The interrelationship between Western and Eastern capital markets^**Paper presented at the 36th Int'l Banking Summer School, Baden/Vienna 1993.

Looking at emerging markets and comparing them with the new Eastern European democracies one can state that some of these states are already showing signs of repeating this development pattern. The biggest obstacle for economic recovery is without doubt the lack of an efficient economic structure and banking system. This contribution works out six requirements for successful reform giving some hints how the West can help: by developing the local financial environment, by helping to organize the infrastructure for equity markets and finally by helping to improve the banking system.