IMF Working Papers

Financial and Enterprise Restructuring in Emerging Market Economies

By Steven M. Fries, Timothy D. Lane

March 1, 1994

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Steven M. Fries, and Timothy D. Lane Financial and Enterprise Restructuring in Emerging Market Economies, (USA: International Monetary Fund, 1994) accessed November 21, 2024
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

This paper examines alternative approaches to building sound financial structures in emerging market economies. The foremost task is to resolve the bad loan problem and to recapitalize insolvent state banks. By restoring an incentive for banks to price accurately the risks of new lending, this effort would be an important first step in strengthening financial control. However, we argue that this endeavor is only part of the task at hand; the remainder is to provide financing that facilitates the economic restructuring of SOEs. A comprehensive strategy may involve combining discipline derived from enforcing existing loans to SOEs with adequate funding for new forms of ownership, including financing for enterprise sell-offs and leasing.

Subject: Bank credit, Banking, Distressed assets, Emerging and frontier financial markets, Financial institutions, Financial markets, Financial sector policy and analysis, Financial statements, Loans, Moral hazard, Public financial management (PFM)

Keywords: Central and Eastern Europe, Distressed assets, Emerging and frontier financial markets, Emerging market economy, Enterprise asset, Enterprise operation, Enterprise restructuring, Enterprise sector, Enterprise sell-off, Financial statements, Loans, Loss-making enterprise, Moral hazard, Owner-managed firm, WP

Publication Details

  • Pages:

    28

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1994/034

  • Stock No:

    WPIEA0341994

  • ISBN:

    9781451978858

  • ISSN:

    1018-5941

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