ABSTRACT
Russia’s economic transformation in the 1990s was accompanied by largely negative economic indicators: falling living standards, high inflation, budget deficits, capital flight and a greater fall in industrial production than during the great depression in the United States in the early 1930s. Voucher privatisation was followed from mid-1994 by a second stage focusing on enterprise restructuring and private sector development, including the transition to cash privatisation, the attempt to achieve more efficient corporate management, and the accelerated development of securities markets and legal reforms. Russian capitalism took on carpet-bagging forms, interested in short-term gains, rent seeking and asset stripping. The independent Russian banking system was born in the 1990s, with many created to leverage money from enterprises to shareholders or to scoop up under-valued state enterprises, rather than to intermediate finances into productive investment.
