Creating Capital Markets in Central and Eastern Europe

Abstract

No AccessWorld Bank Technical Papers12 Aug 2013Creating Capital Markets in Central and Eastern EuropeAuthors/Editors: Gerhard Pohl, Gregory T. Jedrzejczak, Robert E. AndersonGerhard Pohl, Gregory T. Jedrzejczak, Robert E. Andersonhttps://doi.org/10.1596/0-8213-3370-4SectionsAboutPDF (0.3 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract:Some of the countries of Central and Eastern Europe have made remarkable progress in privatizing their enterprises by transfering ownership from the state to private citizens. This has created millions of new shareholders. It is estimated that more citizens now own shares of enterprises in Russia than in the United States and Great Britain combined. This initial distribution of share ownership will change over time as millions of citizens and financial institutions buy and sell shares. The countries of Central and Eastern Europe need to develop the stock markets and related institutions such as brokerages, clearing and settlment organizations, and regulatory agencies to handle the large volume of share trading that is likely to occur after privatization. This study attempts to answer two basic questions. The first question is the role of capital markets in the new market economies of the region. Is the role merely to provide a convenient and low cost market for buying and selling shares? Alternatively, will capital markets be a source of badly needed new equity capital to help with the restructuring of enterprises in the region? Will capital markets encourage managers of enterprises to undertake the needed restructuring and discipline them if they do not, for example, through low share prices or hostile takeovers? The second question is how and to what extent the governments in the region should encourage the development of capital markets. A laissez faire approach would be to let the market participants develop for themselves the best institutions and arrangements for trading shares. Stock exchanges will arise spontaneously as the need for them arises. A more active approach would be for government to sponsor the creation of stock exchanges and establish the overall legal and regulatory framework. Previous bookNext book FiguresReferencesRecommendedDetailsCited ByFinancialization of, not by the State. Exploring Changes in the Management of Public Debt and Assets across EuropeReview of International Political Economy, Vol.28, No.418 September 2020How Far is Basel from Geneva? International Regulatory Convergence and the Elimination of Barriers to International Financial IntegrationSSRN Electronic JournalBeurteilung der Börse im Finanzsystem von TransformationsökonomienReforming the Financial System; The Case of UzbekistanSSRN Electronic JournalEntrepreneurship and Privatization in Central Europe: The Tenuous Balance Between Destruction and CreationAcademy of Management Review, Vol.25, No.3Financial regulation and financial system architecture in Central EuropeJournal of Banking & Finance, Vol.24, No.4Background for Financial Markets Development in UkraineSSRN Electronic JournalEstonia: Selected Issues and Statistical AppendixIMF Staff Country Reports, Vol.98, No.12Latvia's Emerging Capital MarketsPrivatization in Estonia and Hungary: Selling Out View Published: October 1995ISBN: 978-0-8213-3370-9 Copyright & Permissions Related RegionsEurope and Central AsiaRelated CountriesCzech RepublicRussian FederationRelated TopicsFinance and Financial Sector DevelopmentMacroeconomics and Economic GrowthPrivate Sector Development KeywordsCAPITAL MARKETSPUBLIC ENTERPRISESSTOCKHOLDERSDENATIONALIZATIONCLEARING AGREEMENTSSTOCKSPRICESTRADEPAYMENTS SYSTEMSSPECULATIONFOREIGN INVESTMENTSREGULATIONSSECURITIESHOSTILE TAKEOVERCENTRAL AND EASTERN EUROPECAPITAL MARKETCAPITAL MARKETSDEBT MANAGEMENTDEVELOPING COUNTRIESEXTERNAL DEBTGOVERNMENT POLICYHUMAN CAPITALINTERNATIONAL BANKRISK MANAGEMENTSETTLEMENT PDF DownloadLoading ...

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