There is wide, albeit equivocal, acceptance that financial development and economic growth are related positively. Financial systems contribute to economic growth by fulfilling a number of important functions. In this article, 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.