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Executive Summary... v I. Introduction... 1 II. Macroeconomic Background and the Financial Sector on the Eve of Financial Liberalization... 4 III. Instrumentality of Financial Reform... 18 IV. The Conseguences of Financial Liberalization... 23 Overview Macroeconomic Background The Consequences of Financial Liberalization Level and Structure of Interest Rates Growth of the Financial Sector Competitiveness, Profitability and Efficiency of Financial Institutions Availability of Long-term Credit Integration of Domestic Interest Rates with Foreign Interest Rates Quality of Banks' Portfolios The Corporate Sector's Financial Structure Intercountry Experiences: Divergence and Similarity Summing Up V. Financial Liberalization in Chile. Argentina and Uruguay: A Comparative PersDective... 72 1. Macroeconomic Environment and the Status of the Financial Sector 2. The Main Elements of the Financial Liberalization Programs 3. Impact of Financial Reforms 4. Adjustment Policy Implementation and Its Linkage with Financial Liberalization 5. Financial Liberalization Experience in Southern Cone and Asian Countries: A Comparative View iv Page No. VI. Lessons of Countries' Experiences from Financial Liberalization... 101 Bibliography.107 Statistical Appendix.