CEE, Europe, Financial sector, CASE Reports, CASE Network Studies and Analyses, transition economies

Comparing Financial Systems. Problems of Information and Control in Economies in Transition


An important literature is growing on financial reforms in the countries in transition: it is widely understood that putting in place well designed financial systems is a crucial element of structural reforms. The Central and East European Countries (CEEC) are painfully leaving behind the caricature of a Modigliani-Miller world: in the absence of capital market the performance of enteprises was determined by real variables, financial flows being adjusted to real flows. The lack of a full fledged financial system has often been identified as one of the main weaknesses of centrally planned economies.