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Banking Sector
The Investor Sentiment - Equity and investments forum for Sri Lankans :: Equities :: Industry Analysis :: Banks, Finance & Insurance
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Banking Sector
In this background lets look at how banking sector is controlled and directed in different countries like South Korea, Malaysia, Thailand, Japan, Taiwan, Indonesia towards achieving economic growth.
yellow knife- Top contributor
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Re: Banking Sector
Charging interest is labelled as usury by many religions and prohibited.
Buddhism is one religion that does not prohibit charging interest and as per David Graber's book DEBT , a Buddhist devotee by the name of Hariswamini recorded the usage of interest of her deposit . (p.253)
Another source
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This inscription records that a female devotee, Hariswamini, to prevent begging, caused an almshouse to be erected, and money was given for the lamps of the
yellow knife- Top contributor
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However its worthy studying Barclays Bank which has been surviving for more than 250 years and taking many entrepreneurial risks like lending for rail road laying, ship building, and many other big projects. Even Hyundai got loans from Barclays where the amounts were huge that even states find it difficult to take such loans..
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yellow knife- Top contributor
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So its worth understanding who are Quakers...To understand Quakers we should know Gorge Fox.
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George Fox believed that God has created all equal and hence no need to consider some superior because they are priests and to pay tax to Church. This new thinkers were not allowed to join government jobs by Church. Therefore they had to select jobs that others do not do, like banking.
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It made all others to understand the power of banking.. Medici family was a banking family of Medieval Europe. Lets stop discussing much of the past and concentrate on modern days banking and its influence in different countries..
yellow knife- Top contributor
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But developing nations governments should strongly control where the credit is flowing.
The best banking returns in the east Asian region are produced in the region's most backward ( poor ) countries- Philippines, Indonesia and Thailand.
Thailand is considered as the best pupil of IMF in east Asia region as it practice what IMF preach.. that is deregulating and liberating banks.
But countries like Korea financial policy frequently accepted low near-term returns on industrial investments in order to build industries capable fo producing higher returns in the future.
In this context its worthwhile comparing the Consumption Loans offered by Sri Lankan commercial banks by means of Gold Pawning.
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Similarly in US industrial progress was fostered by the high tariff policies, railway subsidies and cartel tolerance of the federal government. In this context banking magnates such as J.Pierpont Morgan invested heavily in the industrialization process , creating business empires with huge economies of scale
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In short , state directed industrial policy came first, and bank financing second.
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Re: Banking Sector

Backstage- Top contributor
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Best example is Spain. 19th Century Spain had a large number of investment banks. Spain legal system and state was in favour of railroads but not on manufacturing.
As a result Spanish banks financed thousands of kilometers of railroad lines, for which all the rolling stock was imported and for which there were no manufacturers to transport. After banking crisis in 1870s Spain remained thoroughly UN-industrialized.
Similarly Austria had plenty of investment banks and weak infant industry policies.
In sum , throughout history financial systems have catalyzed different developmental outcomes depending on the policy environment that has surrounded them. And it is the governments of successful emerging states that make financial systems support effective industrialization.
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In the event, every one of the nine major east Asia economies , from Japan to Thailand delivered post-war savings and investment rates of 30% to 50%.
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These arguments are knows as Washington Consensus
The Washington Consensus is a set of 10 relatively specific economic policy prescriptions that is considered to constitute the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.–based institutions such as the International Monetary Fund (IMF), World Bank, and the US Treasury ...
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[You must be registered and logged in to see this link.]Washington_ConsensusWikipediaLast edited by yellow knife on Wed Nov 04, 2015 11:02 am; edited 1 time in total
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- [You must be registered and logged in to see this link.] discipline, with avoidance of large fiscal deficits relative to GDP;
- Redirection of [You must be registered and logged in to see this link.] from subsidies ("especially indiscriminate subsidies") toward broad-based provision of key pro-growth, pro-poor services like primary [You must be registered and logged in to see this link.], [You must be registered and logged in to see this link.] and [You must be registered and logged in to see this link.] [You must be registered and logged in to see this link.];
- [You must be registered and logged in to see this link.], broadening the tax base and adopting moderate marginal tax rates;
- [You must be registered and logged in to see this link.] that are market determined and positive (but moderate) in real terms;
- Competitive [You must be registered and logged in to see this link.];
- [You must be registered and logged in to see this link.]: liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); any trade protection to be provided by low and relatively uniform [You must be registered and logged in to see this link.];
- Liberalization of inward [You must be registered and logged in to see this link.];
- [You must be registered and logged in to see this link.] of [You must be registered and logged in to see this link.];
- [You must be registered and logged in to see this link.]: abolition of regulations that impede market entry or restrict competition, except for those justified on safety, environmental and consumer protection grounds, and prudential oversight of [You must be registered and logged in to see this link.];
- Legal security for [You must be registered and logged in to see this link.].
yellow knife- Top contributor
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Meredith Jung En Woo got the luck of mastering history then other subjects and made her to see the world and predict...
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Professor | |
우정은 | |
U Jeong-eun | |
U Chŏng'ŭn |
yellow knife- Top contributor
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" Privatization in Latin American Southern Cone had its conglomerates run amok" she wrote. " buying up banks to buy up other enterprises stocking up loan portfolios with loans made out of affiliated firms. ...it
led to Chilean and Argentinine grupos (Groups ) profiting like bandits. Despite the evidence from Latin America about the risks of premature bank deregulation - not to mention what was seen after financial deregulation in Russia in the early 1990s -south -East Asia went ahead with very similar policies. Once again political leaders knew too little history and were too easily bewitched by economics.
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Resigning to write a book ?
On October 7, 2013, Woo announced her resignation from the position of Dean of the College and Graduate School of Arts and Sciences, effective May 2014, by University of Virginia email. She plans to write a book named The Three Worlds of East Asian Capitalism, and then to return to teaching
Books she already wrote ?
- Race to the Swift: State and Finance in Korean Industrialization Columbia University Press, 1991.
- Past as Prelude: History in the Making of the New World Order Westview Press, 1991.
- Capital Ungoverned: Liberalizing Finance in Interventionist States Cornell University Press, 1996.
- The Developmental State Cornell University Press, 1999.
- Neoliberalism and Institutional Reform in East Asia Palgrave, 2007.
- [You must be registered and logged in to see this link.] op-ed in [You must be registered and logged in to see this link.] published 7 July 2006
From Books to Films ?
She was the executive producer of
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yellow knife- Top contributor
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Japan, Taiwan, South Korea did their best to not to listen to advice from IMF..until they passed many milestones in development..
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Korea and Taiwan were similarly reluctant to accept the demands for free up Capital flows until 1990s.
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Japan, Korea and Taiwan each experienced financial crises when liberalizing. But what was more important was that these states resisted pressure from the Washington Consensus and held liberalization until very substantial development progress had occurred.
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1. Capital Controls
2. Banking systems.
Banks are beholden by Central Banks, thus governments can pave way through Central Banks. ( Who said Central Banks should be independent from Government ? )
Stock market and Bond markets, by contrast are subject to instantaneous selling by investors in times of panic.
yellow knife- Top contributor
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So during Meiji Restoration era, the policy makers of Japan just copied what US was doing.
Initially they allowed the setting up of scores of banks with the ability of issuing currency.
Net result was 1870s Hyper-inflation and in 1880s Deflation.
As mentioned the book Alchemist, the Bankers found the solution in Goldilocks... Neither too big nor too small fits in.. You have to find what suit you..
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Therefore a Central Bank was created with monopoly of currency issuing.
Later three big industrial lenders were created by government
1. Yokohama Specie (1870)
2. Nippon Kangyo ( 1897)
3. Industrial bank of Japan (1902)
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=====================================
DEFINITION of 'Bank Run' A situation that occurs when a large number of bank or other financial institution's customers withdraw their deposits simultaneously due to concerns about the bank's solvency.
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