Bangladesh : Financial Sector Distress and Lost Economic Growth
The financial system in Bangladesh has suffered from years of systemic and chronic problems, represented by weak supervision and enforcement, deficient accounting and reporting practices, and more importantly, widespread loan defaults and delinquen...
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| Format: | Policy Note |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2000/06/16286549/bangladesh-financial-sector-distress-lost-economic-growth http://hdl.handle.net/10986/15476 |
| Summary: | The financial system in Bangladesh has
suffered from years of systemic and chronic problems,
represented by weak supervision and enforcement, deficient
accounting and reporting practices, and more importantly,
widespread loan defaults and delinquencies. It is widely
perceived that major inadequacies in the financial sector
have had a considerable growth restraining effect over the
years, by inhibiting private investment activities and
productivity growth, as well as promoting misallocation of
resources. It is paramount important that the government
takes an urgent policy action to reform the mal-functioning
financial sector. The main objective of such reforms is to
develop a market oriented, disciplined modem system for
mobilization of resources, efficient allocation of resources
from both domestic and foreign sources, and reduction of
poverty through sustained economic growth. This paper is
organized as follows. Section two reviews the recent
theoretical and empirical literature on finance and growth.
Section three summarizes the main findings of our
cross-country analysis, conducted to estimate the growth
impact of financial sector distress in Bangladesh. Finally,
section four concludes the paper. |
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