Chow Fah Yee - Academia.edu (original) (raw)
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ABSTRACT The authors have used social cost benefit analysis (SCBA) to evaluate a sample of firms ... more ABSTRACT The authors have used social cost benefit analysis (SCBA) to evaluate a sample of firms in Malaysia to investigate the claims made in support of financial liberalisation. Social prices rather than market prices are used as social prices incorporate both the growth and distributional objectives of the country. Contrary to theory, results showed that the pre liberalisation cases are more efficient in terms of achieving the country's objectives. It revealed that banks which employed market orientated mechanisms to allocate resources did not result in the resources being put to their best possible uses for the period studied. It is time every nation makes a conscientious effort at allocating its resources in a more efficient and equitable manner, in order to live within the boundaries of nature and the planet, putting limited resources to their best possible uses to help achieve a green economy.
The stability of the banking sector is the focus of every government at this moment. As the globa... more The stability of the banking sector is the focus of every government at this moment. As the global financial crisis that originated from the US subprime mortgage meltdown unfolds, each country scrambled to come up with a plan to shore up calm and confidence. Malaysia has recovered not too long ago from a similar banking debacle, the 1997 East Asian Financial Crisis. The link between financial liberalization and the performance of the Malaysian banking sector is assessed here by employing two techniques. Firstly, using firm level data of Malaysian domestic banks to assess the allocative efficiency of the banking sector. Specifically, it tries to determine whether financial liberalization in Malaysia was able to promote a competitive environment that could boost the efficiency of banks in terms of reduction in intermediation spreads. Using cost-ratio analysis, two series of cost data (pre liberalization and post liberalization) were calculated . Results revealed that all save one of the banks analyzed have not become more efficient after the banking sector is liberalized. Secondly, by mobilizing macroeconomic data and Logistic regression technique to assess the contribution of financial liberalization to the banking crisis of 1997. Results suggest that financial liberalization, banks' lending rates and the ratio of M2 to foreign exchange reserves contribute significantly to the 1997 banking sector crisis.
Globalization, the twentieth century buzzword, has mutated into a 21 st century nightmare -the gl... more Globalization, the twentieth century buzzword, has mutated into a 21 st century nightmare -the global economic crisis. Globalization refers to the greater interconnectedness among nations. It is also seen as the implementation of socio-economic policies which gave priority to market forces while the state takes on a diminished role. Opening up to international trade has helped many developing nations achieved economic growth. Financial liberalization, part of the globalization process, resulted in unprecedented growth in financial institutions and financial products. However, globalization has not brought the promised economic benefits of efficiency and equity; instead there was a widening of income inequality. The 1997 East Asian financial crisis (EAFC) and the recent global financial crisis highlighted the weaknesses of globalization: increased instability and iniquity of economic progress.
ABSTRACT The authors have used social cost benefit analysis (SCBA) to evaluate a sample of firms ... more ABSTRACT The authors have used social cost benefit analysis (SCBA) to evaluate a sample of firms in Malaysia to investigate the claims made in support of financial liberalisation. Social prices rather than market prices are used as social prices incorporate both the growth and distributional objectives of the country. Contrary to theory, results showed that the pre liberalisation cases are more efficient in terms of achieving the country's objectives. It revealed that banks which employed market orientated mechanisms to allocate resources did not result in the resources being put to their best possible uses for the period studied. It is time every nation makes a conscientious effort at allocating its resources in a more efficient and equitable manner, in order to live within the boundaries of nature and the planet, putting limited resources to their best possible uses to help achieve a green economy.
The stability of the banking sector is the focus of every government at this moment. As the globa... more The stability of the banking sector is the focus of every government at this moment. As the global financial crisis that originated from the US subprime mortgage meltdown unfolds, each country scrambled to come up with a plan to shore up calm and confidence. Malaysia has recovered not too long ago from a similar banking debacle, the 1997 East Asian Financial Crisis. The link between financial liberalization and the performance of the Malaysian banking sector is assessed here by employing two techniques. Firstly, using firm level data of Malaysian domestic banks to assess the allocative efficiency of the banking sector. Specifically, it tries to determine whether financial liberalization in Malaysia was able to promote a competitive environment that could boost the efficiency of banks in terms of reduction in intermediation spreads. Using cost-ratio analysis, two series of cost data (pre liberalization and post liberalization) were calculated . Results revealed that all save one of the banks analyzed have not become more efficient after the banking sector is liberalized. Secondly, by mobilizing macroeconomic data and Logistic regression technique to assess the contribution of financial liberalization to the banking crisis of 1997. Results suggest that financial liberalization, banks' lending rates and the ratio of M2 to foreign exchange reserves contribute significantly to the 1997 banking sector crisis.
Globalization, the twentieth century buzzword, has mutated into a 21 st century nightmare -the gl... more Globalization, the twentieth century buzzword, has mutated into a 21 st century nightmare -the global economic crisis. Globalization refers to the greater interconnectedness among nations. It is also seen as the implementation of socio-economic policies which gave priority to market forces while the state takes on a diminished role. Opening up to international trade has helped many developing nations achieved economic growth. Financial liberalization, part of the globalization process, resulted in unprecedented growth in financial institutions and financial products. However, globalization has not brought the promised economic benefits of efficiency and equity; instead there was a widening of income inequality. The 1997 East Asian financial crisis (EAFC) and the recent global financial crisis highlighted the weaknesses of globalization: increased instability and iniquity of economic progress.