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.

Essay specific features

 

Issue:

Business

 

Written by:

Rodrick P

 

Date added:

November 24, 2014

 

Level:

University

 

Grade:

A

 

No of pages / words:

9 / 2519

 

Was viewed:

1703 times

 

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Essay content:

To allow the free flow of international finance to a country 2. To remove controls and restrictions on the functioning of domestic banks, to allow them to be integrated in the world financial markets. 3. To provide autonomy from the government to the central bank so that it's supervisory and regulatory role vis-a-vis the banking sector is dissociated from the political process of the country, and hence from any accountability to the people...
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By doing this it relaxes foreign currency flow. McKinnon and Shaw (1973) stated that financial liberalisation in those countries that are financially repressed would bring about higher savings, credit supply will be increased; stimulate investment and therefore increasing growth. From this the theory of financial liberalisation was formed, whereby the links between higher interest rates and savings where focused on as well as investment and economic growth...
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