Are Financial Sector Policies Effective In Deepening The Malaysian Financial System?
Abstract"This paper provides an empirical assessment of the effects of financial sector policies on development of the financial system in Malaysia over the period 1959-2005. The technique of principal component analysis is used to construct a summary measure of interest rate policies in order to account for the joint influence of various interest rate controls imposed on the Malaysian financial system. The results show that economic development, interest rate controls, and capital liquidity requirements positively affect the level of financial development. However, greater trade openness, higher statutory reserve requirements, and the presence of directed credit programs appear to be harmful for development of the Malaysian financial system. The results provide some support to the argument that some form of financial restraints may help promote financial development. "("JEL "E44, E58, O16, O53) Copyright (c) 2008 Western Economic Association International.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Contemporary Economic Policy.
Volume (Year): 26 (2008)
Issue (Month): 4 (October)
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Other versions of this item:
- James B. Ang, 2007. "Are Financial Sector Policies Effective in Deeping the Malaysian Financial System," DEGIT Conference Papers c012_031, DEGIT, Dynamics, Economic Growth, and International Trade.
- James B. Ang, 2007. "Are Financial Sector Policies Effective In Deepening The Malaysian Financial System?," Development Research Unit Working Paper Series 02-07, Monash University, Department of Economics.
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
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