ECON 336 Chapter Notes - Chapter 19: 1997 Asian Financial Crisis, Tves, Planned Economy
19 May 2012
School
Department
Course
Professor
Document Summary
The banking sector has been china"s most protected industries, overregulates, dominated by state ownership, and protected from international competition. Financial deepening= the ratio of financial assets to gdp. Measures the extent to which past savings have been transformed into investments through the intermediation of financial institutions. Deepening occurs when more wealth has been created, relative to income. Financial broadening= refers to an increase in the variety of financial institutions and instruments. It implies a greater choice for savers and investors. China"s market is said to be deep but narrow. 19. 1 the financial system in the planned economy and under reform. The financial system made up entirely by the government-run banking system was considered very. Passive. it was merely accommodated the physical flows that the planners arranged. Due to the large amount of household savings in the post reform era the banking sector grew rapidly. The government began relying on using bank surpluses to finance the failing soes.
