01753cas a2200241 a 4500 AALejournalIMF010119 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451979114 1018-5941 BD-DhAAL BD-DhAAL International Monetary Fund. Financial Crisis in Developing Countries and Structural Weaknesses of the Financial System. Washington, D.C. : International Monetary Fund, 1989. 1 online resource (46 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the generation of financial crises in developing economies and shows that the microeconomic structure of the financial sector is a crucial factor in creating the conditions for a crisis. Structural problems of the financial system in developing countries, including implicit insurance on bank liabilities, limitations of capital markets, and lack of appropriate regulations, are sources of financial fragility. The paper concludes that close supervision of bank loans is needed to eliminate these distortions, and the optimal intervention consists of imposing an adjustable bankruptcy penalty on banking activity or charging a fair insurance premium on bank liabilities. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1989/033 Full text available on IMF http://elibrary.imf.org/view/journals/001/1989/033/001.1989.issue-033-en.xml IMF e-Library