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- W2116565369 abstract "This article examines the relationship between currency boards and the development of local Chinese deposit banking in pre-World War II Malaya and the Philippines. While in both countries Chinese banks filled an important gap in financial intermediation, the currency board system — an especially strict version of the classical gold standard — virtually ensured that these institutions remained small. Moreover, in the 1930s slump the currency board system's preclusion of a central bank and requirement to pay depositors in 100 per cent metropolitan currency, together with the volatility of highly staple-dependent export economies, pushed Chinese banks to the verge of bankruptcy or beyond. Examination of the 1930s crisis in Southeast Asia and role of banks in it reveals more differences from than parallels with 1990s experience. Jel codes: E59, N25 INTRODUCION 1 Boards and banks are not necessarily incompatible. Indeed, it might be argued that a colonial or classic currency board system such as pre-World War II Southeast Asia's does much of what is needed to promote banking development, by ensuring international currency convertibility and by virtually eliminating exchange rate risk in currency dealings. Such an argument presupposes important conditions, however. As well as the usual caveats attaching to currency board operation of fiscal prudence and highly flexible wages, at least three further conditions should obtain. One is that banks have good access to an external wholesale credit market. Second, it requires that foreign exchange transactions involve the mother country or other countries to whic h the colony is also linked in an unvaried relationship through the gold-exchange standard. Third, effective bank regulation must exist. The present article argues that none of these last three conditions fully obtained for local Chinese banks that developed in Malaya and the Philippines from the early twentieth century" @default.
- W2116565369 created "2016-06-24" @default.
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- W2116565369 date "2003-03-01" @default.
- W2116565369 modified "2023-09-27" @default.
- W2116565369 title "Currency Boards and Chinese Banking Development in pre-World War II Southeast Asia: Malaya and the Philippines" @default.
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