Financial Systems in Transition: Is There a Case for a Bank Based System?

CEPR Discussion Paper No. 1062

Posted: 20 Dec 1998

Date Written: November 1994

Abstract

This paper looks at empirical evidence and economic theory in order to find some guidelines for building the institutions of a financial system. It argues that in the countries in transition, priority should be given to stimulating information generation about investment opportunities, and to ensuring substantial external evaluation of companies' potential. The actual evolution of financial systems in Central and East European countries shows, however, that banks are playing an increasingly important role, and that very close links are developing between the banking and the industrial sectors. If banks are to become not only privileged creditors, but also shareholders of firms, the information needed for efficient restructuring may become the victim of excessive commitment.

JEL Classification: G1, P34, P50

Suggested Citation

Grosfeld, Irena, Financial Systems in Transition: Is There a Case for a Bank Based System? (November 1994). CEPR Discussion Paper No. 1062, Available at SSRN: https://ssrn.com/abstract=5989

Irena Grosfeld (Contact Author)

Paris School of Economics ( email )

48 Boulevard Jourdan
Paris, 75014
France

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
1,176
PlumX Metrics