The Crisis in the Financial Sector and the Authorities' Reaction: The Case of the Philippines

Jean-Claude Nascimento

No 1990/026, IMF Working Papers from International Monetary Fund

Abstract: The paper discusses the crisis in the Philippines financial sector that began on a limited scale in 1981 and culminated in a significant contraction of the financial system in 1986. The causes, manifestation and transmission mechanism of the crisis are analyzed and reactions of the authorities to the crisis are examined. The main conclusion is that weaknesses of the regulatory framework and loose banking practices provoked and exacerbated the crisis, while the political and economic climate during 1979-83 also played a key role. In the end, the authorities’ interventions to contain the crisis was sucessful but costly.

Keywords: WP; central bank; banking system; legal reserve; thrift bank; monetary policy; private sector; bank assets; real GNP; treasury bill; commercial paper; development bank; emergency loan; capital base; CBP rule; money bank; interest margin; Commercial banks; Loans; Credit; Distressed assets (search for similar items in EconPapers)
Pages: 72
Date: 1990-03-01
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:1990/026

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