Special Edition-07.pdf - Lahore School of Economics

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Muhammad Arshad Khan and Sajawal Khan
Table-3: Selected Indicators of Vulnerability in Pakistan
(Period ended 1996)
Macro Indicator
Inflation > 5% 10.7
Fiscal Deficit > 2% of GDP 6.5
Public Debt > 50% of GDP
Current Account Deficit > 5% of GDP 7.4
Short-term Flows > 50% of the Current Account Deficit
Capital Inflows > 5% of GDP
Ratio of Short-term Debt to International Reserves >1
Financial Sector Indicators
Recent Financial Sector Liberalization
Recent Capital Account Liberalization
Credit to the Private Sector > 100% of GDP 17.1%
Credit to the Private Sector (real growth) > 20%
Emphasis on Collateral when making loans
Estimated Share of Bank Lending to the Real Estate Sector>20%
Stock of Non-performing Loans > 10 % of Total Loans
Stock Market Capitalization as %age of GDP 20.11%
Source: Lindgren et al (1999), p. 11
III.C. Third Phase of Financial Sector Reforms (2002-2004)
In this phase there were several major changes and significant
positive shifts in the regulatory atmosphere to strengthen the financial
system and introduce structural improvements. Some of the more important
developments have been seen in the following areas:
Consolidation, Privatization and Regulation: During the 1990s,
mushroom growth in commercial banks and non-bank financial institutions
has been witnessed, a few of which have low capitalization,
inadequate/inappropriate staffing, poor risk management practices and a
marginal portfolio quality. The central bank sought out to consolidate the
Yes
Yes
Yes
Yes
Yes
No
No
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Yes