1995|ECU 5 mln|3 (3)|
|Georgia|1995-1997||1996 (1999:12%)|Propose<br>d date<br>12/2000|USD 2.8 min<br>(for new banks)|2 (2)|
|**Kazakhstan**|1994-1996|NA|NA|1997|From<br>USD 0.5 mln to<br>USD 3 mln|2 (2)|
|**Kyrgyz Republic**|1994-1996|1996 (1999)|1995(1999:12%)|1997|From USD<br>850,000<br>to1.4 mln|3- (2)|
|**Ukraine**|1995; 1996-<br>1998|1996 (1998)|NA|1998|ECU I min|2+ (2)|

_Notes._ a/ In 1999 CAR was raised for some banks. For banks that were operating prior to 1993, CAR remained at 8%, and for newer banks it was raised to 15% during the first year of operations, and to 12% in subsequent years of operation. 1/ For detailed explanation of the regulations and their comparison with the BIS and EU standards see Appendix Table 2.

2/This refers to the dates of the introduction or tightening of one or more of the following prudential regulations (for details see Appendix Table 2): capital adequacy requirement, large credit exposure limit, liquidity requirement, open foreign exchange exposure limit, loan classification and provisioning requirements, limits on equity holdings in nonfinancial enterprises, and limits on connected lending.

3/ This is the Capital Adequacy Ratio standard set by the Bank for International Settlements.

4/ IAS is International Accounting Standard. Source: EBRD Transition Reports.

_5/_ Expressed in USD equivalent of local currency at end- 1998 market exchange rate, or in ECU if requirement is expressed in ECU and not in local currency. Where there is only a single number, it refers to minimum capital requirements for banks only. Where there is a range of numbers, they refer to minimum capital requirements for either different types of financial institutions or ownership - for details see Appendix Table 2.

6/ The EBRD rankings are on a scale from I to 4.

However, the extensiveness of prudential regulations does not guarantee compliance. A 1998 EBRD survey found that transition economies had a better record for the extensiveness of financial laws and 14