Liberalization of Trade in Financial Services and Financial Sector Stability (Empirical Approach)
AbstractThe paper explores empirically the links between the WTO-driven liberalization of trade in financial services and the stability of national financial systems. Econometric testing of indicators intended to proxy financial sector stability-subdivided into exchange rate and banking sector stability-suggests that opening of the financial sector is an efficient policy instrument at the disposal of the authorities for achieving a variety of macroeconomic goals. While liberalization is found to be broadly conducive to stability, the outcome of liberalization on exchange rate stability is less predictable than on banking sector stability.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 02/139.
Date of creation: 01 Aug 2002
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Postal: International Monetary Fund, Washington, DC USA
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- Bayraktar, Nihal & Yan Wang, 2004. "Foreign bank entry, performance of domestic banks, and sequence of financial liberalization," Policy Research Working Paper Series 3416, The World Bank.
- Valckx, Nico, 2004. "WTO financial services commitments: Determinants and impact on financial stability," International Review of Financial Analysis, Elsevier, vol. 13(4), pages 517-541.
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