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

By Michael G. Spencer, H. J. Blommestein

October 1, 1993

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Format: Chicago

Michael G. Spencer, and H. J. Blommestein The Role of Financial Institutions in the Transition to a Market Economy, (USA: International Monetary Fund, 1993) accessed December 23, 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

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

Publication Details

Pages:

50
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1993/075
Stock No:

WPIEA0751993
ISBN:

9781451849653
ISSN:

1018-5941

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