Financial Liberalisation, Growth and Adjustment: Some Lessons from Developing Countries

Vos, Rob

doi:10.1007/978-1-349-23800-2_8

Cited by 7 publications

(3 citation statements)

References 11 publications

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“…To conclude, financial reform raises complex technical issues over which there is at best partial consensus (Jansen 1990, Vos 1993. Since reform began, Ethiopia has seen considerable reorganization of state banks as well as the entry of private banks and insurance companies.…”

Section: Discussionmentioning

confidence: 99%

Ethiopia’s New Financial Sector and its Regulation

Addison

Alemayehu²

2003

From Conflict to Recovery in Africa

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Ethiopia is one of a number of SSA economies that adopted state-led development strategies in the 1970s (others include Angola and Mozambique), and suffered from intense conflict (leading to the fall of the Derg regime in 1991). The new government was therefore faced with the twin tasks of reconstructing the economy, and embarking on the transition to a market economy. As part of this process, state banks have been reorganised, the role of the private sector in the financial system has been expanded, interest-rate controls have been liberalized, and the central bank has been given new powers of financial supervision. Financial reform has been gradual, but nevertheless determined despite disagreement with the IMF over restrictions on the entry of foreign banks and the role of the largest state bank. …/… Keywords: sub-Saharan Africa, Ethiopia, conflict, economic reform JEL classification: O10, O55This paper argues that gradual financial liberalization-while simultaneously investing in regulatory capacity-is the appropriate strategy for maintaining macro-economic stability and growth in Ethiopia. In this regard, the Chinese transition strategy-in which significant control was retained over the financial sector-can be a useful guide to strategy design in SSA, provided that rent-seeking can be contained.

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Section: Discussionmentioning

confidence: 99%

Ethiopia’s New Financial Sector and its Regulation

Addison

Alemayehu²

2003

From Conflict to Recovery in Africa

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“…Many of the developing countries, with the exception of a few in Asia, that went through this agonizing reform process have been unable to enjoy the promised benefits in general, and the promised financial sector prosperity in particular. Vos (1993) noted that the major factors which could explain the failure of financial liberalization in Latin America and its success in Asian countries (such as South Korea and Taiwan) were the control and intervention by the state to address structural problems without disregarding market-oriented performance criteria. Thus, for Vos, gradualism and addressing some of the gaps in financial sector reform-such as the lack of sensible prudential supervisory capacity in place before the onset of reform-are crucial.…”

Section: A Brief History Of Banking In Ethiopiamentioning

confidence: 99%

The Structure and Performance of Ethiopia’s Financial Sector in the Pre- and Post-Reform Periods, with a Special Focus on Banking

Alemayehu

2008

Domestic Resource Mobilization and Financial Development

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Since 1992 Ethiopia has been engaged in liberalizing its financial sector. The hallmark of the strategy is gradualism. The approach is not without problems especially from Bretton Woods Institutions that saw the reform as a sluggish process. This study examines this liberalization program by analyzing the performance of the sector before and after the reform. The study notes that given the nascent development of the financial sector in the country, the relatively good shape in which the existing financial institutions find themselves, and given that supervision and regulation capacity of the regulating agency is weak, the government's strategy of gradualism and its over all reform direction is encouraging. However, we argue for charting out clearly defined time frame for liberalization and exploring the possibility of engaging with foreign banks to acquire new technology that enhance the efficiency of the financial sector in general and the banking sector in particular.

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“…The dangers of premature capital account liberalisation in the face of structural impediments to market efficiency have been widely discussed. The lessons to be learnt from the financial crises experienced by other emerging market economies in Latin America and South East Asia include that financial liberalisation can have destabilising consequences if structural problems in the financial sector remain unresolved (Fanelli/McMahon, 1996;Verbeek, 1996;Vos, 1995). Central and eastern European countries have originally adopted a cautious approach with regard to capital account liberalisation and international portfolio investment.…”

Section: Foreign Participation In Domestic Bond Marketsmentioning

confidence: 99%

Bond Markets in Advanced Transition: A Synopsis of the Visegrád Bond Markets

Barysch

Heinemann

Steiger

2000

Central Europe Towards Monetary Union: Macroeconomic Underpinnings and Financial Reputation

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The authors gratefully acknowledge helpfull support from the following members of the ACE-team: Victoria Miickova and Marian Nemec (National Bank of Slovakia), Josef Mervart (Czech National Bank), Jarek Neneman (University of Lodz) and Rita Bozzai (Financial Research Ltd., Budapest). Terms of use: Documents in SummaryBond markets have to fulfil several important functions in the transition process: Through these markets capital can be channelled from domestic and foreign sources to the government and to private enterprises. Thus, an efficient bond market can help to create competition for the intermediation through the banking sector. In addition, government bonds can help to improve the macroeconomic framework through the provision of a non-inflationary instrument to finance government deficits. Behind this background, this analysis gives a synopsis of the stage of bond market development in the Visegrad countries. Apart from looking at the situation of different bond market sections, the primary and secondary markets, interest is also paid to the institutional and legal framework. Furthermore, the integration of these emerging bond markets into the international capital market is assessed. This synopsis indicates that although Visegrad bond markets have already proceeded far some shortcomings still remain. These concern among others low liquidity, an incomplete term structure of interest rates and the absence of markets for interest rate derivatives.

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Financial Liberalisation, Growth and Adjustment: Some Lessons from Developing Countries

Cited by 7 publications

References 11 publications

Ethiopia’s New Financial Sector and its Regulation

Ethiopia’s New Financial Sector and its Regulation

The Structure and Performance of Ethiopia’s Financial Sector in the Pre- and Post-Reform Periods, with a Special Focus on Banking

Bond Markets in Advanced Transition: A Synopsis of the Visegrád Bond Markets

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