Sources of Financing Private Investment in East European Countries

Abstract: While the savings of enterprises still represent the main source of investment capital, the relative share of this source is decreasing over time and the role of banking credit as a source of private investment is increasing in the case ofthe Czech Republic, Slovakia and Poland, (while Hungary investment still rely on foreign sources and self-financing). One can conclude that the role of the banking system increases with the growing share of banking credit in private investments and consequently in these countries we can expect an increase of the banks' influence on industrial restructuring, since a growth of banking credits financing investment gives commercial banks more power to control and monitor enterprises.;