The Role of Financial Markets in the Transition Process

1 Financial Markets and Transition.- 1.1 Introduction.- 1.2 Theoretical Background.- 1.3 Empirical Evidence.- 1.4 Financial Market Imperfections in Eastern Europe.- 1.5 The Aim of this Volume.- References.- 2 The Order of Financial Liberalisation: Lessons from the Polish Experience.- 2.1 Introduction.- 2.2 Institutions and Sources of Finance.- 2.3 Privatisation, Restructuring and Enterprise Finance.- 2.4 Conclusions.- References.- 3 Economic and Financial Transition in Hungary.- 3.1 Introduction.- 3.2 Macroeconomic Developments and Transition Progress.- 3.3 Financial Developments.- 3.4 Issues in Financial Development.- 3.5 Challenges Ahead.- References.- 4 Endogenous Startups, Financial Conditions, and Capital Accumulation.- 4.1 Introduction.- 4.2 The Basic Model.- 4.3 Public Expenditure Financed by Labor Income Taxes.- 4.4 An Open Economy in a Fixed Exchange Rate Regime.- 4.5 Conclusions.- References.- 5 Wealth Distribution, Occupational Choice and the Behaviour of the Interest Rate.- 5.1 Introduction.- 5.2 Model Economy.- 5.3 Equilibrium Conditions and Factor Prices.- 5.4 Market Equilibrium Dynamics.- 5.5 Development and Inequality.- 5.6 Some Empirical Evidence in Eastern Europe.- 5.7 Conclusions.- References.- 6 Financial Instability in the Transition Economies: Lessons from East (Asia) for (East) Europe.- 6.1 Introduction.- 6.2 Is the Diamond-Dybvig Approach Relevant for Banking Policy in Transition Economies?.- 6.3 The Model.- 6.4 The Social Planner Problem.- 6.5 The Role of the Banking System.- 6.6 Liquidity Requirements as a Means to Preserve Financial Stability.- 6.7 Financial Instability and External Shocks: The Case of Foreign Interest Rate Shocks.- 6.8 Conclusions.- References.- 7 Foreign Direct Investment in the Banking Sector: Experiences and Lessons from CEECs.- 7.1 Introduction.- 7.2 FDI in the Banking Sector: Are Transitional Economies Special?.- 7.3 Data on FDI in TE Banking Sectors.- 7.4 Impact of FDI in the Banking Sector.- 7.5 Determinants of FDI Localization in the Banking Sector.- 7.6 Conclusions.- References.- 8 Corporate Capital Structure in Transition: Evidence from Hungarian and Czech Firms.- 8.1 Introduction.- 8.2 Determinants of Leverage in TEs: Theoretical Issues.- 8.3 Data Set and Descriptive Statistics.- 8.4 Empirical Analysis.- 8.5 Conclusions.- References.- 9 Financing Patterns in Hungary - as Seen from Balance Sheets and from Interviews.- 9.1 Introduction.- 9.2 Analysis of Financial Accounts of Companies.- 9.3 Survey Findings.- 9.4 Summary and Lessons.- References.