The Development of Universal Banking in Lithuania

Article type: Research Article

Authors: Kraujalis, Šarūnas

Affiliations: Kaunas University of Technology, Economics and Management Faculty, Department of International Economics and Trade. E-mail: s.kraujalis@ub.lt

Abstract: The integration of Lithuania to the European Union increases openness of its economy and gives an impulse to create financial and legal system aligning with the leading European countries. The universal German banking market conditioned more universality in Lithuanian banking system. Initially securities and insurance business was partly restricted for banks in Lithuania, but restrictions are gradually diminishing. Formation of universal banking system in Lithuania raises a question: is the choice of universal banking under conditions of complicated economical situation and the weak legal basis right? This paper analyses the main positive and negative effects of commercial banks expansion into securities and insurance market. This paper discusses how should universal banks be supervised to ensure stability and reasonable profitability of banking activities.

Keywords: universal banking, investments, securities market, insurance market, non-traditional banking activities

DOI: 10.3233/INF-2001-12403

Journal: Informatica, vol. 12, no. 4, pp. 509-518, 2001