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WTO financial services commitments: Determinants and impact on financial stability

  • Valckx, Nico

The paper investigates the factors that have influenced WTO members to take on their chosen level of liberalization commitments in the framework of liberalization of trade in financial services and the impact of such commitments on financial sector stability. The most important factors are economic growth, current account, trends in banking sector development, policy restrictiveness, and peer group effects. The econometric evidence suggests that more liberal commitments may be associated with greater vulnerability to currency and banking crises-most likely a short-term effect, which should be mitigated with time through increased market efficiency and better resource allocation.

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Article provided by Elsevier in its journal International Review of Financial Analysis.

Volume (Year): 13 (2004)
Issue (Month): 4 ()
Pages: 517-541

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Handle: RePEc:eee:finana:v:13:y:2004:i:4:p:517-541
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  19. Alexei Kireyev, 2002. "Liberalization of Trade in Financial Services and Financial Sector Stability (Empirical Approach)," IMF Working Papers 02/139, International Monetary Fund.
  20. Weller, Christian E., 1999. "Financial crises after financial liberalization: Exceptional circumstances or structural weakness?," ZEI Working Papers B 15-1999, ZEI - Center for European Integration Studies, University of Bonn.
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