Have banking and financial reforms in transition countries been effective?

The transition countries have been pursuing a market economy since the early 1990s. Crucial reforms in the banking and financial sectors are necessary to provide a financial structure that supports a market economy, particularly the private and enterprise sector, leading to economic growth. This paper examines the banking and financial development in the transition countries. Arguments for banking reforms are made and the conditions for an efficient banking system are examined. A comparison in the progress of banking reforms and economic growth provides useful lessons not only for the transition countries but for developing and other emerging countries. Lastly, policy choices are suggested for the transition countries.