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Banking reform in transition countries

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  • Stijn Claessens

Abstract

An important debate about financial reform in transition economies is whether or not governments should try to rehabilitate existing state-owned banks or allow a new or parallel banking system to emerge. A comparison of institutional development of banks in twenty-five transition countries suggests that more rapid progress can be made with the entry of new banks as opposed to rehabilitation, especially relative to initial conditions. In most countries, however, a cadre of weak banks still exists. Regression estimates suggest that the progress of these weak banks is inhibited by poor troubled-bank intervention, preferential treatment and limited entry.

Suggested Citation

  • Stijn Claessens, 1998. "Banking reform in transition countries," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 2(2), pages 115-133.
  • Handle: RePEc:taf:jpolrf:v:2:y:1998:i:2:p:115-133
    DOI: 10.1080/13841289808523377
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    Cited by:

    1. Giovanni Ferri, 2008. "Banking In China: Are New Tigers Supplanting the Mammoths?," Working Papers 052008, Hong Kong Institute for Monetary Research.
    2. David A Grigorian & Vlad Manole, 2006. "Determinants of Commercial Bank Performance in Transition: An Application of Data Envelopment Analysis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(3), pages 497-522, September.
    3. Lino Sau, 2012. "Evolution of China's financial system and its impact on economic development," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 5(1), pages 1-15.
    4. Park, Albert & Brandt, Loren & Giles, John, 2003. "Competition under credit rationing: theory and evidence from rural China," Journal of Development Economics, Elsevier, vol. 71(2), pages 463-495, August.
    5. Delis, Manthos D & Staikouras, Panagiotis, 2009. "On-site audits, sanctions, and bank risk-taking: An empirical overture towards a novel regulatory and supervisory philosophy," MPRA Paper 16836, University Library of Munich, Germany.
    6. Montes-Negret, Fernando & Papi, Luca, 1997. "The Polish experience with bank and enterprise restructuring," Policy Research Working Paper Series 1705, The World Bank.
    7. Fleming, Alex & Lily Chu & Bakker, Marie-Renee, 1996. "The Baltics - Banking crises observed," Policy Research Working Paper Series 1647, The World Bank.
    8. Ferri, Giovanni, 2009. "Are New Tigers supplanting Old Mammoths in China's banking system? Evidence from a sample of city commercial banks," Journal of Banking & Finance, Elsevier, vol. 33(1), pages 131-140, January.
    9. repec:taf:rjapxx:v:14:y:2009:i:1:p:5-26 is not listed on IDEAS
    10. Patrick Honohan, 1998. "Diagnosing Banking System Failures in Developing Countries," Papers WP093, Economic and Social Research Institute (ESRI).

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    Keywords

    Transition Economies; Banking Reform;

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