The Financial Sector and Economic Development: Banking on the Role of Human Capital

Abstract

Evidence suggests that human capital development contributes to the stability of banks. Unfortunately, developing countries, both pre- and post-liberalization, often suffer from an inadequate supply of capable professionals. This situation threatens the potentially positive relationship between financial liberalization and economic growth. It is therefore urgent that developing states develop policies aimed at addressing the supply and de mand-side requirements of the financial sector. Such policies must target the development of professionals with both ap propriate academic backgrounds in business and the requisite on-the-job skills. Public-private solutions are advocated as the most efficient and effective approach to the development of comprehensive policies in this regard.