ABSTRACT
This chapter investigates the performance of the formal financial sector in our sample countries. The first section uses aggregate measures to assess the overall performance of formal financial institutions under different policy regimes. Section 4.2 discusses banking portfolios, highlighting those features that have persisted despite changes in the policy environment. This persistence provides some critical explanations for the constraints banks face in responding to reform measures. Section 4.3 summarizes findings from an economy-wide analysis of the flow of funds (see Appendix 4.1 for details). Changes in intersectoral financial flows over the period 1987 to 1992 should highlight the differences, if any, brought about by liberalization attempts.
