Liberalization of Trade in Financial Services and Financial Sector Stability (Empirical Approach)

Author/Editor:

Alexei P Kireyev

Publication Date:

August 1, 2002

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The paper explores empirically the links between the WTO-driven liberalization of trade in financial services and the stability of national financial systems. Econometric testing of indicators intended to proxy financial sector stability-subdivided into exchange rate and banking sector stability-suggests that opening of the financial sector is an efficient policy instrument at the disposal of the authorities for achieving a variety of macroeconomic goals. While liberalization is found to be broadly conducive to stability, the outcome of liberalization on exchange rate stability is less predictable than on banking sector stability.

Series:

Working Paper No. 2002/139

Subject:

Economic sectors Exchange rate stability Financial sector Financial sector policy and analysis Financial sector stability Financial services Foreign exchange International trade Trade in services

English

Publication Date:

August 1, 2002

ISBN/ISSN:

9781451856057/1018-5941

Stock No:

WPIEA1392002

Pages:

27

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