{
  "title": "Rethinking Financial Deepening: Stability and Growth in Emerging Markets",
  "publication": "Staff Discussion Notes, May 4, 2015",
  "sourceUrl": "https://www.imf.org/en/publications/staff-discussion-notes/issues/2016/12/31/rethinking-financial-deepening-stability-and-growth-in-emerging-markets-42868",
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  "summary": "The global financial crisis experience shone a spotlight on the dangers of financial systems that have grown too big too fast. This note reexamines financial deepening, focusing on what emerging markets can learn from the advanced economy experience.",
  "sections": [
    {
      "heading": "Summary and framing",
      "content": "- The global financial crisis experience \"shone a spotlight on the dangers of financial systems that have grown too big too fast.\"\n- The note \"reexamines financial deepening, focusing on what emerging markets can learn from the advanced economy experience.\"\n- Core conclusion: gains for growth and stability from financial deepening remain large for most emerging markets, but there are limits on size and speed."
    },
    {
      "heading": "Key findings",
      "content": "- Financial deepening can deliver substantial benefits for growth and stability in most emerging markets.\n- When financial deepening outpaces the strength of the supervisory framework, it leads to excessive risk taking and instability.\n- The set of regulatory reforms that promote financial depth is essentially the same as those that contribute to greater stability.\n- \"Better regulation—not necessarily more regulation—thus leads to greater possibilities both for development and stability.\""
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Strengthen supervisory frameworks to keep pace with financial deepening to avoid excessive risk taking and instability.\n- Prioritize regulatory reforms that both promote financial depth and enhance stability rather than simply increasing the volume of regulation.\n- Focus on the quality of regulation (\"better regulation\") as a means to expand development opportunities while preserving stability."
    },
    {
      "heading": "Metadata and classification (from publication)",
      "content": "- Authors: Ratna Sahay, Martin Cihak, Papa M N'Diaye, Adolfo Barajas, Diana B Ayala Pena, Ran Bi, Yuan Gao, Annette J Kyobe, Lam Nguyen, Christian Saborowski, Katsiaryna Svirydzenka, Reza Yousefi\n- Date: May 4, 2015\n- Series: Staff Discussion Notes No. 2015/008\n- Issue: 008\n- Volume: 2015\n- Pages: 41\n- DOI: https://doi.org/10.5089/9781498312615.006\n- Stock No: SDNEA201508\n- ISBN: 9781498312615\n- ISSN: 2617-6750\n- Subject: Commercial banks, Financial sector, Financial sector development, Financial sector stability, Stock markets\n- Keywords: bank credit, capital market, financial crisis, insurance market liberalization, marginal costs and benefits, private sector, SDN\n\nRethinking Financial Deepening: Stability and Growth in Emerging Markets, Staff Discussion Notes No. 2015/008.\n\n---\n\n Content in this bundle\n\n- Rethinking Financial Deepening: Stability and Growth\n  - Rethinking Financial Deepening: Stability and Growth (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Rethinking Financial Deepening: Stability and Growth (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/staff-discussion-notes/issues/2016/12/31/rethinking-financial-deepening-stability-and-growth-in-emerging-markets-42868"
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    "Authors: Ratna Sahay, Martin Cihak, Papa M N'Diaye, Adolfo Barajas, Diana B Ayala Pena, Ran Bi, Yuan Gao, Annette J Kyobe, Lam Nguyen, Christian Saborowski, Katsiaryna Svirydzenka, Reza Yousefi",
    "Published: May 4, 2015",
    "Series: Staff Discussion Notes",
    "DOI: https://doi.org/10.5089/9781498312615.006",
    "The global financial crisis experience \"shone a spotlight on the dangers of financial systems that have grown too big too fast.\"",
    "The note \"reexamines financial deepening, focusing on what emerging markets can learn from the advanced economy experience.\"",
    "Core conclusion: gains for growth and stability from financial deepening remain large for most emerging markets, but there are limits on size and speed.",
    "Financial deepening can deliver substantial benefits for growth and stability in most emerging markets.",
    "When financial deepening outpaces the strength of the supervisory framework, it leads to excessive risk taking and instability.",
    "The set of regulatory reforms that promote financial depth is essentially the same as those that contribute to greater stability.",
    "\"Better regulation—not necessarily more regulation—thus leads to greater possibilities both for development and stability.\"",
    "Strengthen supervisory frameworks to keep pace with financial deepening to avoid excessive risk taking and instability.",
    "Prioritize regulatory reforms that both promote financial depth and enhance stability rather than simply increasing the volume of regulation.",
    "Focus on the quality of regulation (\"better regulation\") as a means to expand development opportunities while preserving stability.",
    "Authors: Ratna Sahay, Martin Cihak, Papa M N'Diaye, Adolfo Barajas, Diana B Ayala Pena, Ran Bi, Yuan Gao, Annette J Kyobe, Lam Nguyen, Christian Saborowski, Katsiaryna Svirydzenka, Reza Yousefi",
    "Date: May 4, 2015",
    "Series: Staff Discussion Notes No. 2015/008",
    "Issue: 008",
    "Volume: 2015",
    "Pages: 41",
    "DOI: https://doi.org/10.5089/9781498312615.006",
    "Stock No: SDNEA201508",
    "ISBN: 9781498312615",
    "ISSN: 2617-6750",
    "Subject: Commercial banks, Financial sector, Financial sector development, Financial sector stability, Stock markets",
    "Keywords: bank credit, capital market, financial crisis, insurance market liberalization, marginal costs and benefits, private sector, SDN",
    "**Rethinking Financial Deepening: Stability and Growth**"
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