Another feather in his cap was his appointment as the first Governor of the State Bank of Pakistan, which was formally declared open by Quaid-e-Azam Muhammad Ali Jinnah on 1st July, 1948. As the skipper of the country’s Central Bank, which was described by Quaid-e-Azam as the symbol of the country’s financial sovereignty, Mr. Zahid Husain aptly displayed his potential as an economic administrator.
However, some years ago there has been some evidence that the slump in equity prices led some insurance companies to liquidate part of their equity portfolios in order to reduce regulatory capital need. Such forced sales would have contributed to adverse market dynamics by driving down equity prices even further, thereby also affecting banks’ equity portfolios.