An Empirical Look at the Bank Conciliation Process 1650. Poland's Enterprise and Bank Restructuring Program, adopted in 1993, halted the deterioriation of the country's commercial banks, but its bank-led workout process has done little to further the operational restructuring or privatization of enterprises.
Continued work is needed to build strong banks that can impose effective corporate governance.
Since 1992, Poland has been considered a model of commercial banking reform among transition economies. The outcome of Poland's first experiment with bank-led restructuring is decidedly mixed. The EBRP forced banks to confront their problems, helped them build institutional capacity, and furthered the difficult task of weeding out and closing clearly unviable firms. These are important achievements in this early period of transition, and the Polish approach can serve in many ways as a model for other transition economies. Despite these strengths, the data suggest that the bank-led conciliation process has had limited power to promote needed restructuring or privatization in firms.