{
  "title": "Explaining the Behavior of Financial Intermediation: Evidence from Transition Economies",
  "publication": "IMF Working Papers, March 1, 1999",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/explaining-the-behavior-of-financial-intermediation-evidence-from-transition-economies-2909",
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  "summary": "This paper investigates the effects of macroeconomic and structural variables on financial intermediation. To this end, it presents a theoretical foundation for two new measures of intermediation, the money multiplier and the ratio of private sector credit to monetary base.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- The paper investigates the effects of macroeconomic and structural variables on financial intermediation.\n- It presents a theoretical foundation for two measures of intermediation:\n  - the money multiplier\n  - the ratio of private sector credit to monetary base\n- Panel estimations cover 19 transition economies."
    },
    {
      "heading": "Key findings",
      "content": "- Results indicate that policy makers need to address in particular:\n  - problems of bad loans on bank balance sheets\n  - high market concentration\n- Maintaining a stable macroeconomic environment is also important.\n- Further variables found to possess less explanatory power include:\n  - minimum reserve requirements\n  - the capital adequacy ratio"
    },
    {
      "heading": "Methodology and scope",
      "content": "- Uses a theoretical foundation for two new measures of intermediation (money multiplier; ratio of private sector credit to monetary base).\n- Empirical analysis: panel estimations covering 19 transition economies."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Priorities for policy makers:\n  - Resolve bad loans on bank balance sheets.\n  - Reduce high market concentration in the banking sector.\n  - Maintain a stable macroeconomic environment.\n- Less emphasis may be warranted on altering:\n  - minimum reserve requirements\n  - capital adequacy ratio, given their lower explanatory power in this analysis.\n\n---\n\n Content in this bundle\n\n- Explaining the Behavior of Financial Intermediation:  Evidence from Transition Economies - WP/99/36\n  - Explaining the Behavior of Financial Intermediation:  Evidence from Transition Economies - WP/99/36 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Explaining the Behavior of Financial Intermediation:  Evidence from Transition Economies - WP/99/36 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/explaining-the-behavior-of-financial-intermediation-evidence-from-transition-economies-2909"
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    "Authors: Philipp C Rother",
    "Published: March 1, 1999",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451845433.001",
    "The paper investigates the effects of macroeconomic and structural variables on financial intermediation.",
    "It presents a theoretical foundation for two measures of intermediation:",
    "Panel estimations cover 19 transition economies.",
    "Results indicate that policy makers need to address in particular:",
    "Maintaining a stable macroeconomic environment is also important.",
    "Further variables found to possess less explanatory power include:",
    "Uses a theoretical foundation for two new measures of intermediation (money multiplier; ratio of private sector credit to monetary base).",
    "Empirical analysis: panel estimations covering 19 transition economies.",
    "Priorities for policy makers:",
    "Less emphasis may be warranted on altering:",
    "**Explaining the Behavior of Financial Intermediation:  Evidence from Transition Economies - WP/99/36**"
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