Financial Intermediation in Small Island Developing Economies

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Efficiency of Resource Allocation by Financial Intermediaries

Financial intermediaries can be evaluated not only in terms of their efficiency in mobilising resources but also on the basis of their efficiency in allocating resources. The majority of governments in the sample countries evidently believe that the financial intermediaries cannot and/or do not allocate resources efficiently. In the majority of the sample countries - the exceptions include Bahamas, Hong Kong, Maldives and Singapore - governments intervene by means of selective credit policies aimed at influencing deliberately the allocation of resources by the financial intermediaries.


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