Capital Flows and Domestic Financial Sector in India
AbstractThis paper examines the impact of capital flows on the domestic financial sector in India. Inflow of foreign capital, it is found, has a significant impact on domestic money supply and stock market growth, liquidity and volatility. The banking sector, however, remains relatively insulated due to the policy responses of the central bank and barriers to direct capital inflows into the banking system. The paper concludes with a discussion of the costs of these policies in the event of a heavy inflow of foreign capital.
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Bibliographic InfoPaper provided by EconWPA in its series International Finance with number 0405012.
Length: 7 pages
Date of creation: 08 May 2004
Date of revision:
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capital flows; domestic financial sector; India; money supply; stock market; volatility; banking sector; capital account liberalisation; management of capital;
Find related papers by JEL classification:
- F3 - International Economics - - International Finance
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-05-09 (All new papers)
- NEP-CWA-2004-05-09 (Central & Western Asia)
- NEP-IFN-2004-05-09 (International Finance)
- NEP-MFD-2004-05-09 (Microfinance)
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