Chapter 1.

The European Union. The European Economic Community (EEC) was established on 19-th States in 1957 for the creation of a single market. The objective was the liberalization of trade. For achievement of the given purpose was spent nearly three decades. The first step on the way to liberalize was the adoption in 1977 of the First banking Directive of the European community. In 1983, was carried out the second step to liberalization of the economic space. In 1989, was adopted by the Second banking Directive. It was the third step is for the liberation of the market of financial services. The declared accessibility (openness) of the banking sector in the European Union (EU) is actually «openness to his own»¹. Among the countries of the European Union there is another no less important trend is the active anti-monopoly policy. This policy found its expression in the prevention of «growing national Champions».

Let`s focus on the activity of foreign banks in the large countries of the European Union.

As we know, Germany is the economic engine of the Old world. Germany has always differed from other European countries. Deutsche Bank, Dresdner Bank, Commerzbank – there are the three «whales» of the German banking system, emerged in the second half of the 19th century, who played a major role in the industrialization of the country. For the banks in Germany there are two fundamentally important trends. From the very beginning of its establishment, the banks have started to establish close relations with corporate clients. This close link subsequently became the basis for the German model of corporate governance. Therefore, very often banks had a fairly large package of shares, which allowed banks to influence the adoption of decisions on the most important issues of the company, lobbying for their interests. The second important trend in Germany - is a high level of confidence of the local population to national banks. All of the above suggests that the banks from other countries it is difficult to compete with national banks. Most foreign banks in Germany are engaged in the financing of trade with their parent countries. It is clearly seen on the example of subsidiary structures of the countries of the Organization for economic cooperation and development. It made banks-non-residents turn to more expensive sources of funding. Naturally, in such conditions a foreign Bank through the creation of subsidiaries and/or affiliates to achieve a strong market position is quite ghostly development of the events.² In this case, virtually the only way to classes of market share is to buy a local, national Bank.

It can be concluded that, in Germany, the function of protectionist measures fulfill the existing institutional structure and system of corporate governance.

Move on the activity of foreign banks in the smaller countries of the European Union.

The situation in the smaller countries of the European Union (EU) is fundamentally different above described situation in the larger countries of the EU. Due to the fact that was created by the single European space the banks of the smaller countries were unable to make a serious competition to the banks of the big countries. The result of which was the expansion of the Bank's neighbors, and the national banks and the population of the smaller countries are perceived as the natural development of events. For today there are three variants of the policy of small States, relative to foreign banks.

The first option is that, with the support of the local authorities to help create large banks, which will be able to compete with already existing giants.

The second approach is the consent of the fact that the national banking system goes under control of foreign capital. When it declared the desire to increase the share of value added of Bank services. It is also necessary to understand, what is important is the Bank of a full-fledged structure, and not who owns the Bank.

The third approach was implemented Nordic countries of the European Union. The third method is the fact that the countries of the created market within the market, that is, tried to contribute to the unification of the banks to achieve an appropriate size to compete in the international arena. It can be also noted that the Nordic countries more than others follow the above rule «openness to his own».

However, if we talk about retail lending and loans to small and medium-sized business are at these levels is the principle of «openness to his own». Activities of foreign banks, as practice have shown, depending on the size.

Poland. The interest to this country from the part of domestic researchers is easy enough to explain. First, Poland is one of the most developed countries of Eastern Europe. In addition, it unites with Russia historical way of development in the twentieth century. Secondly, at the present time, Russia and Poland are increasingly considered to be competitors. However, we are not interested in how much the political aspects of the competition, and how much of the economic aspects, especially the way of attracting foreign investment in Central and Eastern Europe. At first glance, the Polish government has not any special policy. In the early 1990s, foreign capital began to attempt to enter the Polish market. Often foreign banks had bought a Polish Bank, experiencing financial difficulties, and tried to disinfect (a complex of measures in place to avoid bankruptcy). However, in reality it was not so simple and obvious. First of all, it should be noted that Poland has pursued a policy to prevent the creation of the branch of the system. Although the law does not prohibited to establish branches on the territory of Poland, in the period from 1992 to mid-2000s, has been granted is not a license to open branches. Inhibiting the branch network, the Polish regulator watched, so that the created subsidiaries were full-fledged banking institutions, and do not turn into bodies, whose main functions are deduced abroad. Furthermore, this policy was oriented to the depositors of Polish banks. Every Bank is to ensure stability, should comply with standards, limits, the ratio of assets and liabilities, invest in the less profitable projects, but, in exchange, the Bank is able to quickly respond and adapt to changing economic conditions.

Another distinguishing feature of the Polish`s approach is the preservation of state control over the largest Bank of Poland - PKO Bank. Thanks to this step decreases dependence from their parent banks is the lack of necessary funding from parent banks.

A lot of the other important characteristic of this policy can be considered as a requirement of the state regulator about listing a set of procedures for the admission of securities to circulation on the stock exchange in the procedure approved by the organizers of the trade) subsidiaries of foreign banks on the Warsaw stock exchange. This measure was introduced to prevent the «extinction» of the stock exchange, as it happened in Hungary.³ 

Summing up the policy of the Polish regulator, we can conclude that all of these measures have been taken to preserve the integrity and stability of the entire banking system, and the desire to create on the territory of the Warsaw regional financial center.

Turkey. Turkey today is a large and a developing country at the crossroads of Europe and Asia. In the 1980s began the reform of the banking industry.⁴ The closed type of the banking environment began to change at the open type, which is aimed at the attraction of foreign funds. Up to the end of the XX century the banking sector in Turkey was closed to foreigners, although the liberalization of the economy began in the 1980s. The crises of the early 2000s seriously had shaken the economic stability of the country. These crises have forced the government of Turkey to take a decision on the admission of foreign capital in the economy of the country.  In 2001, new laws were enacted in the banking sector. These laws are tightened requirements to the regulations: the level of capitalization, the ratio of loans and deposits and other. So the changes in the legislation made to the Central Bank of Turkey. After the innovations of the Central Bank became independent, and the main task was defined as the achievement and maintenance of price stability.

There was a change of the type of the exchange rate - the government of the Republic of Turkey «let go» of the exchange rate, and he was floating, which has had an impact on the liberalization of the economy as a whole.

Another reason for the international expansion of foreign capital is the fact, that Turkey - is a country in which there is almost of its own oil and gas reserves. This situation forced the government to stimulate the inflow of foreign capital to the country.

However, this is not all the measures, which has taken the Turkish leadership to create a favorable investment climate in the country. The Turkish leadership to ensure that purchased by foreigners banks do not turn into quasibranch (as already noted, the government of Poland carries out the same policy in respect of foreign banks), but remained a full-fledged banking structure. On a par with Poland, Turkey requires that the banks, which are dominated by foreign capital (for example, YapiKredi and Deniz), continued to be quoted on the Istanbul stock exchange.

Summing up, we can make a conclusion: after the opening of the national market, the Turkish government has helped create a favorable investment climate.