Introduction

This work analyses the advantages and disadvantages of decentralising the banking system in centrally planned economies that are themselves undergoing decentralisation. In doing so, it examines the functions of the banking system in the transitional period. The research covers some extremely interesting and important issues, such as the direction of reforms and how far decentralisation of the banking system can actually go. The study also considers whether a competitive market banking system could be easily copied, and whether it is possible or necessary to control the economy through the banks.