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The Late 1990's Financial Crisis in Ecuador :, Institutional Weaknesses, Fiscal Rigidities, and Financial Dollarization At Work, Luis Jácome

Abstract
This paper stresses three factors that amplified the 1990s financial crisis in Ecuador, namely institutional weaknesses, rigidities in public finances, and high financial dollarization. Institutional factors restricted the government's ability to respond in a timely manner and efficiently enough to prevent the escalation of the banking crisis and spurred the adoption of suboptimal policy decisions. Public finance rigidities limited the government's capacity to correct existing imbalances and the deteriorating fiscal stance associated with the costs of the financial crisis. Financial dollarization increasingly reduced the effectiveness of financial safety nets, fostered foreign currency demand, and accelerated a currency crisis, thereby further worsening the solvency of banks. These three factors reinforced each other, exacerbating costs as the economy went through a triple banking, currency, and fiscal crisis
Table Of Contents
""Contents""; ""I. INTRODUCTION""; ""II. ROOTS OF THE BANKING CRISIS""; ""III. A STYLIZED VIEW OF THE FINANCIAL CRISIS""; ""IV. EXACERBATING EFFECTS OF INSTITUTIONAL WEAKNESSES, FISCAL RIGIDITIES, AND FINANCIAL DOLLARIZATION""; ""V. CONCLUDING REMARKS""; ""INSTITUTIONAL WEAKNESSES AND THE FINANCIAL SECTOR""; ""REFERENCES""
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (47 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781281070173

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