THE ROLE OF THE FINANCIAL SECTOR IN THE SOCIALIST ECONOMIES IN TRANSITION - THE 2ND PRIMITIVE ACCUMULATION OF CAPITAL

This article discusses the functions of financial systems in capitalis t economies and the potential role of finance in both encouraging and influencing the development of market-guided economies in the socialis t economies in transition. The implications of several types of financ ial systems such as the German-Japanese universal bank and the US-UK n arrow bank-equity market models for the nature and characteristics of these economies are considered. The article argues that financial syst em characteristics and structure will influence distribution and equit y in the transitional economies, and that these effects should be cons idered along with efficiency in the allocation of financial capital in designing financial systems in those economies.