Reconstructing and Reforming the Financial System in Conflict and 'Post-Conflict' Economies
Journal of Development Studies 41(4):703-718. (2005) DOI: 10.1080/00220380500092861
Posted: 28 Oct 2014
Date Written: February 2005
Abstract
Reconstructing the financial system in countries affected by violent conflict is crucial to successful and broad-based recovery. Particularly important tasks include: currency reform, rebuilding (or creating) central banks, revitalising the banking sector, and strengthening prudential supervision and regulation. Encouragement of private capital into the banking sector must be balanced by protection of the public interest, a task made more difficult by the nature of war-to-peace transition. Bank crises can destabilise economies in recovery from war, and their fiscal burden takes resources away from development and poverty spending - thereby threatening 'post-conflict' reconstruction itself.
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