Pakistan Financial System - The Post-Reform Era Maintaining Stability and Growth

Abstract

The financial system of Pakistan has undergone a sea-change owing to reforms which were implemented over a period of a decade and a half, 1992-2006. The financial system has moved towards promoting the efficiency of financial intermediation while maintaining stability and fostering growth of the economy. Financial repression of the previous decades has receded though it has not been eliminated. Now a shift is warranted for the reform and restructuring of sectoral or sub-sectoral finance which has to be activity based, not institution based. Pakistan’s financial system has entered the post-reform era with all its potentials, complexities and challenges. How well the financial system performs in this era depends on how sustainable the financial regime is and how resilient it is in coping with change and financial shocks, both domestic and global.