Western Financial Markets Offer Choices for the East

  • Peter R. Haiss
Part of the European Economic Interaction and Integration book series (EEIIWP)


During the first wave of financial market reform, the old monolithic banking systems in East Europe were broken into two-tier structures, and various schemes were devised to create capital markets. Boffito (Ch. 4) and Calvo/Kumar (Ch. 5), among others, argue that structural reform of the financial sector must continue. The role which the capital markets are supposed to play in the reforming countries, especially in the context of enterprise restructuring, however, is controversial (Schmidt-Chiari 1993). For the second stage of reform, Calvo/Kumar and Boffito advocate equity markets in preference to commercial banks for efficient capital supply for enterprises. Given the current economic and structural features of these economies, it is argued below that priority should instead be given to the creation of a universal banking system. Implications of an answer to this issue are of importance to foreign investors (progress in company restructuring and privatisation), banks (progress and type of financial sector reform) and banking supervision (priority of reforms).


Capital Market Central Bank Banking System Mutual Fund Institutional Investor 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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© Wiener Institut für Internationale Wirtschaftsvergleiche (WIIW) (The Vienna Institute for Comparative Economic Studies) 1995

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  • Peter R. Haiss

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