Topic
Financial sector development
About: Financial sector development is a research topic. Over the lifetime, 1674 publications have been published within this topic receiving 90787 citations.
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Posted Content•
01 Jan 1999
TL;DR: In this paper, the authors build a model of a fixed exchange rate regime with escape clauses and output persistence, and they show that persistence generates long run credibility effects that are sensitive to the prevailing policy preferences.
Abstract: We build a model of a fixed exchange rate regime with escape clauses and output persistence. In the spirit of the literature following the Asian crisis in 1997, persistence in our model arises from the inability of the domestic financial institutions to intermediate international credit. Our main message is that since persistence generates long run credibility effects that are sensitive to the prevailing policy preferences, the choice of an optimal exchange rate regime and the preference for a policy target should reflect the degree of development of the domestic financial institutions. If the domestic financial market suffers from credit constraints that generate persistence, the likelihood of self-fulfilli ng currency crisis may be reduced if the government assigns a greater weight on the output stabilisation objective. However, if financial market liberalisation successfully eliminates the credit constraints, liberalisation should be associated with a switch in policy preferences more in favour of exchange rate stability.
17 Jun 2022
TL;DR: In this article , the authors examined the effects of remittances on banks' lending capacity to the private sector as an indicator of financial development in order to ensure that the South Asian region's goal of sustainable financial development is accomplished.
Abstract: Abstract Banks are crucial to the financial system and the economy. In this context, the objective of this study is to examine the effects of overseas remittances on banks' lending capacity to the private sector as an indicator of financial development in order to ensure that the South Asian region's goal of sustainable financial development is accomplished. An ARDL method is used to analyze the time series data from 1975 to 2020. It has been found that remittances have a strong long-term influence on financial development, with each 1% increase in remittance inflow enhances the financial development by 0.42 percent. As a result, the study concludes that remittance inflows are critical to South Asia's financial growth. The findings of this study will assist economic and financial policymakers in channeling remittances in such a manner that it can be used to improve banks' financial capabilities, which will in turn improve the private sector's capacities. Jel Code – H81, G21, F40
Posted Content•
31 May 2017
TL;DR: The role of financial sector development (FSD) has thus become a critical factor in the tourism-growth nexus as discussed by the authors, while the FSD indicator when individually employed, whether as broad money or bank credit to private sector is supportive of the growth nexus, the interaction term has emerged with a negative sign indicating that FSD does not play a complementary role.
Abstract: Tourism in recent years has emerged as the engine of growth in Pacific island countries In Fiji in particular, it has relegated its traditional sugar exports to third place Besides the steadily increasing air passenger traffic, there has been a rising trend in cruise ship arrivals Short visits by cruise ship travelers have become additional sources of income for a host of small scale tourist operators and vendors, most of them being outside the informal sector in around its two major ports In this context, financial inclusion efforts have assumed greater importance as these incomes in some part can find their way as savings into banks The role of financial sector development (FSD) has thus become a critical factor in the tourism-growth nexus This paper finds while the FSD indicator when individually employed, whether as broad money or bank credit to private sector is supportive of the growth nexus, the interaction term is has emerged with a negative sign indicating that FSD does not play a complementary role The financial sector of Fiji is still shallow, despite considerable progress in financial inclusion efforts, measures towards deepening of FSD depend not on one front of mobilization of savings, but on all round progress in various segments of financial sector
Posted Content•
TL;DR: In this article, the authors draw some lessons on why some countries weathered the negative spillovers of the global financial crisis better than others, focusing on the case of the Czech economy, and subsequently bring in some cross-country evidence from the new EU member states.
Abstract: Emerging Central and Eastern Europe is the region most affected by spillovers of the global financial crisis. However, some countries in CEE appeared to have been more prepared and resilient than others. To draw some lessons on why some countries weathered the negative spillovers of the global financial crisis better than others, we focus on the case of the Czech economy, and subsequently bring in some cross-country evidence from the new EU member states. The derived lessons indicate that it is effective to establish a consolidated supervisor at the national level, ideally within a strong and independent central bank. That, consolidation of financial regulation and supervision facilitates a fast-action response, comprehensive data collection and analysis, and increases respect for the supervisor in the financial community. The lessons further stress the role of macro-prudential supervision ensuring, among others, moderate loan-to-deposit ratios of the banking sector and low dollarization of loans through adequate pricing of foreign exchange risk by banks. Further, a prudent macroeconomic management appears to deliver low interest rate differentials and thus a lower share of reversible capital.
02 May 2023
TL;DR: In this paper , the authors examined the macro determinants that significantly affect financial development in the Middle East and North Africa (MENA) region, which could be used furtherly to play a major role in economic sustainability since one of the major driving forces for economic development is the financial development.
Abstract: PurposeThis research aims to examine the macro determinants that significantly affect financial development in the Middle East and North Africa (MENA) region, which could be used furtherly to play a major role in economic sustainability since one of the major driving forces for economic development is the financial development.Design/methodology/approachThe significant determinants of financial development should be efficiently used by the MENA region countries for creating huge financial sector development and innovation, stimulating economic development in turn and leading to the completion of the cycle of development and sustainability. To achieve this study's objective, the researcher employed a quantitative method to develop an econometric model.FindingsThis model consisted of two Panel EGLS Cross-Section Random Effects Models (REMs) in which Domestic credit to the private sector as a percentage of GDP (?PCGDP?_it) and stock market capitalization ratio (?SMC?_it) were taken as the dependent variables. In addition, the independent variables included the corruption perception index, financial freedom (FF), political stability (PS) and trade openness (TO). The researcher extracted the data for the analysis from different databases including the World Bank, the Organization for Economic Cooperation and Development and the International Monetary Fund. Throughout the first – Panel EGLS Cross-Section Random Effects Model, it turned out that, while FF, TO and corruption index had a positive relationship with ?PCGDP?_it, PS had an adverse effect on ?PCGDP?_it. The second – Panel EGLS Cross-Section Random Effects Model showed that, while PS and TO had a positive effect on stock market performance, the corruption index and FF had an adverse effect on stock market performance.Originality/valueThroughout the first – Panel EGLS Cross-Section Random Effects Model, it turned out that, while FF, TO and corruption index had a positive relationship with ?PCGDP?_it, PS had an adverse effect on ?PCGDP?_it. The second – Panel EGLS Cross-Section Random Effects Model showed that, while PS and TO had a positive effect on stock market performance, the corruption index and FF had an adverse effect on stock market performance.