Showing papers on "Financial sector development published in 1990"

Monetary policy instruments for developing countries

Abstract: Rapid structural change and widespread adoption of financial sector reforms in developing countries have placed pressure on traditional instruments of monetary control. It is widely accepted that, if the necessary macroeconomic control can be maintained, a move to an indirect, market-oriented system of monetary policy instruments will help the financial sector perform in a sounder and more efficient manner, resulting in the maximum contribution to economic development. With these developments in mind, the Financial Policy and Systems Division of the World Bank organized a seminar in May, 1990, which brought together experts from industrial and middle income countries, together with some of the Bank's own financial sector specialists and those of the International Monetary Fund, to discuss the lessons of recent experience with indirect methods of monetary control. This volume reports the edited proceedings of the seminar and will be of value to policy makers and students of developing countries.

The restructuring of financial systems in Latin America

Abstract: This paper focuses mainly on the problems related to financial stabilization and adjustment. Three general problems of particular topicality in Latin America today, are discussed : 1) management of the financing of the public deficit; 2) policies to deal with insolvency and illiquidity of financial intermediaries; and 3) policies, issues, and options for further development of financial systems. With regard to point no. 1, three main questions are raised : a) taking a broad view of taxation, can the inflation tax be recommended as part of the taxation system?; b) what are the advantages and disadvantages of using external borrowing, as opposed to internal borrowing? and c) what is the relationship between deficit finance and financial policies in general? Problem no. 2 deals with financial distress which is acute in Latin America because of the generally high rate of inflation and high levels of debt. Other causes include a poor macroeconomic and fiscal environment, unfavorable external circumstances, problems in productive sectors of the economy, and mismanagement in the financial sector itself. The last broad theme concentrates on problem no. 3. At issue are longer term institutional developments and a way in which Latin American countries might seek to extend and strengthen their financial systems to better support longer-term economic development. This includes problems faced by public financial institutions and development of money and capital markets.

Monetary Policy in Bhutan : Implications of Indian Rupee Circulation

Abstract: The central bank of Bhutan issues its currency the ngultrum. At the same time, the Indian rupee circulates within the country with parity This paper investigates the implications of rupee circulation for monetary policy in Bhutan using the money multiplier framework and evaluates the impact of the "outside" rupee, e.g., Indian currency held within the borders of Bhutan but remaining outside of Bhutan's banking system. The conclusion that emerges is that Bhutan's monetary authorities should continue their efforts on financial sector development since that will gradually lead to absorption of the Indian rupee into the country's financial system and thereby strengthen the link between monetary variables and economic activities.