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How international monetary system reform shapes financial development༟

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  • Hu, Jingqian
  • Li, Hongren

Abstract

With the deepening of global economic integration, reforms of the international monetary system have become increasingly central to global financial governance. This study investigates how international monetary system reform (IMSR) influences financial development and examines the moderating role of social trust in this relationship. Using cross-country panel data from 2014 to 2023, we analyze the impact of IMSR on financial development, measured by the depth, efficiency, and accessibility of financial markets. The empirical results reveal three key findings. First, IMSR significantly promotes financial development by enhancing capital allocation efficiency and facilitating cross-border capital flows. Second, higher levels of social trust contribute positively to financial market performance by reducing information asymmetry and transaction costs. Third, social trust strengthens the positive effect of IMSR on financial development, suggesting that institutional reforms are more effective in high-trust environments. These findings provide new insights into the interaction between international monetary reforms and domestic financial systems, highlighting the importance of social capital in amplifying the financial benefits of global monetary restructuring.

Suggested Citation

  • Hu, Jingqian & Li, Hongren, 2026. "How international monetary system reform shapes financial development༟," Finance Research Letters, Elsevier, vol. 105(C).
    • Handle: RePEc:eee:finlet:v:105:y:2026:i:c:s1544612326007865
    DOI: 10.1016/j.frl.2026.110258
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