| dc.description.abstract | The major negative implications of global crisis on the financial systems and real
economies of the countries of the world have brought into focus of the decision
makers and researchers the problem of evaluating and monitoring the financial stability
of the banking sector.
One line of research has focused on the relationship between financial liberalization and
the stability of banking sector. This study contributed to the line of research by
examining the effects financial liberalization on the stability of banks in Kenya. The
study design was a descriptive survey which targeted all commercial banks in the Kenya
banking sector. Secondary data was used in this study. Descriptive (mean and standard
deviation) and inferential statistics (paired samples t-test) were used to analyze data.
The study established that financial liberalization influenced the stability of banks in
Kenya. Financial liberalization affected the rate of inflation, exchange rate volatility,
Treasury bill rate and GDP growth rate. The highest rates of inflation and highest
fluctuations in the rates of inflation were recorded during the period of financial
liberalization. The study recommends that the central bank of Kenya should come up
with a policy package that combines financial liberalization with structural reforms to
raise productivity, improve stability of financial institutions and fast-track path to
development. Structural reforms that improve macro and microeconomic stability in
Kenya can make financial liberalization successful. | en_US |
