financial and capital markets
DESCRIPTION
Financial and capital MarketsTRANSCRIPT
Financial and Capital Markets
Introduction
• Evolved from a state of nothingness in 1947, to playing an important role in economic development and being integrated with the rest of the world today.
• Expanded exponentially
• Growing securities market for investment funds
Introduction
• Why is the financial market important?– To channel domestic savings into high return
high return investment– A system of market determined credit
allocation by commercial banks– Together, these will generate economic growth
The Development of the Banking Sector: The First Phase (1947 – 74)
• It took many years to acquire the country’s economic and financial independence (has it been achieved by today or not??)
• The banking and financial sector, like industry, were little developed in ’47
• Areas which became Pakistan were severely under-represented in terms of banking and financial services
• No Central bank; The Reserve Bank of India, which was legally a common property of both India and Pakistan, continued to serve as a currency and banking authority for Pakistan till ‘48
The First Phase (1947 – 74)
• Prior to independence, only one of the 99 listed scheduled banks had its office in Pakistan
• United India had 3,469 branches of banks, but only 631 were located in areas that were to become Pakistan (East and West)