Globalization of Financial Institutions
From this particular diagram, it could be noted that privatization of the different sectors that make up the systems of the different developing communities around the world have a strong impact on the overall progress of the entire nation in terms of economic stability. It could be noted that through the years of applying the culture of privatizing the different sectors of industries within the different countries around the world, several progressive measures of economic stability had been fulfilled.
The completion of the said programs made it possible for the banks to regain their reputation of standing as the foundation of financial strength of the different nations. In this regard, seeing the importance of privatizing financial institutions with the impact of national development into the economic systems of the developing countries around the world implies the fact that bank privatization indeed leaves an important part of growth element for different countries around the world.
Giving this a focus on the part of the economic watch groups around the world; bank privatization should be given attention continuously as it may as well become the key reason that could appraise the economic situations of the different developing areas around the world today. Conclusion Many people put money into banks. In turn, the banks lend the money to other people or businesses that want to borrow it. What is left is kept in cash or is invested in buildings, equipment and securities (usually government securities).
The portion kept in cash is usually a very small percentage of total assets. What would happen if bank depositors in great numbers went to their banks and asked for their money back in cash? If that happened on a large scale, the banking system would be unable to honor its obligations; nor would any government insuring agencies. Aside from such a possible catastrophe, most of the people presume that they can get their money back at any time by merely asking for it.
But many banks can legally withhold money for 30 days. A typical regulation of this kind may read: “The bank may allow monies to be withdrawn from savings accounts at any time without notice, but it reserves the right to demand notice of withdrawal not to exceed thirty days on any or all accounts. ” (Nikiel, 2002, 13) So, in difficult times, money would be unavailable for 30 days. Yet, at present, banks are generally as safe as most places to keep money.
As major element of national progress, privatizing these financial institutions naturally bring up the possibility of making it certain that progress among developing countries could still be attained through making business entrepreneurs handle the process of balanced wealth distribution within the human society at present towards the future.
Berger, Allen N. , DeYoung, Robert, Genay, Hesna, and Udell, Gregory F. , “Globalization of Financial Institutions: Evidence from Cross-Border Banking Performance,” Brookings-
Wharton Papers on Financial Services, Vol. 3, 2000. Bonin, John P. , Mizsei, Kalman, Szekely, Istvan and Wachtel, Paul, Banking in Transition Economies: Developing Market Oriented Banking Sectors in Eastern Europe, Edward Elgar Publishing Limited (Cheltenham, U. K. ), 1998. Bonin, John P. , Hasan, Iftekhar, and Wachtel , Paul, “Bank Performance, Efficiency and Ownership in Transition Countries,” Paper presented at the Ninth Dubrovnik Economic Conference, sponsored by the Bank of Croatia, June 26-28, 2003.
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