Introduction
In the 1990s, The Philippine Financial system was composed of banking institutions and non-bank financial intermediaries such as banks, specialized government banks, thrift banks, rural banks, offshore banking units, building and loan associations, investment and brokerage houses, and finance companies. The Central Bank and the Securities Exchange Commission maintained regulatory and controlled the financial system. At this time, the Philippines had a relatively complex financial system, yet the level of intermediation was low in comparison to the size of the economy. It was during the late 1970s and early 1980s when they first started implementing policies in order to strengthen the system, but financial crises occurred between the years 1981 to 1983 which had caused for the proposed policies to not take effect. In the year 1986, the financial community has undertaken recovery efforts. Philippine National bank, a government owned commercial bank, was the largest among all commercial banks in the Philippines. It was created for the purpose of providing agricultural credit for exports crops. Philippine National bank accounted for 25 percent to 30 percent of commercial bank assets in between the years 1970 to 1980 and the accumulation of non-performing assets in the year 1987, led for the Philippine National Bank’s asset share to fall by half of its size. Moreover, the economic crisis that happened in the mid 1980s also contributed for the Philippine National Bank to decrease its asset share into half. The following year, there were about twenty privately owned domestic banks and four branches of foreign banks engaged in commercial banking.
In the year 1991, The Philippine Government managed three special banks: The Development bank of the Philippines, The Land Bank of the Philippines and the Philippine Amanah Bank. The Development bank was established in order to facilitate post war rehabilitations and also to provide long-term finance. On the other hand, The Land bank of the Philippines was designed in the early 1970s, in order to fund the government and the reform program. Lastly, Philippine Amanah Bank was founded in the mid 1970s, which catered the Muslim community in the southern part of the Philippines. It was also this time wherein a few of the domestic banks in the Philippines were permitted to take foreign currency deposits and engage in foreign-currency lending.
Moreover, economic and political crises have also affected the financial system, specifically during the year ________ when Benigno Aquino was assassinated. This occurrence resulted to the downfall of the banking industry, which affected predominantly the smaller institutions.
The Savings and Loans Crisis of the 1980’s and early 90’s created the greatest banking collapse since the Great Depression in 1929. Over half the S & L’s failed, along with the FSLIC fund that was created to insure their deposits.
Latin America financial crisis are very elegance and seem very hard and impossible to solve. Although it is, here are some way taken by Latin America in means to reduce their financial problems. Firstly, according to Dr. Luisa Blanco in his book of Latin America and the Financial Crisis of 2008: Lessons and Challenges: " Just like the United States, many Latin American countries used fiscal stimulus through greater government spending to address the crisis. Because of the reforms they implemented in the 1990s, which forced governments to be more fiscally responsible, many Latin American countries had more room to maneuver and to implement these fiscal policies." (Blanco, 2010)
Cabral, R. (2013). A perspective on the symptoms and causes of the financial crisis. Journal of Banking & Finance, 37, 103-117
Nor did banks escape the economic blows they had helped deliver to others. Although more than seven thousand financial institutions had gone under between 1920 and 1929 (providing evidence of underlying economic weakness well before the fateful October 1929 crash), more than nine thousand additional bank failures occurred in the three years between the stock market crash and the end of Hoover’s term as president in 1933. (Chalberg 21)
Banks failed due to unpaid loans and bank runs. Just a few years after the crash, more than 5,000 banks closed.... ... middle of paper ... ... Print.
Seibel, Hans Dieter and Fabrizio Felloni. 2005. “Mainstreaming Banking with the Poor in the Philippines.” Internationales Asienform 36(3/4): 361-375.
In 1975, the Islamic Development Bank opened in Saudi Arabia and gave the islamic finance industry an international presence. It recruited member countries and offer them financial products to promote economic and comunity development.
At that time National Savings and Investment Bank was the only bank which was incorporated by a Parliament Act. There was no regulatory framework which led private sector savings banks to carry out its activities. The main problem that PSDB had to face was that the bank did not have “parate execution” rights which allows to sell mortgage property when loans are defaulted by customers. This “parate execution” gives the rights to recover the loan which defaulted by the customers by passing a board meeting resolution and placing paper advertisement informing about the decision. Since Pauma bank did not have that right, it had to consult civil law to recover loans but it was not practical for the bank.
Can anyone imagine what will happen to Malaysia after a few more decades? Debt crisis in Malaysia is getting more severe due to lack of management among individuals. Serious debt crisis might lead to bankruptcy to our country. Nation leaders should lead others away from debt. If this scenario continues, Malaysia might follow the footstep of Greece, Spain, Italy, and Portugal. Debt crisis can be avoided by providing trainings and courses to the employees, improve individual personal finance management and filtering candidates in hiring process.
As the world has recently passed through the global financial crisis that begun in 2008 in the USA with the banks’ collapsing, analysts are giving different opinions and making new economic hypothesizes about the origin of, as well as the process of different countries escaped from the crisis. Among all these new “theories”, the case of Islamic banks is interesting in terms of its nature and consequences. In my essay, I will try to highlight the basic principles of the Islamic finance, the reasons of the restriction of interest, the most important tools used by Islamic banks in economic activities and brief explanation of them, and finally my view point of the probable future improvement of the Islamic financial system.
Warwick J. McKibbin, and Andrew Stoeckel. “The Global Financial Crisis: Causes and Consequences.” Lowy Institute for International Policy 2.09 (2009): 1. PDF file.
First, according to Section 2 IBA 1983, Islamic Banking Business is business whose aims and elements do not involve any element which is not approved by the religion of Islam. Based on the definition stated, it is clear that the Islamic Banking practices must according to or complients with the Shari’ah obliged in the Al-Quran and As-Sunnah. In conjuction with the Shari’ah appliances, the Islamic banking business must not include or prohibited involvement of illegal activities. Unlike Islamic Banking, Conventional Banking practises its system based on man-made laws and not included any religious guidelines to support their systems.
The Philippines has long been a country with a struggling economy. Ever since World War II, they have struggled to have a steady government and labor system. Independence did not bring any social changes to the country. The hacienda system still persists in the country, where large estates are farmed by sharecroppers. More the half the population are peasants and 20 percent of the population owns 60 percent of the land. Although the sharecropper is supposed to receive half of the harvest, most of the peasant's actual income goes to paying off debts to the landowner. Poverty and conflict strained the industrial growth of the country with many Presidents trying to fix the problems, but failing to do so. Factors that have faced the country are there is almost 9 percent unemployment, and the country suffers from the consequences of a balance of trade deficit. With the resources that the Philippines have, they are capable of pulling themselves out of the economical hole they are in and being up to par with their successful neighboring countries.
It is a known fact that the banking industry plays a huge role in today’s society, the industry has grown rapidly of many decades and still growing. The banking sector is that sector of the society that is actually responsible for the handling of financial assets for other sector of the economy, they do this by investing the financial assets in order to create more wealth in the society while regulating all the activities involved in the process. (What is the banking Sector 2015)
Banks sector is playing an important role in economies. The banking industry, as the classic and the most influential of financial intermediaries, facilitates economic operations. Financial sector in the worldwide country has been changes over these years by looking the changes of financial structure environment and economic conditions. Thus, banks are a very important point to financial system and play an important role as control and contribute growth to the economic sector.