Are Financial Sector Policies Effective In Deepening The Malaysian Financial System?
This paper provides an empirical assessment of the effects of financial sector policies on development of the financial system in Malaysia over the period 1959-2005. The technique of principal component analysis is used to construct a summary measure of interest rate policies in order to account for the joint influence of various interest rate controls imposed on the Malaysian financial system. The results show that economic development, interest rate controls and capital liquidity requirements positively affect the level of financial development. However, higher statutory reserve requirements and the presence of directed credit programs appear to be harmful for development of the Malaysian financial system. The results provide some support to the argument that some form of financial restraints may help promote financial development.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, Monash University, Victoria 3800, Australia|
Web page: http://www.buseco.monash.edu.au/eco/
More information through EDIRC
|Order Information:|| Web: http://www.buseco.monash.edu.au/eco/research/papers/ Email: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James Ang, 2009. "Financial development and the FDI-growth nexus: the Malaysian experience," Applied Economics, Taylor & Francis Journals, vol. 41(13), pages 1595-1601.
- Shandre M. Thangavelu & Ang Beng Jiunn & James, 2004. "Financial development and economic growth in Australia: An empirical analysis," Empirical Economics, Springer, vol. 29(2), pages 247-260, 05.
- Panicos O. Demetriades & Khaled A.Hussein, 1995.
"Does Financial Development Cause Economic Growth? Time-Series Evidence from 16 Countries,"
Keele Department of Economics Discussion Papers (1995-2001)
95/13, Department of Economics, Keele University.
- Demetriades, Panicos O. & Hussein, Khaled A., 1996. "Does financial development cause economic growth? Time-series evidence from 16 countries," Journal of Development Economics, Elsevier, vol. 51(2), pages 387-411, December.
- McKinnon, Ronald I & Pill, Huw, 1997. "Credible Economic Liberalizations and Overborrowing," American Economic Review, American Economic Association, vol. 87(2), pages 189-93, May.
- Gennotte, Gerard & Pyle, David, 1991. "Capital controls and bank risk," Journal of Banking & Finance, Elsevier, vol. 15(4-5), pages 805-824, September.
- James H. Stock & Mark W. Watson, 1991.
"A simple estimator of cointegrating vectors in higher order integrated systems,"
Working Paper Series, Macroeconomic Issues
91-3, Federal Reserve Bank of Chicago.
- Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July.
- Kim, Daesik & Santomero, Anthony M, 1988. " Risk in Banking and Capital Regulation," Journal of Finance, American Finance Association, vol. 43(5), pages 1219-33, December.
- Panicos O. Demetriades & Kul B. Luintel, 1997.
"The Direct Costs Of Financial Repression: Evidence From India,"
The Review of Economics and Statistics,
MIT Press, vol. 79(2), pages 311-320, May.
- Panicos Demetriades & Kul B. Luintel, 1995. "The Direct Costs of Financial Repression: Evidence from India," Keele Department of Economics Discussion Papers (1995-2001) 95/12, Department of Economics, Keele University.
- Bewley, R. A., 1979. "The direct estimation of the equilibrium response in a linear dynamic model," Economics Letters, Elsevier, vol. 3(4), pages 357-361.
- Arestis, Philip, et al, 2002.
"The Impact of Financial Liberalization Policies on Financial Development: Evidence from Developing Economies,"
International Journal of Finance & Economics,
John Wiley & Sons, Ltd., vol. 7(2), pages 109-21, April.
- Philip Arestis & Panicos O. Demetriades & Bassam Fattouh & Kostas Mouratidis, 2002. "The Impact of Financial Liberalisation Policies on Financial Development Evidence from Developing Economies," Discussion Papers in Economics 02/1, Department of Economics, University of Leicester.
- Demetriades, Panicos O. & Luintel, Kul B., 2001.
"Financial restraints in the South Korean miracle,"
Journal of Development Economics,
Elsevier, vol. 64(2), pages 459-479, April.
- Asli DemirgÃ¼Ã§-Kunt & Enrica Detragiache, 1998. "The Determinants of Banking Crises in Developing and Developed Countries," IMF Staff Papers, Palgrave Macmillan, vol. 45(1), pages 81-109, March.
- Arestis, Philip & Demetriades, Panicos O, 1997.
"Financial Development and Economic Growth: Assessing the Evidence,"
Royal Economic Society, vol. 107(442), pages 783-99, May.
- Panicos O. Demetriades & Philip Arestis, 1996. "Financial Development and Economic Growth: Assessing the Evidence," Keele Department of Economics Discussion Papers (1995-2001) 96/16, Department of Economics, Keele University.
- Schwarz, Anita M., 1992. "How effective are directed credit policies in the United States? A literature survey," Policy Research Working Paper Series 1019, The World Bank.
- Delano Villanueva & Abbas Mirakhor, 1990. "Strategies for Financial Reforms: Interest Rate Policies, Stabilization, and Bank Supervision in Developing Countries," IMF Staff Papers, Palgrave Macmillan, vol. 37(3), pages 509-536, September.
- Ang, James B. & McKibbin, Warwick J., 2007.
"Financial liberalization, financial sector development and growth: Evidence from Malaysia,"
Journal of Development Economics,
Elsevier, vol. 84(1), pages 215-233, September.
- James B. Ang & Warwick J. McKibbin, 2005. "Financial Liberalization, Financial Sector Development And Growth: Evidence From Malaysia," CAMA Working Papers 2005-05, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
- Inder, Brett, 1993. "Estimating long-run relationships in economics : A comparison of different approaches," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 53-68.
- James Ang, 2007. "Are saving and investment cointegrated? The case of Malaysia (1965-2003)," Applied Economics, Taylor & Francis Journals, vol. 39(17), pages 2167-2174.
- Kevin C. Murdock & Thomas F. Hellmann & Joseph E. Stiglitz, 2000. "Liberalization, Moral Hazard in Banking, and Prudential Regulation: Are Capital Requirements Enough?," American Economic Review, American Economic Association, vol. 90(1), pages 147-165, March.
When requesting a correction, please mention this item's handle: RePEc:mos:moswps:2007-02. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Simon Angus)
If references are entirely missing, you can add them using this form.