ABSTRACT
This chapter explains the different investment strategies adopted by financial intermediaries and the conversion of more aggressively-managed investment companies into holding companies during mid-1996. It discusses the changing structure of the Czech banking industry, and its impact on the financial intermediaries industry. The chapter reviews the possible future strategy and role of financial intermediaries in the evolving industrial structure of the Czech Republic. One of the most important issues in the process of privatization and transition is corporate governance. The third wave of privatization, which is not affiliated with the government programs of voucher privatization, refers to the attempts of investment funds to accumulate shares by directly buying out smaller shareholders. Privatization methods that would have favored the existing management of state-owned enterprise's (SOE) were also unacceptable. The method of voucher privatization was relatively straight forward, SOE's slated for voucher privatization were corporatized and their stock was deposited with the Fond narodniho majetku during the transitional period.
