Reformed Banks and Corporate Governance in the Czech Republic, 1991-1996

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Abstract
A World Bank economist presents the highlights of his three-year study of the banking sector in the Czech Republic, tracing the role of large banks through the fall of 1996. Relying in part on interviews conducted in Prague in 1994 and 1996, the author focuses on the banking and enterprise reform program and its consequences for corporate governance. Coverage includes developments during the two waves of voucher privatization, the substance of investment funds managed by bank-owned subsidiaries, ownership and control after privatization, recapitalization of the state-bank sector, as well as bankruptcy laws and related legislation. Also covered and discussed are the consequences of large-bank dominance for enterprise governance, with some emphasis on the Czech government's continued control of banks and the inadequacy of measures to police and forestall financial collusion. Journal of Economic Literature, Classification Numbers: E58, G21, G28, G38, P48. 6 tables, 122 references.