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Financial Liberalization Essay

7130 words - 29 pages

Chapter 1Introduction1.1 Statement of the ProblemsThe topic of the project paper or report is to find out the impact of interest rate reforms or liberalization on financial development and thereby economic growth. The statement of the problems is to whether interest rate liberalization as originally prescribed by the McKinnon and Shaw hypotheses or can unambiguously lead to economic growth.1.2 Title of the ReportIt is necessary to select a topic in writing a report. A well-defined topic reflects what is going on to be discussed throughout the report. The topic "Impact of Interest Rate Reforms or Liberalization on Financial Development & Economic Growth" selected by me is duly approved by the respective supervisor. The report has discussed how the interest rate liberalization enhances financial development and thereby causes economic growth.The Title of the report "Impact of Interest Rate Reforms or Liberalization on Financial Development & Economic Growth" especially focuses on SAARC.1.3 Origin of the StudyAs a partial requirement of B.B.A. program we are required to prepare internship report. This report has been prepared during the three month's Internship Program in Bank Asia Limited, Dhanmondi Branch. In the classroom we get the opportunity to know the theoretical part of the subject. But without practical orientation it is somewhat difficult to grasp the core concept. In the project paper I have collected data from World Bank (Data). Beside this I have also collected data from published literature, Central Bank of selected countries. The main variables are deposit interest rate, lending interest rate, inflation rate, gross national income, M2 over GDP and GDP growth rate. In this report, I have tried to find out the relationship between interest rate liberalization and financial development and thereby economic growth.1.4 Rationale of the StudyThis report is a part of my academic program. The BBA program having 120 credits in total contains three (3) credit hours on the Internship Program and Project Paper. The internship program has been set for three (3) months period. I believe this study will be beside me in future, especially if I get myself involved in banks and other financial institutions. The program has helped me a lot to understand the organizational atmosphere and behavior in general banking. From the internship program I have become familiar with different aspects of banking operations like customer service, clearing & cash department, accounts department, credit department and foreign trade department as an intern in Bank Asia Limited.1.5 Objectives of the StudyThe primary purpose of writing this report is to fulfill the requirement of BBA program and the general purpose of the study is to analyze the impact of interest rate liberalization on financial development and economic growth. The findings from the empirical study and some recommendations have been made. However, the specific objectives of the study are as...

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