THE IMPACT OF ADMINISTRATIVE AND LEGAL MECHANISMS ON THE STABILITY AND ADAPTATION OF THE FINANCIAL SYSTEMS OF EU COUNTRIES: A COMPARATIVE ANALYSIS OF POLAND AND BULGARIA
THE IMPACT OF ADMINISTRATIVE AND LEGAL MECHANISMS ON THE STABILITY AND ADAPTATION OF THE FINANCIAL SYSTEMS OF EU COUNTRIES: A COMPARATIVE ANALYSIS OF POLAND AND BULGARIA

Summary/Abstract: This article examines how administrative and legal mechanisms influence the stability and adaptability of financial systems in European Union (EU) member states, through a comparative analysis of Poland and Bulgaria. Using a doctrinal and comparative legal research approach, it analyzes the role of supervisory institutions, financial legislation, EU law transposition, and national crisis-response strategies in shaping financial system resilience. Both qualitative and quantitative data – including macroeconomic indicators, legal frameworks, and case studies from the 2008 global financial crisis and the COVID-19 pandemic – are used to evaluate outcomes in Poland and Bulgaria. The study finds that Poland’s financial system has benefited from proactive supervision, a flexible monetary regime, and timely legal reforms, enabling it to avoid recession during the 2008 crisis and to weather COVID-19 with limited instability. Bulgaria’s financial system, in contrast, has faced greater volatility due to a rigid currency regime and past institutional weaknesses, suffering a sharp contraction in 2009 and a significant banking scandal in 2014. However, Bulgaria’s commitment to strict fiscal discipline and accelerated integration with EU mechanisms (such as Banking Union membership in 2020) has improved its adaptive capacity. The comparative analysis highlights best practices – including robust deposit insurance, coordinated financial oversight, and macroprudential safeguards – as well as legal gaps and challenges such as foreign-currency lending risks and cross-border supervisory coordination. It concludes with practical legal and policy recommendations to enhance financial stability and resilience in EU member states through strengthened governance, comprehensive regulatory frameworks, and adaptive crisis management mechanisms.

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