The Retreat of Deposit Dollarization
AbstractAfter growing rapidly during the 1990s, the scale of deposit dollarization has slowed or even reversed since 2001. This paper employs an expanded cross-country data set on the share of bank deposits denominated in foreign currency. It documents the break in trend and seeks to explain this apparent reversal in this aspect of global financial integration. Valuation changes related to dollar weakness from 2002 do not seem to be the cause. But lower inflation in many countries has reduced the attractions of foreign currency as a hedge. Also, the Argentine crisis of 2001-02 may have heightened investor awareness of the risk of forced conversion of foreign currency deposits. A return to higher inflation and fading memories of forced conversions could lead to a resumption in the growth of deposit dollarization, with the banking risks that this can entail. Copyright 2008 The Author. Journal compilation 2008 Blackwell Publishing Ltd
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Wiley Blackwell in its journal International Finance.
Volume (Year): 11 (2008)
Issue (Month): 3 (December)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1367-0271
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Winkler, Adalbert, 2010.
"The Financial Crisis: A Wake-Up Call for Strengthening Regional Monitoring of Financial Markets and Regional Coordination of Financial Sector Policies?,"
ADBI Working Papers
199, Asian Development Bank Institute.
- Adalbert Winkler, 2010. "The Financial Crisis : A Wake-Up Call for Strengthening Regional Monitoring of Financial Markets and Regional Coordination of Financial Sector Policies?," Finance Working Papers 22022, East Asian Bureau of Economic Research.
- Adalbert Winkler, 2010. "The Financial Crisis: A Wake-Up Call for Strengthening Regional Monitoring of Financial Markets and Regional Coordination of Financial Sector Policies?," Working Papers id:3021, eSocialSciences.
- Vieira, Fabrício A.C. & Holland, Márcio & Resende, Marco F., 2012. "Financial dollarization and systemic risks: New empirical evidence," Journal of International Money and Finance, Elsevier, vol. 31(6), pages 1695-1714.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.