As the centrally planned communist nations of Central Europe lacked liquid and efficient capital markets, financial systems architecture became instrumental to their transition into market economies. Now, after almost 17 years of operations, it is time to take a snapshot of one of these economies and compare it to a well developed capital market. This study is the first to provide a quantifiable comparison of the quality of the capital markets of a fully developed and a transition economy; namely Euronext France [Euronext] and the Warsaw Stock Exchange [WSE]. Using intraday data for the Euronext market and the WSE it is shown that while overall liquidity is certainly much greater in Euronext, range based intra-day volatility is significantly lower in the WSE. For stocks with the highest market capitalisation the WSE has lower transaction costs in the first [largest] decile than Euronext. These results indicate that while the established market is significantly more liquid in terms of average trade size and trade numbers it does not always offer lower transaction costs or volatility. This is a new result as most contributions to the literature argue that an emerging market within a transition economy will suffer from excess volatility.



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