THE FINANCIAL

CRISIS OF 2008
PRESENT TO
Sir Abdul Aabbar
PRESENT BY
Aman ullah
BACKGROUND OF GLOBAL FINANCIAL
CRISIS
IMPACT OF THE CRISIS ON PAKISTAN

• Financial sector reforms in the pre-crisis period had strengthened the Financial soundness Indicators
of the banking system.
• Private sector ownership and management brought about efficiency but a strong regulatory regime
did reform its watchdog function in continuing exercise risk taking.
• Plain Vanilla Derivatives were introduced gradually on a case-by-case basis.
• Cautious liberalization particularly on capital account convertibility insulated the banking system from
contagion shock.
• Non-banking system was a minor player in the game and could not cause any ripples.
IMPACT OF THE CRISIS ON PAKISTAN

• Banking sector had little lending exposure in troubled countries

• Trading book almost non-existent
• Exposure to securitized products was limited
• However, an indirect (and in some cases the direct) impact is felt
• There is a lag effect
• Liquidity dried up (or cost of funding increased)
• Concentration in portfolios
• Name lending portfolio quality is uncertain
• FDI flows are not certain - Linked to economic growth