Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- List of conference participants
- 1 Introduction
- 2 Efficient governance structure: implications for banking regulation
- Discussion
- 3 Bank loan maturity and priority when borrowers can refinance
- Discussion
- 4 Stock markets and resource allocation
- Discussion
- 5 Informational capacity and financial collapse
- Discussion
- 6 Financial intermediation and economic development
- Discussion
- 7 Creditor passivity and bankruptcy: implications for economic reform
- Discussion
- 8 Enterprise debt and economic transformation: financial restructuring in Central and Eastern Europe
- Discussion
- 9 Bank regulation, reputation and rents: theory and policy implications
- Discussion
- 10 Relationship banking, deposit insurance and bank portfolio choice
- Discussion
- 11 Competition and bank performance: a theoretical perspective
- Discussion
- Index
Discussion
Published online by Cambridge University Press: 04 August 2010
- Frontmatter
- Contents
- List of figures
- List of tables
- Preface
- List of conference participants
- 1 Introduction
- 2 Efficient governance structure: implications for banking regulation
- Discussion
- 3 Bank loan maturity and priority when borrowers can refinance
- Discussion
- 4 Stock markets and resource allocation
- Discussion
- 5 Informational capacity and financial collapse
- Discussion
- 6 Financial intermediation and economic development
- Discussion
- 7 Creditor passivity and bankruptcy: implications for economic reform
- Discussion
- 8 Enterprise debt and economic transformation: financial restructuring in Central and Eastern Europe
- Discussion
- 9 Bank regulation, reputation and rents: theory and policy implications
- Discussion
- 10 Relationship banking, deposit insurance and bank portfolio choice
- Discussion
- 11 Competition and bank performance: a theoretical perspective
- Discussion
- Index
Summary
The purpose of the paper by Begg and Portes is to discuss the problem of enterprise debt in the context of the transformation of the economies of Central and Eastern Europe, and to propose a sequencing of reforms designed to tackle it.
In these comments I will first consider the stylized facts documented in the paper, then I will propose a simple model of banking that captures some of the costs of increased bank lending to state-owned enterprises, to conclude with some comments on the policy proposals set out in the paper.
The facts
The paper starts with a section in which the problem is identified. I have two comments on this section. First, I do not find the evidence on the magnitude of the problem entirely convincing. In particular, Tables 8.1 and 8.3 do not show a very significant pattern of increased bank credit to state-owned enterprises in Central and Eastern Europe. Second, I think that the discussion of the causes and consequences of the explosion of inter-enterprise credit is much weaker than what would be required to support the line of argument in the paper. In this respect, I would have liked to see a serious effort to model the relationship between bank and interfirm credit. At any rate, I basically agree with the conclusion that ‘policy should address the financial health of banks and enterprises [and that] with that restored, inter-enterprise credit will take care of itself’.
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- Information
- Capital Markets and Financial Intermediation , pp. 255 - 261Publisher: Cambridge University PressPrint publication year: 1993
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