Critically Examine Why Financial Liberalisation Brought Financial Crisis In Most Of The Asian Countries But Did Not Bring A Crisis In Either China Or India.
The government have been using the policy of financial repression now for many years. Financial repression consisted of fixing interest rates below market levels and controlling the allocation of credit. Under developed financial systems, inefficient lending patterns, and failure of distributional goals, all existed. Low savings where noticeable due to negative real interest rates. Macro economic performance fell within this policy, also those countries whom had large negative real interest rates suffered from growth rates. Most economical factors where state owned under financial repression. Within state owned banks existed problems of poor lending decisions and low repayment rates, this in return led to bank insolvency.
The logic of financial repression was to make the financial sector assist the needs of development.
This is where financial liberalisation comes in; the purpose of this is to reverse all the negative facts of repression.
There are 3 crucial aspects of......
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Approximate Word Count: 2604
Approximate Pages: 11 (250 words per double-spaced page)
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Critically Examine Why Financial Liberalisation Brought Financial ...
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