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Globalization and National Financial Systems

Author

Listed:
  • James A. Hanson
  • Patrick Honohan
  • Giovanni Majnoni

Abstract

The volume is divided into five traditional areas of finance: the macroeconomy, banking, securities markets, pension issues, and regulations. Four cross-cutting messages emerge. First, the erosion of national frontiers by trade, tourism, migration, and capital account liberalization means that residents of all countries have substantial financial assets, and often liabilities denominated in foreign currencies at home or abroad. Any analysis of national financial systems must take this into account. More important, this factor constrains governments' use of macroeconomic and financial policy and may contribute to economic fluctuations. Second, individuals and firms benefit substantially from the improved risk and return menu associated with global diversification. Diversification is of particular importance in developing countries where the lack of size and diversity of the national economy results in instability in the value of production. Third, the small size of most developing countries limits the efficiency and quality of financial services: banking, equity markets, and pensions. Thus cross-border provision of financial services, one facet of globalization, has potential benefits for small economies. Fourth, taking full advantage of the opportunities presented by globalization and minimizing its costs depend on effective regulation and supervision to ensure good quality information, transparency, market integrity, and prudent investing by banks and pension funds.

Suggested Citation

  • James A. Hanson & Patrick Honohan & Giovanni Majnoni, 2003. "Globalization and National Financial Systems," World Bank Publications, The World Bank, number 15160, June.
  • Handle: RePEc:wbk:wbpubs:15160
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    Citations

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    Cited by:

    1. Arturo Galindo & Leonardo Leiderman, 2005. "Living with Dollarization and the Route to Dedollarization," Research Department Publications 4397, Inter-American Development Bank, Research Department.
    2. Claessens, Stijn, 2006. "Access to financial services: a review of the issues and public policy objectives," Journal of Financial Transformation, Capco Institute, vol. 17, pages 16-19.
    3. Obadan, Mike I., 2006. "Globalization of finance and the challenge of national financial sector development," Journal of Asian Economics, Elsevier, vol. 17(2), pages 316-332, April.
    4. Dewan Mostafizur Rahman Author_Email: & Kohinur Akter, 2011. "Financial Liberalization And Interest Rate Convergence-An Empirical Study On Bangladesh," 2nd International Conference on Business and Economic Research (2nd ICBER 2011) Proceeding 2011-456, Conference Master Resources.
    5. Koji KUBO, 2008. "Do Foreign Currency Deposits Promote Or Deter Financial Intermediary Development In Low-Income Countries? An Empirical Analysis Of Cross-Country Data," The Developing Economies, Institute of Developing Economies, vol. 46(3), pages 264-289.
    6. -, Anurag, 2012. "Dollarization:Demand of time or the result of mismanagement of economy," MPRA Paper 58619, University Library of Munich, Germany.
    7. Bumba Mukherjee & Vineeta Yadav & Sergio Bejar, 2014. "Candidate-centred systems, public banks and equity market restrictions in developing democracies," Review of International Political Economy, Taylor & Francis Journals, vol. 21(3), pages 670-709, June.
    8. Porzecanski, Arturo C., 2009. "Latin America: The Missing Financial Crisis," MPRA Paper 18780, University Library of Munich, Germany.
    9. Bumba Mukherjee & Benjamin E. Bagozzi, 2013. "The IMF, Domestic Public Sector Banks, and Currency Crises in Developing States," International Interactions, Taylor & Francis Journals, vol. 39(1), pages 1-29, January.
    10. Stijn Claessens & Erik Feijen, 2006. "Financial Sector Development and the Millennium Development Goals," World Bank Publications, The World Bank, number 7145, June.
    11. repec:eip:journl:y:2016:i:4:p:106-117 is not listed on IDEAS

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