Evolution, Problems and Prospects
New Horizons in Money and Finance series
Edited by David Lane
Chapter 7: Comparisons with East-Central Europe
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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