Capital Account Convertibility and the Financial Sector
AbstractAs if it were still necessary, events unfolding in Asia for over a year reconfirm the critical importance of a sound, efficient financial sector for economic development and growth. Indeed, a growing number of studies underscore the risks that a vulnerable financial sector pose for macroeconomic stability. In this context, it is often argued that the liberalization of capital account heightens financial sector vulnerability. But openness to capital flows can also underpin and deepen the development of the financial sector, thus contributing to its robustness. The paper examines these issues, drawing a parallel between capital account liberalization and domestic financial deregulation, indicating the role of the macroeconomic policy environment and reviewing their implications for the pace and sequence of the external liberalization process. The examination concludes with a brief discussion of the role and procedures the IMF envisages to take toward capital account liberalization.
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Bibliographic InfoArticle provided by Universidad del CEMA in its journal Journal of Applied Economics.
Volume (Year): I (1998)
Issue (Month): (November)
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- Ramos-Tallada, J., 2013. "Le FMI et la gestion des flux de capitaux : la longue route vers une approche pragmatique," Bulletin de la Banque de France, Banque de France, issue 192, pages 95-110.
- Yan, Ho-don, 2007. "Does capital mobility finance or cause a current account imbalance?," The Quarterly Review of Economics and Finance, Elsevier, vol. 47(1), pages 1-25, March.
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