C J P Siriwardana: Financial sector consolidation - why and how?
The Central Bank of Sri Lanka's 64th Anniversary Oration delivered by Mr C J P Siriwardana,
Assistant Governor of the Central Bank of Sri Lanka, Colombo, 24 September 2014.
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The Chief Guest, Honourable Senior Minister of International Monetary Cooperation and
Deputy Minister of Finance, Dr. Sarath Amunugama;
The Guest of Honour, Secretary to the Ministry of Finance and Planning,
Dr. P B Jayasundera;
Governor of the Central Bank of Sri Lanka, Mr. Ajith Nivard Cabraal; Members of the
Monetary Board;
Former Governors; Deputy Governors; Former Deputy Governors;
Members of the Consultative Committees of the Central Bank; Distinguished Guests;
Ladies and Gentlemen,
First of all, let me thank the Governor and the Organising Committee of the Central Bank
Anniversary Oration for inviting me to deliver the oration on the 64th Anniversary of the
Central Bank of Sri Lanka. I believe it is my great privilege to have this opportunity to speak
to you today. As the Head of the Financial Sector Consolidation Unit of the Central Bank, I
must thank the Governor and the Organising Committee for selecting "Financial Sector
Consolidation: Why and How?" as the topic for today because it gives due recognition not
only to the current key policy reform in the financial sector that is being implemented in 2014,
but also to all stakeholders who are committed to working with the Central Bank to make this
major reform a success.
Ladies and gentlemen, the major components of our financial sector are banks and non-bank
financial institutions (NBFIs), which together account for 65 per cent of the financial sector of
the country. The financial sector consolidation programme is designed for the reforming of
the institutions belonging to these two sectors. As the topic suggests, I will share with you
why we wanted to consolidate the banking and NBFI sectors and how we are implementing
the consolidation process. Accordingly, my oration is divided into two parts; in the first part, I
will discuss the rationale for consolidation and in the second part explain the way we planned
and executed the process.
With that introduction, let me now begin my oration.
Part I: Financial sector consolidation: why?
The financial sector of Sri Lanka has shown a high level of overall stability in the past, even
during the post subprime global financial crisis period. This has been endorsed by the
international and local rating agencies in their annual independent reviews. Since there has
not been any significant crisis situation in our financial system except for some non-systemic
failures of a few mismanaged financial institutions in the recent past, the question raised by
many local and international agencies was why the Central Bank came up with this financial
sector consolidation programme for a well-functioning stable financial system. The past
global experiences show that all the consolidation programmes implemented to stabilise the
respective economies' financial systems were introduced as a national policy to relove a
crisis situation. Therefore, we have a duty to explain very clearly the factors that prompted
the Central Bank to introduce the financial sector consolidation programme. Given the time
constraint, I will present the main arguments for consolidation in six points.
Reason 1: Rapid transformation of the domestic economy and the need for a strong
and stable financial system to steer future economic growth
We all know the conflict period of nearly 30 years was extremely challenging for our
economy and the country. Nevertheless, with the country gaining peace and returning to
normalcy from May 2009, we have been able to overcome many challenges and reach
greater heights in economic performance. Social indicators and global rankings of our
country have improved notably while regional disparities have reduced and the standard of
living of the people has improved. Further, in the midst of the global economic downturn and
the slower than expected recovery, we have been successful in delivering an oasis of
tranquillity and stability.
The credit for this clear paradigm shift, elevating our economy into new heights, goes to our
development strategy articulated under the "Mahinda Chintana: Vision for the Future",
which was first introduced in 2005 and then redesigned in 2010, aligning strategies to
overcome the challenges in the post-conflict economy. Our dream of transforming Sri Lanka
into the "Wonder of Asia" is an important topic that is being broadly discussed among the
academia, international agencies and many Heads of Governments. Ladies and gentlemen, I
hope most of you can remember our 60th Anniversary Oration Series held in 2010. There,
one of the eminent speakers was Dr. Ngozi Okongo-Iweala, then Managing Director of the
World Bank and former Finance Minister of Nigeria. She spoke on the topic "Becoming the
Wonder of Asia: Accelerating the Inclusive Growth in Sri Lanka". She had carefully
studied the development plan of the Government, the "Mahinda Chintana: Vision for the
Future" released in 2010, prepared just one year after the ending of the civil conflict. She
was highly impressed about our development plan and explained the actions needed to
make our vision a reality. She said, I quote, "It's bold and ambitious. It's good to be
ambitious. It is the right time for Sri Lanka to think big". She further said, "The vision is
very clear and reminds us of a Japanese proverb 'A vision without action is a day
dream; action without a vision is a nightmare'". The idea behind this statement was that
we should have an appropriate action plan to reach our vision, the target. In fact we did have
a plan! Over the last 5 years, we have proved that our post-conflict policies and the
strategies implemented under the "Mahinda Chintana" have produced desired results,
enabling us to reach our expected targets. This was even endorsed by the Asian
Development Bank Chief, Takehiko Nakao during his visit to Sri Lanka in June 2014. He
said, I quote, "Sri Lanka is on the path to becoming another Asian Economic Success
Story". Last year, we invited the well-known emerging market portfolio manager and eminent
writer, Ruchir Sharma for the Central Bank's 63rd Anniversary Oration. He also highlighted
the possibility of our economy becoming another "Breakout Nation" as he has already
written in his book, "Breakout Nations: In search of the Next Economic Miracles" in 2012.
The encouragement provided to the global investors by the renowned investment banking
and equity markets specialist and investment Guru Fraser Dinnis to "Sell Singapore, Buy
Sri Lanka" further reiterates the steady and impressive performance of our economy which
has turned Sri Lanka around to a more attractive investment destination. Honourable Minister
and distinguished guests, all above statements made by world renowned personalities prove
that we are actively involved towards making our dream a reality.
Ladies and gentlemen, having raised our economy to greater heights in the post-conflict
period, today, we are on the threshold of a new era for our country. Our economy is
undergoing fundamental structural changes, which are expected to provide us with a robust
new platform on which the nation can build up a sustainable economy to continue its drive
forward. In line with the medium-term policy framework of the Government, per capita GDP is
targeted to surpass USD 4,000 by 2016, entering the economy into an upper middle income
category country. Further, our medium-term economic strategy projects surpassing USD
7,000 per capita level by 2020. The Governor of the Central Bank and the Secretary to the
Treasury highlighted the potential of our economy to achieve this target at the "Sri Lanka
Economic Summit" held in August 2014. We know that this would require greater efforts in
all fronts - the Government, the Central Bank and the private sector - that would support the
economy in the transition to drive through the middle income path towards the higher end of
the upper middle income category. This new economic model should be able to overcome
the rising "economic gravity", which would otherwise pull the economy into the "Middle
Income Trap".
With the renewed acceleration in economic growth, we need to focus our attention on the
next phase of economic development beyond 2016 and transforming the economy to
achieve a sustained, inclusive and balanced growth. Sri Lanka's drive beyond 2016 will
largely depend on the strength and the dynamism of the financial sector. As we strive to
reach these new milestones, our current macroeconomic indicators are bound to undergo a
massive transformation. As a part of this transformation, the greater challenge would be to
make Sri Lanka a popular, emerging financial centre in the region, where setting up a
financial hub in Sri Lanka would be a key task. To strengthen and expand the dynamism, the
financial sector will have to possess technology-leveraged financial services to improve
operational efficiency while diversifying funding sources by tapping the international capital
markets to mitigate risks and improve cost efficiency. Further, expanding delivery channels
and business networks beyond domestic territories, enabling them to grow and exploit
opportunities while addressing external vulnerabilities and spillovers are also essential.
Meanwhile, a stronger capital base, a high quality pool of human capital and a high level of
corporate governance to meet the enhanced regulatory framework are required in the
financial system to steer the country towards attaining a sustained growth. To facilitate
accomplishing this task, it was identified that the financial sector of the country has to be
strengthened and stabilised further by implementing an appropriate set of policies in a timely
manner.
Reason 2: Necessity of maintaining stability in the local financial system amidst the
growing complexity in the global financial system
Ladies and gentlemen, we all accept that a stable financial system is a crucial element for a
conducive business environment supportive of sustained economic growth. However, in the
present day, Central Bankers and other policymakers around the world are confronted with a
number of challenges in maintaining financial system stability due to the high contagion
effect resulting from the increased complexity and connectivity in this hyper-connected world.
Although globalisation can allocate savings and investments more efficiently worldwide than
in the past and the net benefit of financial globalisation for developing countries can be large,
the financial crises the world encountered over the last 80 years, ranging from Wall Street
Crisis during 1929-33 to Subprime Crisis in 2008-09, have shown us how large, costly and
disastrous the spillover effects could be and how they have made the financial system
deteriorate while spreading fast to other economies. Recently, US Fed Chairperson Janet
Yellen said, I quote, "No economy is immune from financial instability and the adverse
effects on employment, economic activity, and price stability that financial crises
cause". However, since there is no universally governed law or standard for defining or
measuring financial system stability, we have to understand our own circumstances and find
tailor made solutions that are appropriate for us to sustain the stability in the financial system.
The main benefit of financial globalisation for developing countries is the improvement of
their financial system through positive spillover effects from more complete and stable,
deeper and better-regulated financial markets. A smooth functioning deep financial system
with capital buffers and an effective level of credit expansion and risk mitigation capacities
are crucial for developing nations as they foster economic growth. If the right infrastructure is
not in place or not properly designed, the integration, interconnectedness and complexity in
the global financial system may hamper the health of the local financial system as economies
become exposed to external shocks and crises, not only generated in the countries that
directly relate to them, but also through contagion effects. Therefore, the main challenge for
countries like us is managing financial globalisation in such a way that we take full advantage
of the opportunities it generates while minimising its adverse impact on the domestic financial
sector by properly putting in place the right infrastructure.
Reason 3: Avoidance of any possible financial distress
Ladies and gentlemen, our financial system has also experienced a few non-systemic
financial distresses in the past mainly due to the companies' own mismanagement practices
including poor credit management, non-viable investments made in their group of
companies, unsatisfactory accounting systems and revenue recognition practices,
inadequate internal controls, and high volume of related party transactions. However, some
financial institutions have failed due to reasons such as their inability to adapt to the rapidly
changing economic conditions. Small financial institutions not complying with corporate
governance principles, capital and liquidity requirements were also a reason for some past
crises, which have resulted in exerting pressure on the stability of the financial system of the
country.
During 1988-90, 13 Licensed Finance Companies reported serious distress, of which
2 companies were revived by infusing new capital while 11 companies were liquidated. You
may remember that there was a small Licensed Specialised Bank called Pramuka Bank,
which failed in 2002. It was only in 2007 that the deposits of the Pramuka Bank were
transferred to a new Savings Bank. In 2009, 8 financial institutions faced liquidity problems,
mainly due to the collapse of the parent company of a particular group. Most of those
financial institutions are still undergoing restructuring, as agreed with the Central Bank. In
2013, another small NBFI, namely, CIFL faced liquidity problems mainly due to
mismanagement and non-commitment to corporate governance. The Central Bank is now in
the process of restructuring this company under the consolidation programme. The important
message that I want to share with you is that although the NBFI that failed in 2013 accounted
for only 0.35 per cent of the assets of our financial sector, the publicity it created resulted in a
huge uproar in the financial market and the economy.
You can clearly see that transmission of information has become speedier in the recent
years and such information is easily and widely accessible now compared to the past. The
Managing Director of the IMF, Christine Lagarde also highlighted this fact when she recently
spoke on "New Multilateralism for 21st Century", from which I quote "We are living
through a communications revolution, because information travels at lightning speed
from limitless points of origin. Since linkages are deep and dense, even the tiniest
tensions can be amplified, echoing and reverberating across the world - often in an
instant, often with unpredictable twists and turns. Because of this, the global economy
can become even more prone to instability". Therefore, given the complexity and
interconnectedness in the current economic activity and the high level of involvement of
media in the present day, we must take all steps to avoid the eruption of even a small shock
in the financial system as it can create a bigger impact on the economy and on social and
political fronts, thereby deteriorating market confidence and increasing overall uncertainty.
We believe the consolidation process would avoid, if not, at least minimise such impact.
Reason 4: Addressing the fragmentation issue in the financial sector
Currently our banking and non-banking sectors are highly fragmented and operate in a
skewed manner reflecting the dominance of a few large banks and NBFIs. Continuation of
this situation is risky because the small financial institutions are generally more exposed to
internal and external shocks and tend to threaten the stability of the entire financial system of
the country.
Our banking sector constitutes 34 banks, of which 22 are domestic banks and 12 are foreign
banks. The assets of the banking sector amount to approximately Rs. 6.3 trillion with only
5 banks, each maintaining an asset base of over Rs. 500 billion, accounting for a share of
66 per cent. Meanwhile 6 medium size banks, including 2 foreign banks, hold assets
between Rs. 100 and 500 billion, accounting for a share of 23 per cent. The balance
23 banks individually hold assets less than Rs. 100 billion and account for only 11 per cent.
The non-banking sector is highly fragmented and constitutes 58 NBFIs, of which 48 are
Licensed Finance Companies while the balance 10 are Specialised Leasing Companies. The
total assets of the NBFI sector amount to Rs. 750 billion. Similar to the structure of the
banking sector, 13 large NBFIs, each holding assets over Rs. 20 billion, account for 74 per
cent of the NBFIs market share. Meanwhile 13 per cent of the market share is accounted for
by 8 NBFIs holding assets between Rs. 8 and 20 billion. The remaining 37 small companies,
each holding assets less than Rs. 8 billion, account for only 13 per cent of the NBFI sector.
Since the fragmented financial system is highly vulnerable to external shocks, consolidation
would help to build a strong and stable financial system.
Reason 5: Repositioning the financial sector for delivering a cost-effective service
Ladies and gentlemen, as Sri Lanka is moving towards a higher growth trajectory, we will
need a more focused financial sector with a higher contribution, particularly from the banking
and non-banking sectors. Intermediation by the financial sector in a more productive manner
is crucial for achieving a balanced and inclusive growth in the country. Recently, there was
an interesting article in The Economist Magazine of 12 April 2014, captioned "The Slumps
that Shaped Modern Finance". This article begins by raising the question "What is
mankind's greatest invention?" It says, "... it is nothing but 'Financial Contracts',
merely because it has performed an indispensable role in human development, at
least in the last 7,500 years, playing three important roles, the 'Economic Time
Machine', the 'Safety Net' and the 'Engine of Growth'". In order to provide an efficient
service, the financial institutions need to consider the strategic repositioning of their
organisations and expand businesses in a cost effective manner while improving the service
delivery to deepen the public trust and confidence.
Currently, most financial institutions are dependent on short term funding, which increases
the rollover risks, and this has to be addressed with priority by gradually shifting to long term
funding, which provides greater stability to the entire industry. Further, when financial
institutions become larger and more stable, obtaining international ratings and raising
lowcost funds from international capital markets would be easy. Other challenges faced by the
sector are lack of new technology in most financial institutions to be competitive in the
industry while lack of staff training has resulted in efficiency and hence productivity has been
stagnant. Therefore, it is essential to reposition the financial sector to improve productivity
and deliver a cost-efficient service.
Reason 6: Improving compliance and governance in the financial sector
As the regulator, the Central Bank also faces several challenges in regulating our highly
fragmented financial sector today. Despite the continuous improvements we made to the
regulatory framework in line with international best practices, non-compliance with Directions,
rules and regulations, poor understanding of the regulatory framework, lack of prudent
internal controls, absence of prudent risk management and dynamic strategic planning, and
submitting unreliable information by some financial institutions have raised doubts in our
minds about the corporate governance practices adopted by some companies. We believe
consolidation programme will result in financial institutions being more transparent and be
well-compliant with regulatory framework in the future.
Ladies and gentlemen, in order to address the concerns including the reasons I mentioned
above, it was decided collectively by the Ministry of Finance and the Central Bank to
strengthen the financial sector through consolidation. This is expected to be achieved by
merging the financial institutions to create a sector with strong and dynamic institutions
practicing good governance and catering to all sectors of the economy while being resilient to
domestic and external shocks. Therefore, financial institutions need to put in place adequate
capital and other buffers to prepare the Sri Lankan financial sector to further withstand
business cycles without sacrificing investment potential in the future.
The move by Sri Lanka for financial sector consolidation at this juncture has been set out
after careful consideration and assessment of the costs and benefits that would accrue to the
country to achieve its national goal of accomplishing medium-term growth targets. As far as it
has been established through research, a national policy on financial sector consolidation in
other countries has been formulated and implemented only in response to a more damaging
and widespread crisis in the past. However, the initiative by Sri Lanka to consolidate the
financial sector is a unique paradigm, marking a record in global economic history, as this
proposal is a prudent and forward looking regulatory move to prevent and minimise the costs
of future crises. Recently, the Governor of the Reserve Bank of India, Dr. Raguram Rajan
was in Colombo to attend the SAARC Governors' Conference and the Central Bank
arranged a special evening presentation for him to deliver a lecture on the banking industry.
There he reminded us, I quote, "Regulators need to take right actions at the right time".
We believe the consolidation programme is the "Right Action" taken by the Central Bank at
the "Right Time" to reform the Financial Sector in order to facilitate the rapid transformation
of our economy.
Distinguished guests, the Government and the Central Bank believe the financial sector
consolidation will result in cost efficiencies, productivity gains and improvements in corporate
governance in the financial sector while enhancing the sector's contribution to uplift
nationwide economic activity to facilitate the inclusive growth required for raising the
country's per capita income to over USD 7,000 by 2020.
Part II: Financial sector consolidation: how?
Ladies and gentlemen, let me now move onto the second part of the oration. Before
explaining how we designed and executed the consolidation process, I thought I should
share with the distinguished audience, the basis and the background to this process, which
was designed to re-organise the structure in the financial system within the existing legal
framework, while taking into consideration some global experiences. In this regard, I will talk
on four areas: the role of the Central Bank; evolution of our financial system; global
experience in consolidation; and the transition of the burden of financial crises from
shareholder to tax payer.
Basis 1: Central Bank's role in financial sector consolidation
I would like to begin by explaining the role of the Central Bank in this process. As you all
know, securing financial system stability is one of the core objectives of the Central Bank. In
terms of Section 5 of the Monetary Law Act, the Central Bank is empowered to ensure
financial system stability in the country. The importance of maintaining a sound banking
system was also emphasised in the "Report on the Establishment of a Central Bank for
Ceylon" by the Central Bank's founding Governor, John Exter. There he said, I quote,
"Banking is an economic activity which affects the public welfare to an unusual
degree, it touches in one way or the other almost every phase of the country's
economic life. Sound banking is essential to a healthy and vigorous economic
development". Accordingly, the Monetary Law Act together with the subsequent enactments
of the Banking Act and the Finance Business Act have empowered the Monetary Board to
issue Regulations and Directions to the banking and NBFI sectors with a view to ensuring
financial sector soundness, protecting the financial institutions from any mismanagement and
failures, and maintaining public confidence. Hence, I believe you can understand that the
Central Bank has a pivotal role to play in steering this consolidation process in line with its
key objectives and responsibilities as the policymaker and the regulator of the financial
system of the country.
In this regard, the Central Bank's role in the financial sector consolidation process will be that
of a pragmatic systemic risk mitigator, and a guide that encourages innovation in order to
ensure the overall goal of financial system stability. The Central Bank's policies are forward
looking and designed to balance global policies and adjust to sudden volatilities, and to
preempt, as much as possible, any possible financial distress or any possible failures in the
financial sector in the future. Within this scope, the regulatory framework will be further
improved to promote competition, develop sound and effective institutions, enhance
operational aspects including IT and payment infrastructure, and foster a culture of
innovation in the financial sector, thereby strengthening and maintaining financial system
stability.
Basis 2: Evolution of the financial system of Sri Lanka
Ladies and gentlemen, now I would like to briefly take you through the evolution of our
financial system. Banks in Sri Lanka have been in operation for over 160 years while the
NBFI sector has been a part of the economy for the last 80 years. Before the economic
liberalisation in 1977, NBFIs carried out hire purchase and leasing business using their own
funds or personally borrowed funds. Since the owners of such companies prudently
managed their businesses and were cautious in lending, NBFI failures during pre-1977 era
were extremely limited. The new economic policies in the post-liberalisation period gave rise
to higher demand for credit from the private sector, which led the NBFIs to raise public
deposits. However, lack of controls and regulations during that period limited the ability of the
Authorities to move directly into the affairs of NBFIs.
With the commencement of operations of the Central Bank of Sri Lanka in 1950, the Bank
Supervision Department was set up, and has since been entrusted with the responsibility of
supervision and examination of banking institutions. The scope of functions of the Bank
Supervision Department was extended with the enactment of the Control of Finance
Companies Act, No.27 of 1979, to include the supervision of NBFIs. The Bank Supervision
Department was entrusted with the responsibility of providing the public with the required
confidence in the financial system and protecting the interests of depositors. In order to
achieve this objective, the Department was charged with the duty of continuous supervision
and periodic examination of all banks and NBFIs in Sri Lanka.
During the period 1986-1988, several finance companies showed some distress due to
mismanagement of funds. This required the Central Bank to bring in swift reforms to maintain
overall stability and efficiency of the companies in the non-bank financial sector of Sri Lanka.
Accordingly, the Finance Companies Act, No. 78 of 1988 was enacted and the Department
of Supervision of Non-Bank Financial Institutions was established at the Central Bank in late
1988. However, with the continuous and rapid development in the NBFI sector, the
regulations effected by the 1988 Act became futile, despite the amendments made in 1991.
Ambiguities in the supervisory powers in respect of the Licensed Finance Companies and
inadequate regulatory framework to deter unauthorised deposit taking persons and
institutions that existed in the Act compelled the Authorities to introduce a more effective
legislation. Accordingly, Finance Business Act, No. 42 of 2011 was enacted addressing all
prevalent concerns and lacunas of the Finance Companies Act.
With regard to the banking sector, the Banking Act was also amended from time to time,
inter-alia, to introduce more prudential standards such as the amendments made in 1990,
1995, 2005 and 2006. These banking laws and regulations are regularly updated in line with
the best practices in the industry, both locally and internationally, covering requirements,
principles and guidelines issued by the "Basel Committee for Banking Supervision" of the
Bank for International Settlements (BIS).
Basis 3: International experience on financial sector consolidation
Ladies and gentlemen, I would like to share with you the global experiences of financial
sector consolidation. In formulating a consolidation model for Sri Lanka, we studied several
consolidation models of other countries, as they were useful for us to fashion our programme
in an effective manner. In Asia, following the Asian financial crisis, many countries
consolidated their financial institutions successfully. However, in the Western countries,
mergers and acquisitions in the financial sector were largely one-off, market driven
arrangements, and no consolidation was recorded as a pre-emptive national policy even
after the series of crises reported in their financial sectors. Let me highlight a few success
stories of financial sector consolidation that have taken place in the Asian region.
Malaysia: Following the Asian financial crisis in 1997, Malaysia realised the necessity of
having a strong and resilient financial system and accordingly initiated a merger programme
to consolidate the financial sector. Within one year of the merger programme, the non-bank
sector was strengthened and the number of NBFIs was reduced from 39 to 8. By 2000,
50 out of 54 banking institutions were consolidated into 10 banking groups and as of today,
all finance companies have been merged with commercial banks. Successful reforms of the
financial sector have further reinforced the strong fundamentals supporting a sound financial
sector in Malaysia. It was observed that overall confidence and stability in the Malaysian
financial sector was preserved during the recent global financial crisis underpinned by a
strong and well regulated financial sector.
Singapore: Singapore consolidated its banks, leading to bigger and stronger banks whose
interests were aligned to the long term interests of the economy. In early 2000, Singapore
launched its bank consolidation process, together with the liberalisation of the banking
industry. A major move in the local banking sector was the consolidation of the 6 local
banking groups into the present 3 main local banking groups, thereby strengthening banks'
capabilities, building efficient management teams and enhancing operational effectiveness.
This move strengthened the economic viability of all banks, and provided Singapore with
better services and a competitive edge not only in the region but also in the global context.
Thailand: In Thailand too, financial sector consolidation was initiated after the Asian financial
crisis with the objective of improving the efficiency and transparency while reducing the
number of smaller financial institutions. A restructuring package was introduced to
consolidate the commercial banks and finance companies that were unable to recover by
themselves. Further, competition and cost cutting have also been reasons that promoted
consolidation. As the final outcome, the number of participants in Thailand's banking sector
is projected to shrink.
Similar financial sector consolidation has been observed in several other Asian countries
such as South Korea, Indonesia and the Philippines after the Asian financial crisis. This
initiative has helped them to protect themselves from the recent global financial crisis that
affected most of the Western world.
Basis 4: Transition of the burden of financial crises from shareholder to tax payer
Ladies and gentlemen, the history of global financial crises taught us that nature of crises
have been changing and along with that the burden of such crises have shifted from
shareholders to tax payers. The history of systemic financial sector crises dates back to the
18th century, to the banking sector crisis named as the South Sea Crisis in UK in 1720s.
After the inception of