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                                                                            Copyright © 2002 International Development Options

                                                                                               All Rights Reserved

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Volume Two                                                                        Winter 2000-Spring 2001                                                          Numbers 3-4.

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        FINANCIAL LIBERALIZATION AND THE BANKING CRISIS IN JAMAICA

 

        Marie Freckleton

       Department of Economics

       University of the West Indies

       Mona Campus, Kingston 7, Jamaica

       The West Indies

       Published Online February 15, 2017

 

 

        ABSTRACT

 

Financial liberalization in Jamaica was followed by a financial crisis that cost an estimated 40 percent of the gross domestic product (GDP).  This article examines the underlying causes of the crisis. Institutional deficiencies are identified as the main factors that caused the process of financial liberalization to lead to the collapse of the banking sector. It is also argued that capital account liberalization necessitated macroeconomic policies that aggravated the structural weaknesses in the Jamaican banking system.  The article concludes that where banking systems are weak, the costs of financial liberalization may outweigh the benefits.

      

 

IDO        ISSN: 1093-8281                 Copyright © 2017 International Development Options

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