POLAND – The European Central Bank says it expects pension funds to develop over time in the European Union’s new member states.

ECB board member Sirkka Hamalainen told a conference on banking in the enlarged EU that pension funds would emerge as a result of “legislative and regulatory” developments.

“Legislative and regulatory changes are also likely to affect the savings behaviour of households over time and give rise to new forms of savings such as pension funds,” she said.

She said that the pressures facing financial institutions in the accession countries are “very similar to those in the EU, namely mergers and acquisitions, modifications of business strategies and product innovation”.

“Moreover, the EU and the acceding countries are highly interrelated from an institutional perspective,” she added – noting that some of the EU’s largest banks hold majority stakes in many acceding country financial institutions.

“However, banks in the acceding countries continue to operate in a somewhat distinct environment,” Hamalainen said. “Capital markets and the insurance industry are far less developed and competition from these sectors is much less intense.”

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