Bank Insolvency and Stabilization in Eastern Europe

Download or read book Bank Insolvency and Stabilization in Eastern Europe written by International Monetary Fund and published by International Monetary Fund. This book was released on 1992-01-01 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.