Are Financial Sector Policies Effective in Deeping the Malaysian Financial System
AbstractThis 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, 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.
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Bibliographic InfoPaper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c012_031.
Length: 21 pages
Date of creation: Jun 2007
Date of revision:
Financial development; financial liberalization; Malaysia;
Other versions of this item:
- James B. Ang, 2008. "Are Financial Sector Policies Effective In Deepening The Malaysian Financial System?," Contemporary Economic Policy, Western Economic Association International, vol. 26(4), pages 623-635, October.
- James B. Ang, 2007. "Are Financial Sector Policies Effective In Deepening The Malaysian Financial System?," Monash Economics Working Papers 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-27 (All new papers)
- NEP-DEV-2007-08-27 (Development)
- NEP-FDG-2007-08-27 (Financial Development & Growth)
- NEP-MAC-2007-08-27 (Macroeconomics)
- NEP-SEA-2007-08-27 (South East Asia)
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