The Role of Financial Institutions in the Transition to a Market Economy
October 1, 1993
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Summary
Financial institutions intermediate between savers and investors and contribute to corporate governance. Equity and bond markets in the former centrally planned economies are not yet in a position adequately to provide these services. It is not yet clear that investment funds will provide the necessary financing and corporate management. Therefore the first priority for financial sector reforms must be to establish a healthy commercial banking sector. Banks are the most promising source of financing, provide payment services which are crucial to both the real and financial sectors and, by monitoring the use of loaned funds, will be the primary source of corporate governance during the transformation to a market economy.
Subject: Banking, Commercial banks, Financial institutions, Financial markets, Privatization, Securities, Securities markets, Stock markets, Stocks
Keywords: banking system, capital base, capital structure, Central and Eastern Europe, central bank, commercial bank, Commercial banks, Eastern Europe, investment funds, public offering, risk capital, savings bank, secondary market, Securities, Securities markets, state enterprise, Stock markets, Stocks, WP
Pages:
50
Volume:
1993
DOI:
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Issue:
075
Series:
Working Paper No. 1993/075
Stock No:
WPIEA0751993
ISBN:
9781451849653
ISSN:
1018-5941
