Financial Development in the CIS-7 Countries; Bridging the Great Divide
This paper documents the great divide in the level of financial development between the Commonwealth of Independent States (CIS) 7 countries and the more advanced economies in transition, in particular those of Central and Eastern Europe and Baltic states. It discusses the roots of financial underdevelopment in the CIS-7 countries by examining the differentials in interest rate spreads between the CIS-7 countries and the transition economies that have achieved faster financial development. The roots of the divide are traced to weaknesses in the institutional infrastructure for financial intermediation, which lead to a combination of low depositor trust in the banking system and high credit risk. High credit risk stems mainly from the poor creditor-rights protection and weak auditing and accounting standards. Financial sector reform strategies that fail to give priority to the resolution of weaknesses in the basic financial infrastructure are unlikely to be successful in letting the CIS-7 countries bridge the great divide.
|Date of creation:||01 Oct 2003|
|Date of revision:|
|Contact details of provider:|| Postal: International Monetary Fund, Washington, DC USA|
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
|Order Information:||Web: http://www.imf.org/external/pubs/pubs/ord_info.htm|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gianni De Nicolo & Patrick Honohan & Alain Ize, 2003.
"Dollarization of the Banking System; Good or Bad?,"
IMF Working Papers
03/146, International Monetary Fund.
- De Nicolo, Gianni & Honohan, Patrick & Ize, Alain, 2003. "Dollarization of the banking system : good or bad?," Policy Research Working Paper Series 3116, The World Bank.
- Shih, Michael S. H., 2003. "An investigation into the use of mergers as a solution for the Asian banking sector crisis," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(1), pages 31-49.
- Drakos, Kostas, 2003. "Assessing the success of reform in transition banking 10 years later: an interest margins analysis," Journal of Policy Modeling, Elsevier, vol. 25(3), pages 309-317, April.
- Klapper, Leora & Sarria-Allende, Virginia & Sulla, Victor, 2002. "Small and medium size enterprise financing in Eastern Europe," Policy Research Working Paper Series 2933, The World Bank.
- Erik Berglof & Patrick Bolton, 2001.
"The Great Divide and Beyond: Financial Architecture in Transition,"
William Davidson Institute Working Papers Series
414, William Davidson Institute at the University of Michigan.
- Erik Berglof & Patrick Bolton, 2002. "The Great Divide and Beyond: Financial Architecture in Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 77-100, Winter.
- Berglöf, Erik & Bolton, Patrick, 2003. "The Great Divide and Beyond - Financial Architecture in Transition," CEPR Discussion Papers 3476, C.E.P.R. Discussion Papers.
- Ennis, Huberto M. & Keister, Todd, 2003.
"Economic growth, liquidity, and bank runs,"
Journal of Economic Theory,
Elsevier, vol. 109(2), pages 220-245, April.
- Cerasi, Vittoria & Daltung, Sonja, 2000.
"The optimal size of a bank: Costs and benefits of diversification,"
European Economic Review,
Elsevier, vol. 44(9), pages 1701-1726, October.
- V. Cerasi & S. Daltung, 1995. "The Optimal Size of a Bank: Costs and Benefits of Diversification," Departmental Working Papers 1995-05, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
- Saunders, Anthony & Schumacher, Liliana, 2000. "The determinants of bank interest rate margins: an international study," Journal of International Money and Finance, Elsevier, vol. 19(6), pages 813-832, December.
- Rafael La Porta & Florencio Lopezde-Silanes & Andrei Shleifer, 2000.
"Government Ownership of Banks,"
NBER Working Papers
7620, National Bureau of Economic Research, Inc.
- Rafael La Porta & Florencio Lopez-deSilanes & Andrei Shleifer, 2000. "Government Ownership of Banks," Harvard Institute of Economic Research Working Papers 1890, Harvard - Institute of Economic Research.
- La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2001. "Government Ownership of Banks," Working Paper Series rwp01-016, Harvard University, John F. Kennedy School of Government.
- Demirguc, Asli & Laeven, Luc & Levine, Ross, 2003. "The impact of bank regulations, concentration, and institutions on bank margins," Policy Research Working Paper Series 3030, The World Bank.
- Simeon Djankov & Peter Murrell, 2002.
"Enterprise Restructuring in Transition: A Quantitative Survey,"
Journal of Economic Literature,
American Economic Association, vol. 40(3), pages 739-792, September.
- Djankov, Simeon & Murrell, Peter, 2002. "Enterprise Restructuring in Transition: A Quantitative Survey," CEPR Discussion Papers 3319, C.E.P.R. Discussion Papers.
- Demirguc, Asli & Huizinga, Harry, 1999.
"Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence,"
World Bank Economic Review,
World Bank Group, vol. 13(2), pages 379-408, May.
- Demirguc-Kunt, Asli & Huizinga, Harry, 1998. "Determinants of commercial bank interest margins and profitability : some international evidence," Policy Research Working Paper Series 1900, The World Bank.
- Anthony M. Santomero & John J. Seater, 1999.
"Is There an Optimal Size for the Financial Sector,"
Center for Financial Institutions Working Papers
98-35, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Santomero, Anthony M. & Seater, John J., 2000. "Is there an optimal size for the financial sector?," Journal of Banking & Finance, Elsevier, vol. 24(6), pages 945-965, June.
- Gianni De Nicolo, 2000. "Size, charter value and risk in banking: an international perspective," International Finance Discussion Papers 689, Board of Governors of the Federal Reserve System (U.S.).
- Stanley Fischer, 2001. "Ten Years of Transition: Looking Back and Looking Forward," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 1.
- Steven Fries & Damien Neven & Paul Seabright, 2002.
"Bank Performance in Transition Economies,"
William Davidson Institute Working Papers Series
505, William Davidson Institute at the University of Michigan.
- Paul Wachtel, 2003. "How much do we really know about growth and finance?," Economic Review, Federal Reserve Bank of Atlanta, issue Q1, pages 33-47.
When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:03/205. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow)or (Hassan Zaidi)
If references are entirely missing, you can add them using this form.