There is wide, albeit equivocal, acceptance that financial development and economic growth are related positively. In his seminal paper, Levine (1997) summarized five functions that assist financial systems to contribute to economic growth. In this paper, we analyze the performance of financial systems in the less-developed post-Communist economies of the former Soviet Union in fulfilling those vital functions, and compare this performance with more advanced transition economies. In general, we find significant progress being made toward building contemporary financial systems in all groups of transition economies, although the gap between financial systems in the less-developed post-Communist countries and their more advanced counterparts remains very large.