Restructuring financial systems in transition and developing economies: an approach based on the French financial system

The aim of this paper is to contribute to the debate on the redesigning of financial systems in Central and Eastern European and developing countries by focusing attention on specific financial institutions appropriate to easing the transition and fostering the creation of markets. The paper argues that the immediate emulation of the better-known institutions of the most developed, market-based financial systems, i.e. the US and the UK, should not be taken for granted. It underlines, instead, the importance of drawing inspiration from the experiences of a variety of institutions and financial systems. Particularly relevant are those systems that have experienced forms of transition and a mix, over time, of market and state intervention. The approach of this paper is one of institutional financial economics (Neave, 1991 and Williamson, 1986), in which structural details of financial institutions and contracts, in our case French financial institutions, are analysed. We argue that the principles on which some French financial institutions are based and aspects of their functioning are of value to reformers. We discuss the lessons that can be learnt from the Credit National, the Commissariat General du Plan, the CODEVI and the SOFARIS.