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Structure of Monetary Assets in Transition Economies: Financial Innovation and Structural Transformation

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  • Gérard Duchêne

    (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Ramona Jimborean

    (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)

  • Boris Najman

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, GRATICE - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)

Abstract

Using a panel data set we investigate the specificities of the structure of monetary assets in transition economies. This analysis reveals the main factors standing behind the structure of deposits held with banks (demand or time deposits), as well as the determinants of the trade-off between cash and demand deposits in Central and Eastern European Countries and in Former Soviet Union countries. We show that the strong preference for cash, which appears in transition countries, is related to the extent of the informal sector, to the low efficiency of the banking sector as well as to the massive currency substitutions. The relatively high share of time deposits compared to demand deposits is due to the inefficiency of the banking system and to the low level of development of alternative financial markets.

Suggested Citation

  • Gérard Duchêne & Ramona Jimborean & Boris Najman, 2006. "Structure of Monetary Assets in Transition Economies: Financial Innovation and Structural Transformation," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00270544, HAL.
  • Handle: RePEc:hal:cesptp:hal-00270544
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    2. Francisco J. Callado-Muñoz & Jana Hromcová & Natalia Utrero-González, 2014. "Effects of Institutional Environment and Technology Development on Payment Choice," Working Papers wpdea1403, Department of Applied Economics at Universitat Autonoma of Barcelona.

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