Overview of the National Banking Systems and Reforms

Abstract

A well-functioning financial system is instrumental in attaining balanced and sustainable development. Such a system increases the availability of funding by mobilising idle savings, facilitating transactions and attracting foreign investments. It can also improve the allocation of financial resources by enhancing risk management, transparency and corporate governance practices and reinforcing property and creditor rights. Developed financial systems are crucial in providing funding to more opaque borrowers, such as the first-time and low-income borrowers or small and medium-sized enterprises (SMEs), which represent a significant proportion of economic activity but often lack the internal resources to grow. In short, financial development can serve to ameliorate the distribution of opportunities and improve income equality.