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Eastern Europe is
engaged in a massive programme of financial reform and has made
considerable progress in restructuring its banking sector and
integrating it into the international financial system. In Discussion
Paper No. 603, Programme Director Colin Mayer and Research Fellow
Jenny Corbett argue that Eastern Europe's policy-makers have
failed to address some of the most basic issues involved in the
relationship between the financial system and the enterprise sector.
They maintain that the reforming economies need not adopt financial
systems of the UK or US type in order to achieve the successful
privatization of their state enterprises; they may have much to learn
from `insider' methods of corporate control, as found in Germany and
Japan. There has been inadequate consideration of the choices available,
and it is far from clear that Eastern Europe is currently proceeding
with the right model. |