Consequences and Choices

  • Gregory W. Fuller


Chapter one argued that liberalization forced banks and other financial firms into a new competitive environment. Financial institutions were compelled to adapt, which they did by consolidating, expanding, and innovating. The success of these adaptations was mixed. On the one hand, postliberalization financial sectors were far more capable of mobilizing resources. On the other, they increasingly tended to allocate resources to the household and financial sectors. This marked a reversal of the historical relationship between households and firms: instead of households saving and businesses borrowing, liberalization pushed both sectors to do the reverse.


Asset Price Institutional Investor Pension Fund European Central Bank Private Equity 
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© Gregory W. Fuller 2016

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