Financial Stability and Economic Development in Transitional Economies

In most countries, central banks are responsible for financial stability as well as monetary policy and the national or wholesale payment systems. In the transitional economies, rapid transformation from a monobanking system into a two-tier banking system produces casualties, instabilit and fragility. Many gaps existed in the financial landscape in terms of institutions and markets that typically constitute financial sectors in the industrial countries. Central bankers also faced uncompetitive and uncooperative commercial banking systems. Much has changed over the past decade in the transitional economies.