Don't privatize banks too soon

Thursday, January 28, 2010 - 06:42 in Mathematics & Economics

The research, led by Professor Panicos Demetriades of the University of Leicester, suggests that privatising government owned banks without having an effective system of regulation in place can result in a collapse of depositors' confidence in banking. This can not only undermine the ability of the banking system to finance economic growth but it can also trigger bank runs and financial instability.

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