"... In PAGE 51: ... This is primarily because the employer pension schemes and extra-statutory sick pay are extremely common among public sector establishments, thereby limiting the worth of any analysis of voice effects. Employer pension schemes Just over half (55 per cent) of all private sector establishments with 10 or more employees provided a pension scheme to members of the largest occupational group within their workforce in 1998 ( Table7 ). This compared with over nine tenths (93 per cent) of all establishments in the public sector.... In PAGE 57: ... In neither case were the positive effects of these forms of representation large enough for us to reliably say that they increased the odds of provision for uncovered occupations. Extra-statutory sick pay Two thirds (60 per cent) of all private sector establishments with 10 or more employees provided sick pay in excess of statutory requirements to members of the largest occupational group within their workforce in 1998 ( Table7 ). As with the provision of pensions, there was no significant difference in the provision of extra-statutory sick pay between private sector establishments engaged in manufacturing or services and, again, non-manual occupations were more likely to enjoy provision than non-manual groups.... ..."

"... In PAGE 7: ... In particular, as suggested by Holzmann (1997) benefits to financial-market development arising from funding (as set out in Section 5) may provide a major boost to economic growth. The current level of funding in EU countries is indicated by the assets/GDP ratios shown in Table7 . These show that only in Denmark, Ireland, the Netherlands and the UK, and to a lesser extent in Sweden, do private funded pensions make a major contribution to retirement income provision.... In PAGE 9: ... They apparently accept the view that in the medium to long term some shift to funding is inevitable in the light of the unsustainable benefit promises of existing social security schemes, and are thereby already boosting the institutionalisation of capital markets. Table7 indicates the enormous scope of pension- fund asset accumulation which would be involved if EU countries were to converge on US13 levels of funded pension provision (itself somewhat below that obtaining in the Netherlands and the UK). 4 The structure of EU financial markets In the light of the above-mentioned grounds for anticipating future growth in pension funding, be it formal or informal , in this section we briefly introduce some of the stylised differences in financial structure across EU countries, also providing where possible comparable data for the US, Japan and Canada.... ..."

"... In PAGE 11: ... I thus obtained historical estimates of per capita income from Maddison (1995). Telephone penetration and state/private provision Table1 shows 1914 worldwide telephone penetration statistics, including whether the government, private firms, or both provide telephone service.3 The United States had by far the highest penetration rate in the world.... ..."

"... In PAGE 18: ... Domestic credit. The majority of bank assets are in low-risk domestic and foreign securities and placements ( Table1 0, Appendix I). Commercial bank loans represent less than one-third of banks apos; total assets.... In PAGE 20: ...4 and percent; and deposit rates low, 3.24 percent ( Table1 2, Appendix I). Although a record low since 1993, the average lending spread (about 9 percent in 1999) is still high by international standards.... In PAGE 20: ...X z inflation. The banking sector earnings Z Basic interestrate Interbankr during 1997-99 ( Table1 3, Appendix I) - - -Short-ter credits -Time rdepositse depended on noninterest income since the high operating expenses added as nmuch as 6 percent to the cost of funds in large state banks, exceeding the net interest income of the sector. Spreads are expected to decline further as competition increases with privatization; reserve requirements are lowered in June 2000 from 11 to 8 percent; and, as some of the large banks start to expand their business services and products, especially to the retail-consumer banking areas.... In PAGE 21: ...unctions. Total risk-weighted capital adequacy increased from 10.2 percent in June 1997 to 41.8 percent by December 1999 ( Table1 4, Appendix I). After the large-loan loss provisions made in 1997 and 1998, the average pretax profit on total assets soared from about 0.... In PAGE 23: ... Of the total banking sector assets, state banks hold close to 54 percent, Bulgarian national banks 4 percent, and foreign shareholder banks or branches about 39 percent. As Table1 below indicates, state ownership of banking sector assets is still among the highest in the region, second only to Romania (75 percent) and far above Estonia (7.8 percent), Latvia (8.... In PAGE 23: ...ercent), Latvia (8.5 percent) and Hungary (11.8 percent). But this picture is likely to change dramatically with the privatization of two of the largest state-owned banks, Bulbank and Biochim, by the end of 2000. Table1 : Privatization in the Banking Sector in Selected Countries in Europe Comparision with Central and Eastern European Countries 1998 Asset share of Asset share of Number of Of which state-owned foreign-owned banks majority banks (%) banks (%)* foreign- owned Belarus 59.5 2 37 3 Bulgaria1 59.... In PAGE 24: ...The bulk of the banking system is in the hands of 12 banks, five of which are state-owned. The top 12 banks hold 85 percent of banking sector assets, 87 percent of total deposits and 80 percent of total loans ( Table1 7, Appendix I). The largest bank is Bulbank, the forner foreign trade bank, with a 27 percent market share.... In PAGE 25: ... Overall, the banking sector is gaining credibility As of December 1999, the Bulgarian banking sector has high solvency and liquidity. Overall, risk-weighted capital adequacy under IAS is about 42 percent ( Table1 4, Appendix I), far above the required 10 percent. Classified loans (below standard) have declined to 13.... In PAGE 25: ...bove the required 10 percent. Classified loans (below standard) have declined to 13.8 percent of total loans from 17.6 percent at the end of 1997 ( Table1 1, Appendix 1). The majority of the past earnings have been used to build up loan loss provisions.... In PAGE 31: ... The estimates for total market capitalization for the listed companies are about 1.1 billion BGN ( Table1 7, Appendix I). The value of the shares not held by the Government and available for the trading on the BSE is estimated at about half this amount.... In PAGE 52: ...Table1 0: Commercial Banks Indicators 1995 1996 1997 1998 1999 Number of commercial banks 44 47 34 34 35 Assets (BGN million) 1,087 3,631 7,361 7,594 8,186 Assets (US$ billion) 15.4 7.... In PAGE 53: ...Table1 1: Domestic Credit Real, end ofperiod (BGN 1995 1996 1997 1998 1999 thousand) Domestic credit 634,674 488,594 184,001 149,836 141,353 BGN 415,917 159,618 37,098 48,185 35,890 Foreign exchange 218,757 328,976 146,903 101,650 105,463 Claims on government sector, net 283,354 219,045 58,805 18,070 5,205 BGN 212,949 102,618 3,727 -7,863 -28,142 Foreign exchange 70,405 116,427 55,077 25,934 33,348 Claims on non-financial public sector 161,238 112,489 44,923 33,519 23,787 BGN 96,577 23,141 12,044 10,632 7,208 Foreign exchange 64,661 89,348 32,879 22,887 16,579 Claims on Private Sector 190,082 157,060 80273 98,247 112,361 BGN 106,391 33,859 21,327 45,417 56,825 Foreign exchange 83,691 123,201 58,946 52,830 55,536 Memo items: Domestic credit as % of GDP 67.4 61.... In PAGE 54: ...Table1 2: Interest Rates (end of period) (Annualized %)34 1995 1996 1997 1998 1999 Base interest rate 38.59 342.... In PAGE 54: ...89 8.87 Source: Bulgarian National Bank and World Bank staff estimates Table1 3: Income Statement of the Banking Sector (in million BGN) 1997 1998 1999 Interest income 777 469 451 Interest expenses 547 144 130 Net interest income 229 325 321 Gains or losses on securities 4 -157 -20 Trading and revaluation on foreign exchange 1,388 -19 124 Comnmissions and fees 63 99 171 Loan loss provisions -1,107 -336 -10 Income before Operating Expenses 578 585 606 Operating Expenses 267 375 394 Income before Extraordinary Items 311 210 212 Other financial revenue 247 -21 0 Extraordinary income 7 17 75 Income before Taxes 565 206 286 Net income 369 129 207 Source: Bulgarian National Bank 34 Annualized interest rates are based on monthly weighted averages. 35 Marginal spread is calculated as (l+il)/(l+id)-l.... In PAGE 55: ...Table1 4: Capital Adequacy of Commercial Banks L. Major Banks] 11.... In PAGE 56: ...Table1 5: Actual and Theoretical Provisions in the Banking Sector 1997 1998 1999 Dec Mar Jun Sep Dec Mar Jun Sep Dec Loans (million BGN) 3,806 3,898 4,119 4,541 5,849 5,903 4,428 4,944 5,042 Standard (in percent) 78.8 80.... In PAGE 57: ...Table1 6: Size and Ownership Structure of the Banks, September 1999 Rank Total Assets Equity by assets in BGN niillion State-Owned Banks Bulbank 1 2,102.2 258.... In PAGE 58: ...Table1 7: Banking Sector Ranking: The Top Dozen Bank Assets Bank Loans Bank Deposits (BGN (BGN (BGN milli mmillion) 1 Bulbank 2102.2 1 State Saving Bank 518.... In PAGE 59: ...Table1 8: Bulgarian Stock Exchange Official Market Free Market Block Segment A Segment C Trade Market No. of Market No.... In PAGE 62: ... The associate governments are also allowed to mix the sequencing of the Stage 1 and 2 measures if necessary. Table1 attached to the appendix lists these directives. The directives chosen for the first stage are those which introduce the basic principles for the establishment of the financial institutions while the measures in the second stage aim in particular to strengthen the prudential regulation to bring the credit institutions up to prescribed EU standards.... ..."