Russian Banking

Russian Banking

Evolution, Problems and Prospects

New Horizons in Money and Finance series

Edited by David Lane

Russian Banking considers the rise of commercial market-oriented banks in Russia, their links with government and non-financial companies and their role as intermediaries in the provision of finance for investment. The contributors explore the legacy of the Soviet past and current functions of the Russian banking system, contrasting these with those in other post-communist societies and describing peculiarities such as informal networks and corruption.

Chapter 7: Comparisons with East-Central Europe

Martin Myant


Martin Myant1 This chapter develops a comparative theme by looking at banking in eastcentral Europe, with particular emphasis on the Czech Republic. There is no typical ‘model’ that can cover all the transition countries and certainly no model of success that Russia could, let alone ‘should’, have followed. Indeed, there are some areas of analogy between Russia and the Czech Republic, with the latter country’s attempt to develop a specifically ‘Czech’ capitalism rather than inviting in foreign banks and companies to modernize the economy. As in Russia, this attempt appears to have failed. Nevertheless, banking in east-central Europe presents a healthier picture than its Russian counterpart. Moreover, the solution that has been chosen after the problems encountered by the ‘Czech road’, closely following the philosophy in neighbouring countries, probably offers better long-term prospects than the remedies tried in Russia after the debacle of 1998. Needless to say, a remedy applied in one country is not necessarily applicable elsewhere. As will be indicated, much of the development of banking in the former centrally-planned economies is strongly influenced by their differing pasts. This suggests deeper difficulties in the Russian case: these reflect the nature of society as a whole and cannot be seen as specifically banking problems. Moreover, there are wide variations in what would be politically acceptable, particularly in relation to the role of foreign ownership. THE COMPARATIVE PERSPECTIVE One of the lessons of the past is that the importance of banking to economic...

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