in the recent economic literature, an important finding is the causal relationship between financial development and economic growth. before the 1970s, the most of economists believed that economic growth could be reached only by accumulation of physical capital. in the 1970s and after the pioneering works of mckinon (1973) and shaw (1973), this orthodox view was criticized by a vast amount of ...

In earlier years, there was abundance of funds in banks the form demand and savings deposits. Hence, focus mainly on asset management. But intense competition volatility interest rate due to banking reforms reduced availability low-cost therefore, focused liability management as well. These pressures call for structured comprehensive measures not just ad hoc action. This is how started concentr...

An identity links the rate of economic growth, the speed of poverty reduction and changes in the distribution of income during some time period in a given country. A few authors used that identity to understand the causes for observed changes in poverty and to identify the exact role of economic growth in poverty reduction. Yet, many empirical cross-country studies of the relationship between g...

Currency crises that coincide with banking crises tend to share at least three elements. First, banks have a currency mismatch between their assets and liabilities. Second, banks do not completely hedge the associated exchange rate risk. Third, there are implicit government guarantees to banks and their foreign creditors. This paper argues that the "rst two features arise from banks' optimal re...

China is reforming its banking system, partially privatizing and taking on minority foreign ownership of three of its dominant ‘‘Big Four” state-owned banks. This paper helps predict the effects by analyzing the efficiency of Chinese banks over 1994–2003. Findings suggest that Big Four banks are by far the least efficient; foreign banks are most efficient; and minority foreign ownership is asso...

Standard banking theory suggests that there exists an optimal level of credit risk that yields maximum bank profit. We identify the optimal level of risk-weighted assets that maximizes banks’ returns in the full sample of US banks over the period 1996–2011. We find that this optimal level is cyclical for the average bank, being higher than the realized credit risk in relatively stable periods w...

We examine the role of macroeconomic ‡uctuations, asset market liquidity, and network structure in determining contagion and aggregate losses in a …nancial system. Systemic instability is explored in a …nancial network comprising three distinct, but interconnected, sets of agents – domestic banks, international …nancial institutions, and …rms. Calibrating the model to advanced country banking s...

This paper first examines various definitions of Kornai’s soft budget constraint (SBC) and the difficulties involved in interpreting data on losses, subsidies and financing, and then considers selective evidence from transition economies. Stocks of overdue trade credit are no larger than in Western economies and firms in transition economies (TEs) typically impose hard budget constraints on eac...

The aim of this study is to investigate the understanding of wealth, poverty, inequality and unemployment in South African Black (African) children aged 7, 9, 11 and 14 drawn from a rural, an urban and a semi-urban setting. Two hundred and twenty-®ve children (80 rural, 60 urban and 85 semi-urban) were interviewed individually in Setswana, their mother tongue. The urban children were living in ...