Financial market reform is crucial for transitioning economies, like Russia and Eastern European countries, to attract investment and support businesses. However, these countries still face challenges like unpredictable monetary policies, inadequate infrastructure for trading financial assets, and unstable banking systems. This has led to issues like banking crises and frozen interbank markets. Many banks in these economies are unprofitable and inefficient in allocating credit, with a majority still state-owned. For example, in Hungary, 70% of bank assets are held by four state banks. In Poland, only three out of nine banks planned for privatization have been sold. In Hungary, the three largest banks are still state-controlled.