Fixing Russia's Banks A Proposal for Growth

Russia's attempt to create a thriving free market economy is failign largely because its financial system is built on ersarz banks. Bernstam and Rabushka's bold, intriguing proposal--resting on an elaborate strategy for debt-for-equity swaps--would establish real banks, reduce government debt, strengthen the independence of the Central Bank of Russia, and lay a solid foundation for sustained economic growth.

Michael S. Bernstam, a research fellow at the Hoover Institution, Stanford University, is an economic demographer who studies economic systems in their relationship with income, population, financial development, natural resources, the environment, conflict, and other social change. Alvin Rabushka, the David and Joan Traitel Senior Fellow at the Hoover Institution, works in the public policy areas of taxation in the United States and abroad, economic development in the Pacific Rim countries, and the transition economies of Central and Eastern Europe, notably Russia.