(L.A.) Volume (L.A.) PX50 (R.A.)  440  420 100 000 400  0  380  1994  1995  1996  1997  Number of Traded Shares  1998  1999  2000  2001  2002  1994 1995 1996 1997 1998 1999 2000 2001 2002 22 1024 1698 1628 300 283 181 142 100 79  In bond trading, the situation is slightly more optimistic. The volume traded is approximately eight times the size of share trading and there is much higher liquidity. Continuous increase in volume is mainly due to the issuance of new public debt. PSEPSE- Basic Data (Bonds) 2 000 000  1400  1 800 000  1350  1 600 000  1300  1 400 000  1250  1 200 000  1200  1 000 000  1150  800 000  1100  600 000  1050  400 000  1000  200 000  950  Marcet Cap. (L.A.) Volume (L.A.) PXD  900  0 1994  1995  1996  1997  Number of Traded Bonds  1998  1999  2000  2001  2002  1994 1995 1996 1997 1998 1999 2000 2001 2002 23 27 48 80 92 98 95 94 82 72  What will the future bring to capital markets? It is evident that with limited share trading, there is not a very rosy future ahead. There are discussions about merging the markets in the region and possibly joining some European Stock Exchange.
The majority of financial sectors are in foreign hands, well capitalized and well managed. Institutions from the EU are governing the largest financial institutions in the new member states. Introduction of the Single Passport policy will mean a change only de iure, not de facto. Foreign institutions that wanted to provide their services in the new member states are already present there. I do not expect any rush of new players to the new countries of the European Union. It is more probable that with increasing living standards of the population, the space for new financial products’ penetration will increase as well. I expect to see increased competition in this area, as already established institutions compete for new clients. It is unlikely that many new financial institutions will enter the market, because the market is already saturated, and players who had a strategic interest in Central Europe have already established themselves. Authorities from the new countries are already participating in committees and working groups established by the European Commission and European Central Bank, so that rules, as well as the policy thinking are being coordinated and harmonized. Challenges from the EU accession will therefore not represent any major risk.