Implementation in East Asia

Walter, Andrew

doi:10.1057/9780230524378_6

Cited by 2 publications

(1 citation statement)

References 28 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Several have emphasized that without appropriate prudential safeguards, liberalization could lead to or increase instability, and argued that prudential regulations are a necessary precursor of financial liberalization. Yet, as Walter (2003) and Hlaing and Kakinaka (2018) argued, financial reforms often fail to include proper prudential safeguards, not least because designing and implementing new prudential rules requires advanced technical expertise and can be easily blocked by existing vested interests.…”

Section: Financial Liberalization and Prudential Regulationsmentioning

confidence: 99%

Financial Repression is Knocking at the Door, Again

Jafarov

Maino

2019

IMF Working Papers

View full text Add to dashboard Cite

Financial repression (legal restrictions on interest rates, credit allocation, capital movements, and other financial operations) was widely used in the past but was largely abandoned in the liberalization wave of the 1990s, as widespread support for interventionist policies gave way to a renewed conception of government as an impartial referee. Financial repression has come back on the agenda with the surge in public debt in the wake of the Global Financial Crisis, and some countries have reintroduced administrative ceilings on interest rates. By distorting market incentives and signals, financial repression induces losses from inefficiency and rent-seeking that are not easily quantified. This study attempts to assess some of these losses by estimating the impact of financial repression on growth using an updated index of interest rate controls covering 90 countries over 45 years. The results suggest that financial repression poses a significant drag on growth, which could amount to 0.4-0.7 percentage points.

show abstract

Section: Financial Liberalization and Prudential Regulationsmentioning

confidence: 99%