The Global Financial Crisis of 200

Financial crisis

But economic growth has taken a hit, with growth slowing down The global financial crisis of 2008 was the worst since 1930s and it drastically impacted the landscapes of the global financial setups all around the globe. Impact of Global Financial Crisis onBanks’ Financial Performance in Pakistan 102Financial institutions, particularly commercial banks, were inevitably the major and direct victims of the crisis and it significantly impacted their financial patterns, market strategies, and The economy of Pakistan was also adversely affected by the crisis and so were financial institutions in Pakistan. The liquidity crunch and the plummeting indices around the globe had shaken the investors’ confidence who sought to channelize their investments to relatively stable economies. It exerted huge pressure on the already meager foreign exchange reserves and the Pakistan was able to avoid default on her foreign obligations only with the timely assistance by IMF in November 2008.However, the commercial banks in Pakistan withstood the worst impacts of the global financial crisis owing to their sound credit policies and banking reforms of the previous two decades. No bank or other financial institution in Pakistan collapsed but the crisis did exert noticeable impacts on the financial performance, patterns, and operational policies of the commercial banks in Pakistan. This study aims at analyzing various determinants of the banks’ financial performance in Pakistan and the suspected impacts of the global financial crisis on their relative ability to explain variations in the financial performance with intent to ascertain that which determinants of banks’ financial performance became relatively more or less important in the aftermaths of global financial crisis. from 7.3 percent during 2004-07 to 5.8 percent in 2008 and projected to slide to around 3 percent in 2009.