Den senaste finanskrisen har visat att det finns ett behov av ökad övervakning av aktörerna på den finansiella marknaden. Ett sätt att förbättra övervakningen är genom att öka förståelsen för företagens affärsmodeller. Syftet med detta examensarbete är att hitta likheter i affärsmodellerna hos svenska kreditinstitut och hos svenska filialer av utländska banker. Mer specifikt syftar denna studie till att hitta grupper av företag, i denna rapport kallat kluster, med liknande affärsmodell och till att identifiera existerande affärsmodeller på den svenska bankmarknaden. Informationen som användes i studien är från årsredovisningar som rapporterades till Finansinspektionen för åren 2000, 2005, 2010 och 2013.  För att möjliggöra en jämförelse mellan olika aktörers data har kvoter skapats utifrån deras balans- och resultaträkningar. För att reducera mängden data och för att få ett fåtal okorrelerade variabler användes principalkomponentanalys. Metoden som användes för att hitta klustren är en hierarkisk agglomerativ metod kallad Wards metod. Antalet kluster bestämdes genom att använda Calinski- Harabasz-index. Bootstrapping användes för att testa stabiliteten hos de identifierade klustren.  Denna studie visar att mönster existerar på den svenska bankmarknaden och att det är möjligt att hitta kluster av företag med liknande affärsmodell. Svenska filialer av utländska banker och svenska kreditinstitut har studerats separat. För svenska kreditinstitut hittades sex kluster och för att beskriva affärsmodellerna kallas de: Universalbanker, Sparbanker, Leasingföretag, Icke inlåningsfinansierade kreditinstitut, Servicefokuserade kreditinstitut och Övriga kreditinstitut. De mest stabila klustren, det vill säga de med högst likhet, är Sparbanker och Leasingföretag. Klustret med lägst likhet är Universalbanker och detta bör ses som ett mönster i använd data snarare än ett kluster. För de svenska filialerna av utländska banker hittades tre kluster och dessa kallas: Banker, Servicefokuserade kreditinstitut och Övriga kreditinstitut. Dessa kluster är stabila. / The recent financial crisis has emphasized the need for improved supervision of the actors on the financial market. One way to improve supervision is through better understanding of business models. The aim with this thesis is to find similarities in business models for Swedish credit institutions and for Swedish branches of foreign banks. More specific this study aims to find groups of companies, in this paper called clusters, with similar business models and identify existing business models in the banking market. The data used in this study are financial statements reported to the Swedish Financial Supervisory Authority for the years 2000, 2005, 2010 and 2013. In order to compare the companies’ data, ratios from the income statements and balance sheets have been created. To reduce the amount of data and arrive at a smaller set of uncorrelated variables, principal component analysis was used. The method used for finding the clusters was a hierarchical agglomerative clustering method called Ward’s method. The number of clusters was determined using Calinski-Harabasz index. Bootstrapping was used in order to test cluster stability. This study shows that patterns in the Swedish banking sector exist and that it is possible to find clusters of companies with similar business models. Swedish branches of foreign banks have been treated separately from Swedish credit institutions. For Swedish credit institutions a division into six clusters was found to be most suitable and in order to describe the business model the clusters are named: Universal banks, Savings banks, Leasing companies, Non-deposit funded credit institutions, Service-focused credit institutions and Other credit institutions. The most stable clusters, that are the clusters with highest similarity, are Savings banks and Leasing companies. The cluster with lowest stability is Universal banks and it could be considered as a pattern in the data rather than a cluster. For Swedish branches of foreign banks, three clusters were found to be most suitable and the clusters are named: Banks, Service-focused credit institutions and Other credit institutions. These clusters are stable.

Made available in DSpace on 2016-03-15T19:34:09Z (GMT). No. of bitstreams: 0 Previous issue date: 2014-02-14 / Coordenação de Aperfeiçoamento de Pessoal de Nível Superior / The actual stage of capitalism is characterized by financialization of economy. This fact associated to the importance which financial institutions already had in the financial system strengthens their relevance at the same time that attract a lot of issues about the appropriated treatment they have receipt in order to continue in a normal operation and, in the eventual and natural crisis, the manner to reduce its negative effects and to contain the contagion. The universal character of the financial activity struggles with the local nature of sovereignty, which controls money and the operations of the institution in its territory. An international consensus leads to a pursuit for convergence in financial regulation, in order to avoid regulatory arbitrage and competitive problems, what is shown manly through the Basel Committee on Banking Supervision recommendations. Among these recommendations, there are the Core Principles for Effective Banking Supervision, which, in its turn, supports the need of flexible and quick instruments to supervisors adopt prompt measures to maintain the institution of the financial system operating in a prudential manner at the same time that these measures intend to avoid situation in what a special regime be the only alternative, with the problems associated with it. These are the preventive prudential measures, which will be analyzed in this dissertation, according to Brazilian law. / A fase presente do capitalismo é caracterizada pela financeirização da economia. Esse fato somado à importância que as instituições financeiras já possuíam no sistema financeiro reforça sua relevância ao mesmo tempo em que atrai uma série de preocupações com o tratamento apropriado que devem receber para que se mantenham em adequado funcionamento e para que, nas eventuais e naturais crises, sejam minoradas as consequências danosas e contidos o efeito de contágio. O caráter universal da atividade financeira se choca com a natureza local da soberania que controla em seu limitado território a moeda e o funcionamento das instituições. Um consenso internacional surge para buscar uma convergência na regulação dessa atividade, de modo a evitar arbitragem regulatória e problemas concorrenciais, o que se vê principalmente pelas recomendações oriundas do Comitê de Basileia de Supervisão Bancária. Entre essas recomendações, encontram-se os Princípios Básicos para uma Supervisão Bancária Eficaz, que, por sua vez, pregam a necessidade de instrumentos flexíveis e ágeis para as autoridades supervisoras adotarem prontas medidas para que as instituições do sistema financeiro se mantenham dentro dos limites prudenciais, com o intuito de evitar situações em que a decretação de um regime especial seja a única alternativa, com os males que lhe são inerentes. Essas são as medidas prudenciais preventivas, cuja análise, sob o ponto de vista jurídico, será realizada no presente trabalho.

為因應金融環境及經營風險日益複雜化，改進現行資本協定缺點，及鼓勵銀行加強風險管理，巴賽爾銀行監理委員會（以下簡稱巴賽爾委員會）於1999年6月發布「新巴賽爾資本協定」(The New Basel Capital Accord)第一版草案，在歷經2001年1月第二版修訂草案及三次量化影響評估後，2003年4月29日發布第三版修訂草案，預計2004年中正式定案，自2006年開始實施。 「新巴賽爾資本協定」主要修訂內容包括：1.強調「最低資本需求」、「監理審查程序」及「市場制約機能」等三大支柱；2.除原有信用風險及市場風險外，增加作業風險應計提資本；3.修訂及增訂信用風險及作業風險資本計提方法，除標準法外，允許銀行使用內部風險模型計提信用風險所需資本，並對信用風險抵減及資產證券化作進一步規範。本次修訂幅度頗大，預期對我國銀行業及金融監理機關均將產生重大影響。 美國實施新資本協定預計採雙軌制，亦即國際性大型銀行採用信用風險IRB法及作業風險AMA法，其他銀行則沿用現行資本計提方法，惟其強調原有之槓桿比率及立即導正措施(PCA)仍將繼續適用，將進行量化影響評估以分析公平競爭議題，並已陸續發布企業授信內部評等系統及作業風險進階衡量法之監理準則。英國則採不強迫、不禁止原則，由銀行自行衡酌成本效益，決定是否採用進階方法，並將進一步研擬相關規範。我國係由財政部金融局及銀行公會組成共同研究小組，其下分六組：信用風險標準法組、信用風險IRB法組、作業風險組、市場紀律及資產證券化組、監理審查組、市場風險組，分四階段研究與現行規範之差異、可能衝擊、我國可採行內容及研擬法規修訂。依據中央銀行金檢處92年12月對49家本國銀行進行調查，6家銀行計畫採用內部評等基礎法計提信用風險所需資本，43家銀行則採標準法或簡化標準法；作業風險則19家將採標準法，30家採基本指標法。 為協助我國順利推動新資本協定，研擬實施建議如下： 一、 成立監理機關專責小組，統籌實施事宜及彙整各界建議形成決策 二、 評估確定實施範圍及時程 三、 實施第一支柱 (一) 進行量化影響評估 (二) 儘早研擬監理機關裁量項目 (三) 瞭解銀行風險管理實務及準備狀況 (四) 鼓勵銀行檢視資料庫，增進風險管理資訊系統 (五) 建置全國性信用資料庫，建立我國信用風險指標 (六) 研擬我國適用之新資本協定草案及監理審查原則 (七) 加強監理機關間資訊共享 四、 實施第二支柱 (一) 要求銀行加強資本適足性自我評估 (二) 訂定銀行資本適足性審查標準及建立溝通機制 (三) 提高銀行資本適足性目標比率，建立資本緩衝 (四) 採行及早干預及立即導正措施 五、 實施第三支柱 (一) 評估我國揭露現況及銀行產生新資本協定揭露資訊之可行性 (二) 採兩層次揭露，並定期評估銀行揭露情形 六、 檢視我國資本適足性有關法規及計算方法說明 七、 其他監理議題 (一) 成立風險模型評估小組，加強監理人員專業能力訓練 (二) 金融監理架構改以風險為導向

RESUME La construction d un systeme financier sain et concurrentiel capable de mobiliser de facon substantielle des hauts niveaux d epargne et l amelioration des normes de supervision bancaire et financier pour assurer la stabilite du systeme sont deux des recommandations souvent faites par les institutions internationales pour permettre aux pays africains de participer pleinement a l expansion de la prosperite mondiale et a beneficier de la globalisation du commerce des services financiers. Cette these essaie de trouver les voies et moyens susceptibles de contribuer a l amelioration et au renforcement de la supervision bancaire au Congo, et in fine [le secteur bancaire etant le plus important du systeme financier] permettre l eclosion d un systeme financier moderne et efficace qui rencontre les normes internationales. Dans une premiere etape qui consiste en un etat des lieux du systeme financier congolais et en une analyse critique de la gestion bancaire ( chapitre 1 et chapitre 2 ); les analyses : - ressortent les caracteristiques du systeme financier congolais ; - soulignent les contraintes structurelles ayant entrave trois decennies de gestion bancaire ; - evaluent les chances de succes des reformes mises en oeuvre par les autorites; - proposent en des termes generaux, les ameliorations a porter au cadre reglementaire et de supervision du secteur bancaire afin de reduire les imperfections, de renforcer l efficacite et la stabilite du systeme dans son ensemble. Dans une seconde etape, un menu plus restreint de propositions faites au terme de l etat des lieux du systeme financier et de l analyse critique de la gestion bancaire est passe en revue. Les contributions de la these dans cette etape consistent : - en la proposition d outils concrets de supervision bancaire pour faire face a la carence d outils de gestion prudentielle preventive ; (chapitre 3) - en recommandations pour ameliorer : la politique de provisionnement des creances et le fonctionnement des institutions de microfinance ; ( chapitre 4) - a degager dans une demarche d analyse strategique, les pistes susceptibles de contribuer a l amelioration de la sante et la solidite du systeme financier congolais apres evaluation prealable de sa competitivite (chapitre 5) SUMMARY The construction of an healthy and competitive financial system able to mobilize high levels of saving and the improvement of the standards of banking and financial supervision to ensure the stability of the system are two of the recommendations often made by international institutions to help African countries to take part in the expansion of world prosperity and to profit from the globalization of financial services. This thesis tries to find the ways to contribute to the improvement and the reinforcement of the banking supervision in Congo, and in fine [ the banking environment being most significant of the financial system ] to allow the blossoming of a modern and effective financial system which meets international standards. In a first stage which consists in an overview of the Congolese financial system and in a critical analysis of the banking management ( chapter 1 & chapter 2) ; our analyses : - release the characteristics of the Congolese financial system ; - underline the structural constraints having blocked three decades of banking management ; - evaluate the chances of success of the reforms implemented by the authorities ; - propose in general terms, the improvements to be carried in order to reduce the imperfections of the banking supervision, to reinforce the effectiveness and the stability of the banking system. In the second stage, a more restricted menu of proposals made at the end of the first stage is reviewed. The contributions of the thesis in this stage consist: - in the proposal of concrete tools for banking supervision to face the deficiency of preventive prudential management tools; ( chapter 3) - in recommendations to improve : the policy of provisioning bad debts and the management of Microfinance institutions; (chapter 4) - in an evaluation of the competitiveness of the Congolese financial system and in the identification of ways which can contribute to the improvement of its safety and solidity by using a strategic analysis approach. ( chapter 5)

Les banques sont des institutions à part, car elles sont au coeur du fonctionnement des économies et de la dynamique de croissance des pays. Leurs services représentent de ce fait un bien public, et il est donc primordial de les maintenir éloignées autant que possible du risque de faillite. Toutefois, des crises bancaires surviennent régulièrement et affectent les sociétés, souvent de manière durable et profonde, à l’image de la crise financière des subprimes qui a éclaté en 2007, et dont nous ne connaissons pas encore toutes les conséquences désastreuses. Pour prévenir le risque de faillite et de crises bancaires, les autorités de régulation nationales ont développé des filets de sécurité qui, en partie, suivent les standards internationaux de réglementation et de supervision bancaire développés par le Comité de Bâle sur le contrôle bancaire, sous l’égide de la Banque des Règlements Internationaux. Cependant, les crises récurrentes se produisent et nous montrent les limites de la régulation bancaire et, surtout, nous indiquent que celle-ci doit être en permanence revue et adaptée, de façon dynamique, à l’évolution des systèmes bancaires et de l’innovation financière. L’un des principaux objectifs est de s’assurer que les banques soient suffisamment et solidement capitalisées pour faire face à des pertes exceptionnelles inattendues. Par ailleurs, il est primordial, afin d’assurer une stabilité financière durable, que les superviseurs bancaires soient à même de contrôler efficacement les banques et d’entreprendre les actions nécessaires pour que ces dernières demeurent à des niveaux de risques engagés raisonnables et qui ne menacent ni leur solvabilité, ni celle de l’ensemble du système bancaire. Enfin, les banques sont censées être régulées par le marché (discipline de marché), sur la base des informations qu’elles sont tenues de divulguer publiquement, sur leur santé financière. Dans ces politiques de régulation bancaire et de prévention du risque de crise, il ne faut pas oublier le rôle de l’assureur dépôt, à qui certains économistes et instances internationales veulent prêter de plus en plus de pouvoir sur les banques. Nous montrons dans notre travail de thèse, à travers des analyses empiriques menées sur des données contemporaines, les insuffisances des politiques de régulation et de supervision bancaire, les erreurs commises dans l’approche de la régulation bancaire, et nous présentons les aspects qu’il serait souhaitable de prendre en compte, pour approcher une politique de réglementation et de supervision bancaire plus efficace, et dynamique, dans l’objectif de maintien de la stabilité bancaire. Nous avançons notamment qu’il est nécessaire de mieux prendre en compte la nature de l’activité des différents types d’institutions financières qui composent les systèmes bancaires, et dont la nature et le degré d’exposition aux risques ne sont pas les mêmes. Il est également important de considérer les caractéristiques de l’environnement institutionnel dans lequel évoluent les banques, de manière à développer une structure de supervision adaptée et efficace. En définitive, nous étudions dans cette thèse un large ensemble de déterminants économiques et institutionnels, susceptibles d’impacter la stabilité bancaire, de manière à identifier celles des politiques de régulation qu’il s’agirait de mettre en oeuvre, afin d’assurer dans l’avenir un meilleur maintien de la stabilité financière des banques. / Banks are special institutions because they are central to the functioning of economies and to economic growth. Their services represent a public good. Therefore, it is essential to keep them as far as possible from risk of bankruptcy. However, banking crises occur regularly and affect societies, often dramatically and over a long period, like the current subprime financial crisis which burst into 2007, and which consequences are still not very well perceived. To prevent the risk of bankruptcy and banking crisis, the national authorities of regulation have developed safety nets. These follow partially the international standards of regulation and banking supervision developed by the Basel Committee on Banking Supervision under the aegis of the Bank for International Settlements. However, recurrent crises occur and show us the limits of the banking regulation and, especially, indicate that the latter should be continually revised and adapted to the evolution of banking systems and financial innovations. One of the main goals is to make sure that banks are enough capitalized to face unexpected large losses. In order to achieve long-lasting financial stability, it is essential that banking supervisors can monitor efficiently banks. By doing so, the risk taken by banks would be sustainable and would not threaten either their own solvency or the whole banking system solvency. Finally, banks are supposed to be regulated by the market (market discipline) on the basis of information about their financial health which should be disclosed publicly. Along the policies of banking regulation and crisis risk prevention, one should not forget the role of the deposit insurers. Indeed, some economists and international authorities want to attribute more power over banks to deposit insurers. In our research, the empirical analysis, based on contemporary data, show the weakness of the actual regulation and banking supervision policies and the mistakes in banking regulation. Different features of the banking system that should be taken into account for an efficient implementation of regulation and banking supervision policies are also discussed in this work. Hence, we suggest that the type of financial institutions' activities should be better taken into account as it changes with the degree of risk exposure. We also find that it is important to consider the characteristics of the institutional environment in which banks evolve in order to develop a suitable and efficient supervision agency. To summarize, we study in this thesis a large range of economic and institutional determinants of the banking system, which are likely to affect the banking stability. By doing so, we are able to identify the regulation policies which would be the most likely to preserve the financial stability of banks.

The aim of this research is to show the effects of financial liberalisation on emerging market economies, how these economies removed restrictions on financial institutions so that they can be globally integrated, and to show the flow of international finance in and out of a country. This research also illustrates how the financial system in these economies moved from being government-led to being market-led. The main finding of this research is that many countries failed to reap the benefits of liberalisation because of weaknesses in the regulatory structure, undercapitalised banks, volatile markets and contagion effects. The research concludes that the long-term gains of liberalisation certainly supersede short-term instability of liberalisation. Thus, for financial liberalisation to have predominantly positive effects, attention should be drawn to the importance of a more prudent regulatory and supervisory environment. Furthermore, financial liberalisation must be accompanied by a sound institutional infrastructure, proper conduct of monetary and fiscal policies, a reduction in corruption, and an increase in transparency. In addition, liberalisation should be a gradual process whereby the right measures are taken in the right sequence. / Economics / M. Comm. (Economics)

The opening of a bank account serves as the genesis of a bank customer relationship. It is imperative that the establishment of a bank customer relationship be regulated by law. Both the common law and statutory law regulate the admission of new clients to the realm of banking. It is a minimum requirement, in terms of both statutory and common law, that the identity of a prospective client who wishes to open a bank account must both be established and verified. This, the need to know one’s customer, is not only good law but common sense and an effective measure to prevent criminals from accessing the banking system. Parties who work together must know each other. The need to establish and verify the identity of a potential customer is commonly referred to as the Know Your Customer standards, alternatively the Customer Due Diligence framework. The Know Your Customer standards are neither unique to South Africa nor have their origins in South Africa. The Know Your Customer standards are international standards which the Financial Action Task Force and the Basel Committee on Banking Supervision have been advocating for quite some time. A confluence of the Recommendations of the Financial Action Task Force and the Basel Committee on Banking Supervision greatly influenced the birth of the Financial Intelligence Centre Act in South Africa. The Financial Intelligence Centre Act 38 of 2001 prescribes the steps that a bank has to take in order to establish and verify the identity of a potential client. It will be shown in this dissertation that the identification and verification regime established by the Financial Intelligence Centre Act 38 0f 2001 and the common law are not fool proof. This dissertation makes recommendations on how the current loopholes that exist in the law can be addressed. / Mercantile Law / LLM

The opening of a bank account serves as the genesis of a bank customer relationship. It is imperative that the establishment of a bank customer relationship be regulated by law. Both the common law and statutory law regulate the admission of new clients to the realm of banking. It is a minimum requirement, in terms of both statutory and common law, that the identity of a prospective client who wishes to open a bank account must both be established and verified. This, the need to know one’s customer, is not only good law but common sense and an effective measure to prevent criminals from accessing the banking system. Parties who work together must know each other. The need to establish and verify the identity of a potential customer is commonly referred to as the Know Your Customer standards, alternatively the Customer Due Diligence framework. The Know Your Customer standards are neither unique to South Africa nor have their origins in South Africa. The Know Your Customer standards are international standards which the Financial Action Task Force and the Basel Committee on Banking Supervision have been advocating for quite some time. A confluence of the Recommendations of the Financial Action Task Force and the Basel Committee on Banking Supervision greatly influenced the birth of the Financial Intelligence Centre Act in South Africa. The Financial Intelligence Centre Act 38 of 2001 prescribes the steps that a bank has to take in order to establish and verify the identity of a potential client. It will be shown in this dissertation that the identification and verification regime established by the Financial Intelligence Centre Act 38 0f 2001 and the common law are not fool proof. This dissertation makes recommendations on how the current loopholes that exist in the law can be addressed. / Mercantile Law / LLM

RESUME La construction d un systeme financier sain et concurrentiel capable de mobiliser de facon substantielle des hauts niveaux d epargne et l amelioration des normes de supervision bancaire et financier pour assurer la stabilite du systeme sont deux des recommandations souvent faites par les institutions internationales pour permettre aux pays africains de participer pleinement a l expansion de la prosperite mondiale et a beneficier de la globalisation du commerce des services financiers.<p><p>Cette these essaie de trouver les voies et moyens susceptibles de contribuer a l amelioration et au renforcement de la supervision bancaire au Congo, et in fine [le secteur bancaire etant le plus important du systeme financier] permettre l eclosion d un systeme financier moderne et efficace qui rencontre les normes internationales.<p><p>Dans une premiere etape qui consiste en un etat des lieux du systeme financier congolais et en une analyse critique de la gestion bancaire ( chapitre 1 et chapitre 2 ); les analyses :<p>- ressortent les caracteristiques du systeme financier congolais ;<p>- soulignent les contraintes structurelles ayant entrave trois decennies de gestion bancaire ;<p>- evaluent les chances de succes des reformes mises en oeuvre par les autorites;<p>- proposent en des termes generaux, les ameliorations a porter au cadre reglementaire et de supervision du secteur bancaire afin de reduire les imperfections, de renforcer l efficacite et la stabilite du systeme dans son ensemble.<p><p>Dans une seconde etape, un menu plus restreint de propositions faites au terme de l etat des lieux du systeme financier et de l analyse critique de la gestion bancaire est passe en revue. Les contributions de la these dans cette etape consistent :<p>- en la proposition d outils concrets de supervision bancaire pour faire face a la carence d outils de gestion prudentielle preventive ;(chapitre 3)<p>- en recommandations pour ameliorer :la politique de provisionnement des creances et le fonctionnement des institutions de microfinance ;( chapitre 4)<p>- a degager dans une demarche d analyse strategique, les pistes susceptibles de contribuer a l amelioration de la sante et la solidite du systeme financier congolais apres evaluation prealable de sa competitivite (chapitre 5)<p> <p>SUMMARY<p>The construction of an healthy and competitive financial system able to mobilize high levels of saving and the improvement of the standards of banking and financial supervision to ensure the stability of the system are two of the recommendations often made by international institutions to help African countries to take part in the expansion of world prosperity and to profit from the globalization of financial services. <p><p>This thesis tries to find the ways to contribute to the improvement and the reinforcement of the banking supervision in Congo, and in fine [ the banking environment being most significant of the financial system ] to allow the blossoming of a modern and effective financial system which meets international standards. <p><p>In a first stage which consists in an overview of the Congolese financial system and in a critical analysis of the banking management ( chapter 1 & chapter 2) ;our analyses :<p>- release the characteristics of the Congolese financial system ;<p>- underline the structural constraints having blocked three decades of banking management ;<p>- evaluate the chances of success of the reforms implemented by the authorities ;<p>- propose in general terms, the improvements to be carried in order to reduce the imperfections of the banking supervision, to reinforce the effectiveness and the stability of the banking system. <p><p>In the second stage, a more restricted menu of proposals made at the end of the first stage is reviewed. The contributions of the thesis in this stage consist:<p>- in the proposal of concrete tools for banking supervision to face the deficiency of preventive prudential management tools; ( chapter 3)<p>- in recommendations to improve :the policy of provisioning bad debts and the management of Microfinance institutions; (chapter 4)<p>- in an evaluation of the competitiveness of the Congolese financial system and in the identification of ways which can contribute to the improvement of its safety and solidity by using a strategic analysis approach. ( chapter 5)<p><p><p><p><p> / Doctorat en sciences de gestion / info:eu-repo/semantics/nonPublished

The aim of this research is to show the effects of financial liberalisation on emerging market economies, how these economies removed restrictions on financial institutions so that they can be globally integrated, and to show the flow of international finance in and out of a country. This research also illustrates how the financial system in these economies moved from being government-led to being market-led. The main finding of this research is that many countries failed to reap the benefits of liberalisation because of weaknesses in the regulatory structure, undercapitalised banks, volatile markets and contagion effects. The research concludes that the long-term gains of liberalisation certainly supersede short-term instability of liberalisation. Thus, for financial liberalisation to have predominantly positive effects, attention should be drawn to the importance of a more prudent regulatory and supervisory environment. Furthermore, financial liberalisation must be accompanied by a sound institutional infrastructure, proper conduct of monetary and fiscal policies, a reduction in corruption, and an increase in transparency. In addition, liberalisation should be a gradual process whereby the right measures are taken in the right sequence. / Economics / M. Com. (Economics)