Bank Insolvency and Stabilization in Eastern Europe

Publication Date:

January 1, 1992

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The profound structural reform underway in Eastern Europe has revealed the weakness of the banking sector there; macroeconomic stability and other reforms are thereby threatened. After an overview of recent developments in the banking sectors of these countries, a model is developed that clarifies the role of banking in an emerging market economy, and the danger that the disturbances inherent to it may be magnified and prolonged by a banking collapse. The implication is that priority must be given to mobilizing fiscal resources to cover the costs of restructuring the banking sector.

Series:

Working Paper No. 1992/009

Subject:

Bank credit Bank solvency Banking Commercial banks Consumption Currencies Financial institutions Financial sector policy and analysis Loans Money National accounts

Notes:

Also published in Staff Papers, Vol. 39, No. 4, December 1992.

English

Publication Date:

January 1, 1992

ISBN/ISSN:

9781451927146/1018-5941

Stock No:

WPIEA0091992

Pages:

46

Please address any questions about this title to publications@imf.org