Financial Liberalization Essay

8415 words - 34 pages

Chapter 1Introduction1.1 Statement of the ProblemsThe topic of the project paper or report is to find out the impact of interest rate reforms or liberalization on financial development and thereby economic growth. The statement of the problems is to whether interest rate liberalization as originally prescribed by the McKinnon and Shaw hypotheses or can unambiguously lead to economic growth.1.2 Title of the ReportIt is necessary to select a topic in writing a report. A well-defined topic reflects what is going on to be discussed throughout the report. The topic "Impact of Interest Rate Reforms or Liberalization on Financial Development & Economic Growth" selected by me is duly approved by ...view middle of the document...

The BBA program having 120 credits in total contains three (3) credit hours on the Internship Program and Project Paper. The internship program has been set for three (3) months period. I believe this study will be beside me in future, especially if I get myself involved in banks and other financial institutions. The program has helped me a lot to understand the organizational atmosphere and behavior in general banking. From the internship program I have become familiar with different aspects of banking operations like customer service, clearing & cash department, accounts department, credit department and foreign trade department as an intern in Bank Asia Limited.1.5 Objectives of the StudyThe primary purpose of writing this report is to fulfill the requirement of BBA program and the general purpose of the study is to analyze the impact of interest rate liberalization on financial development and economic growth. The findings from the empirical study and some recommendations have been made. However, the specific objectives of the study are as follows:Specific Objectives:To find out the overall interest rate movements of the selected countries.To indentify the effect of interest rate liberalization on the economy.To find out the causes of positive and negative impact of interest rate liberalization on economy.Drawing a conclusion on interest rate liberalizations' impact on financial systems and economy with recommendations.1.6 Scope of the StudyFor the purpose of partial fulfillment of the study, I have chosen the project on "The Impact of Interest Rate Reforms or Liberalization on Financial Development & Economic Growth". The study is mainly done based on SAARC and four other countries named South Africa, Zambia, Indonesia and China. The scope of this report is to analyze the impact of interest rate liberalization on financial development and thereby economic growth. To find out this impact I have used graphical and financial deepening model. After analyzing the impact I have drawn a conclusion based on the findings.1.7 Limitations of the StudyTo complete this project paper I have faced few problems. I think these problems are faced due to some limitations of the study. However, these limitations can be presented in the following lines;The first limitation is the lack of intellectual thought and analytical ability to make it the most perfect one.The analysis is based on some limited data, so it has become difficult to draw a complete figure.Lack of in-depth knowledge for writing such kind of project paper.Chapter 2Overview of the TopicsThe relationship between interest rate liberalization and economic growth has attracted considerable attention and debate in recent years. The thrust of the debate has been whether interest rate liberalization as originally prescribed by the McKinnon and Shaw hypotheses or can unambiguously lead to economic growth. Since the re-invention of the financial liberalization concept in the 1970s, many countries...

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