Financial Reform in Eastern Europe: Progress With the Wrong Model

The Role of Banks in Financing Russian Economic Growth

“…There also was a debate on the appropriate financial system to be adopted. Several authors argued that the transition countries should opt for the Continental bank-centered solution, either because of theoretical considerations or because banks were the institutions more easily built (Tirole, 1991;Corbett and Mayer, 1992;Mayhew and Seabright, 1993; and for the Russian case, Litwack, 1995). Others objected, arguing that close links between banks and enterprises would hinder rather than further restructuring, as in a transition economy banks are not properly supervised, there is little competition, and the state intervenes strongly (Dittus and Prowse, 1996).…”

Post-Socialist Transition and the Development of an Accountancy Profession in the Czech Republic

“…The stewardship role of the accountant may become more obvious once the intentions of the new shareholders created by the coupon privatisation programme become clearer . As discussed by other authors (Corbett & Mayer , 1991 ;Craner , 1991) there are two possible models of capitalism in Europe . There is the Anglo-Saxon outsider model where financial accountants are orientated towards a general group of passive shareholders / investors , or the German insider model where the necessary financial information for an enterprise is obtained by those banks and institutions actively involved in the management of an enterprise .…”

A constitution for privatizing large Eastern enterprises

“…Not only does the success of Japanese internal organization provide much additional support for residual employee ownership in privatized SOB, but long-term Japanese bank relationships suggest a model of complementary external control that is superior to the Aaglo-American system of corporate governance by outside stockholders. The comparative advantage of "bank-centric" control in development and transition has also been emphasized by Bardhan and Roemer (1992) and Corbett and Mayer (1991), but without majority equity holding by employees, their (differing) models remain vulnerable to distributive conflict. The plan of this paper is thus to start with a summary of the extensive evidence, so often ignored by economists and policy-makers, for the relative inefficiency of the stock market in controlling managers of large corporations in the US and UK.…”