Impact of Financial Regulation on Emerging Countries
AbstractThis article analyzes the potential impact of a higher level of capital and liquidity of banks on the credit penetration and the economic development in emerging countries. To do so, it employs an econometric exercise in two stages. In the first stage it is estimated the impact of capital and liquidity on the quantity and the price of credit. In the second stage it is quantified the impact of credit and its price on the GDP per capita. Thus, the impact of regulation on output is estimated using a chain rule. The article shows that in general the effects of capital and liquidity are higher in emerging countries in terms of banking penetration and GDP per capita.
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Bibliographic InfoPaper provided by BBVA Bank, Economic Research Department in its series Working Papers with number 1108.
Length: 19 pages
Date of creation: Mar 2011
Date of revision:
Basel III; capital; liquidity; banking penetration;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
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