Economists, bankers and policy makers all agree that the Central Bank has a critical role to play in the transition from the central plan to the market system. However, there is considerable disagreement on how best to pursue this role in practice. This question was the subject of the conference Central Banking in Post-Socialist Economies that took place on 10 and 11 July 1997 at the Centre for Post-Soviet Studies (renamed the Centre for Euro-Asian Studies) of the University of Reading in association with the Centre for Central Banking Studies of the Bank of England. The conference brought into the same forum academic economists, central bank representatives and other ยฎnancial professionals and commentators to discuss, contrast and compare the experience of the economies in transition with that of economies with more developed ยฎnancial arrangements.
The move away from the monobank structure of the centrally planned economy, where a single ยฎnancial institution was responsible for issuing currency, managing the payments system, collecting deposits, making loans and ยฎnancing the budget deยฎcit, towards the multi-tier banking structure, which distinguishes between the central monetary authority, the banking institutions and the non-banking ยฎnancial intermediaries and features a multitude of ยฎnancial instruments and markets, was never going to be simple or easy. Adding to that political instability, security worries, an uncertain legal framework and an adverse economic climate of severe output losses