BANKS AND CAPITAL markets are to mature market economies what central planning offices were to command economies. By allocating resources to certain projects and sectors - and denying them to others - they organize the economy. In Hungary, the Czech Republic, and Poland - which are comparable, fast-track reformers - creating capital markets has been a key facet of the transition to a market economy. Because a liquid capital market is the most transparent allocator and mobilizer of an economy's resources, it is a useful indicator of economic reform.

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