Philippine E-Journals

The Role of Wholesale Banking in the Development of Domestic Industries

Carlos V. De Castro Jr. | Maria Lourdes V. De Castro | Joanna Patricia P. Sangalang | Clarissa V. Villar

Discipline: Economics, Business

 

Abstract:

The problem of long-term funds today is still as prevalent as it was during the mid-seventies. A study conducted by the World Bank in 1988 regarded the provisions of long-term credit as one of the major gaps in the domestic financial markets. This scenario is not surprising considering all that our financial system has gone through. The advent of the eighties witnessed the severe backlash brought about by the Dewey Dee caper which crippled a good number of commercial banks and quasi-banking institutions. It also resulted in an erosion of public confidence and exposed the weakness of the commercial paper market. Investors then opted for conservatism by transferring their funds to deposits which was perceived to be safer and more stable (WB 1988).