Financial Globalization and Bank Lending: The Limits of Domestic Monetary Policy in The Gambia

Limitations of domestic Monetary Policies in The Gambia highlight the challenges faced by developing countries in managing their domestic economies in the context of bank lending as well as financial globalisation. The high level of financial integration with global markets, brought about by globalisation and advancements in science and technology, means that domestic monetary policies in developing countries have a limited impact on managing the domestic economies, as interest rates and exchange rates are increasingly influenced by global factors beyond the control of domestic monetary and fiscal policies . As such, these countries experience challenges in managing inflation and promoting economic growth. At the same time, scientific advancements and technology have facilitated financial globalisation and made it easier for banks to lend to customers in different countries, but these developments have also raised concerns about the regulation of cross-border lending and the potential for financial instability in the global financial system. It has become increasingly important for affected countries to put in place policies and strategies that shield their economies from these external shocks and influences to allow them to control inflation and promote economic growth.