Abstract
Thinking about the bad-asset problem, I recognised to my surprise that there were long-term contracts in state socialism. In particular, a banking system existed collecting private households’ savings and lending money to firms. However, money assets and liabilities did not reflect market relations. Savings banks, being branches of the East German Staatsbank, were not competing for deposits. On the other hand, the government controlled investment and allocated credits of firms according to devices of the plan.
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© 1997 Palgrave Macmillan, a division of Macmillan Publishers Limited
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Tomann, H. (1997). Options for Resolving the ‘Bad-Asset Problem’. In: Frowen, S.F., Hölscher, J. (eds) The German Currency Union of 1990. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-25368-5_6
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DOI: https://doi.org/10.1007/978-1-349-25368-5_6
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