Are Poor Countries Better Off Without Banks?  By Robert E.
Anderson This article was published in FOX News Online, April
22, 2004.  Good banks can be a major force for economic growth.
They can transfer the public’s savings to those businesses that
need capital for productive investments. Unfortunately, many
banks in poor countries have turned out to be pyramid schemes in
which most of their loans are bad (non-performing) and the banks
are insolvent.  However, as long as deposits are growing, they
can use new deposits to pay the interest on the old and thus
remain liquid. Such banks can continue to operate sometimes for
decades until something causes new deposits to decline such as a
macro-economic shock. The result is a banking crisis.  According
to a World Bank inventory, about two-thirds of the 140 low or
medium-income countries have had a banking crisis since 1976.
Sixteen have had more than one, with Argentina holding the
record with four.  After each crisis, the government has usually
had to bail out th