A Stages Approach to Banking Development in Transition Economies

K. Ruziev, S. C. Dow, D. Ghosh

Research output: Contribution to journalArticlepeer-review

10 Citations (SciVal)


Credit shortages are widely thought to explain the output contraction in former Soviet Union (FSU) countries during the 1990s. It is argued here that these shortages were the result of an ahistorical approach to policymaking which ignored the time needed for the establishment and further development of money, banking, and nonbanking financial institutions. Starting from Chick's stages-of-banking-development framework, we examine the experience of the FSU economies in transition from central planning. We then develop a fivephase framework to characterize the process of banking development required for them to reach stage two of Chick's framework, where bank liabilities are accepted as money.
Original languageEnglish
Pages (from-to)3-33
Number of pages31
JournalJournal of Post Keynesian Economics
Issue number1
Publication statusPublished - 01 Sept 2008


  • banking development
  • FSU countries
  • money
  • trust


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