Reconstructing and reforming the financial system in conflict and ‘post-conflict’ economies
Philippe Le Billon (Liu Faculty, UBC), A. Geda, Addison, T., S.M. Murshed
May 1, 2005
Addison, T., A. Geda, P. Le Billon and S.M. Murshed (2005) “Reconstructing and reforming the financial system in conflict and ‘post-conflict’ economies” Journal of Development Studies 41(4): 704-720.
Abstract
Reconstructing the financial system in countries affected by violent conflict is crucial to successful and broad-based recovery. Particularly important tasks include: currency reform, rebuilding (or creating) central banks, revitalising the banking sector, and strengthening prudential supervision and regulation. Encouragement of private capital into the banking sector must be balanced by protection of the public interest, a task made more difficult by the nature of war-to-peace transition. Bank crises can destabilise economies in recovery from war, and their fiscal burden takes resources away from development and poverty spending – thereby threatening ‘post-conflict’ reconstruction itself.
