Systemic Requirements for Monetary Stability in Eastern Europe and the Former Soviet Union

Author/Editor:

Jacek Rostowski

Publication Date:

February 1, 1994

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The primary function of banks during economic transformation is seen to be provision of an efficient payments mechanism. The lack of banking skills, particularly in credit allocation, is seen as the major problem in stable monetary systems. This is a problem which can be expected to last many years. The solution is to limit banks to very safe assets (initially central bank liabilities). Combining such safe banks with a monetary rule would provide stable monetary systems during transition.

Series:

Working Paper No. 1994/024

Subject:

Banking Central banks Commercial banks Currencies Financial institutions International reserves Monetary base Monetary systems Money

English

Publication Date:

February 1, 1994

ISBN/ISSN:

9781451920987/1018-5941

Stock No:

WPIEA0241994

Pages:

24

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