Özet:

The main objective of this article is to analyze the certain financial variables in order to have asses transmission effects of the EU debt crises on stability and efficiency of financial sector of Western Balkan (WB). Also, this study uses a cross-country comparison methodology and examines the following aspects: Capital adequacy, liquidity position and efficiency of the banking sector of the WB in pre crisis and crisis period as well as financial sector size, structure, and trends in financial developments for the WB region in pre crisis and crisis period. The paper is divided into six sections. Section 2 deals with the literature review. Section 3 contains an explanation of the data and methodology. Section 4 analyze trends in financial developments for the WB region. Section 5 gives an overview of the implications ofEU debt crises for WB financial system while the focus of the section 6 is on an analysis of changes in perceptions by European bank subsidiaries in WB countries in context of the European debt crisis. The findings and discussion presented in previous sections of this article ends with conclusions that impact of EU debt crises has been transmitted on the position banking sector of WB through several sources, especially through: decline in profitability, credit growth has dropped significantly and asset quality has deteriorated markedly.

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