Download or read book The Role of Financial Institutions in the Transition to a Market Economy written by Mr.Michael G. Spencer and published by International Monetary Fund. This book was released on 1993-10-01 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial institutions intermediate between savers and investors and contribute to corporate governance. Equity and bond markets in the former centrally planned economies are not yet in a position adequately to provide these services. It is not yet clear that investment funds will provide the necessary financing and corporate management. Therefore the first priority for financial sector reforms must be to establish a healthy commercial banking sector. Banks are the most promising source of financing, provide payment services which are crucial to both the real and financial sectors and, by monitoring the use of loaned funds, will be the primary source of corporate governance during the transformation to a market economy.