The Role of Financial Institutions in the Transition to a Market Economy

Author/Editor:

Michael G. Spencer ; H. J. Blommestein

Publication Date:

October 1, 1993

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:

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.

Series:

Working Paper No. 93/75

Subject:

English

Publication Date:

October 1, 1993

ISBN/ISSN:

9781451849653/1018-5941

Stock No:

WPIEA0751993

Format:

Paper

Pages:

50

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