This paper examines the performance of 515 banks in 16 transition economies for the years 1994 - 99 based on their public financial accounts. We first examine lending behaviour and probability distribution of bank profitability to determine whether these banks exhibit behaviour and performance...

While federal credit programs are varied in form, their fiscal and economic effects arise primarily from the same source--each program`s subsidy component. Recent credit reform proposals would make control of credit subsidies the primary focus of budgetary efforts. By subjecting these subsidies...

The paper evaluates whether a monetary aggregate can serve as a useful predictor of inflation, using recent developments in the principle of cointegrated variables. M2 but not M1 is cointegrated with relevant price, transactions, and rate of return variables. However, deviations of M2 from its...

With the recent collapse of the asset price quot;bubble,quot; Japanese banks encountered significant pressure from both a sharp decline in the value of equity holdings and a marked increase in bad loans. In August 1992, the Government initiated measures that stabilized equity prices and assisted...

This paper examines alternative approaches to building sound financial structures in emerging market economies. The foremost task is to resolve the bad loan problem and to recapitalize insolvent state banks. By restoring an incentive for banks to price accurately the risks of new lending, this...

This paper shows (i) how entry and exit of firms in a competitive industry affect the valuation of securities and optimal capital structure, and (ii) how, given a trade-off between the tax advantages and agency costs, a firm will optimally adjust its leverage level after it is set up. We derive...

• Sound national systems of corporate governance are essential for all countries, including the poorest, to reap the benefits of globalisation. • “Corporate governance” comprises the institutions that govern the relationship between people who manage corporations and all others who...