Dealing with Financial Fragility in Transition Economies
30 Pages Posted: 19 Sep 2007
Date Written: December 30, 2004
We examine the efforts of transition economies to deal with financial fragility and resolve banking cries We characterize the birthing process of banking in transition and the three essential features of banking crises in transition economies:
(i) bad loans and the relationship to state owned industries, (ii) development of institutional infrastructure and (iii) credible commitments to resolution and privatization.
We then discuss the experiences of seven important transition countries in order to identify the salient features of their efforts to resolve banking crises.
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