Sequencing of Financial Sector Reforms: A Review

IMF Working Papers, September 1, 1994

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Sequencing of Financial Sector Reforms: A Review

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Bibliographic details

• Authors: Vicente Galbis
• Published: September 1, 1994
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451852462.001

Overview

• Author: Vicente Galbis
• Publication date: September 1, 1994
• Type: IMF Working Paper (Working Paper No. 1994/101)
• Core objective: Review of the literature on analytical issues and country experiences on the sequencing of financial sector reforms.

Major themes reviewed

• Choice between big-bang and gradual reforms.
• Relationship of financial sector reforms to other economic reforms.
• Internal sequencing of financial sector measures.
• Influence of initial conditions on reform outcomes.
• Conclusion emphasizing a pragmatic approach: "a pragmatic approach to the sequencing issue is necessary as there are only a few general principles valid for all countries."

Key findings and analytical points

• The paper provides a review of both analytical issues and country experiences on sequencing of financial sector reforms.
• Discusses trade-offs and considerations in choosing big-bang versus gradual reform strategies.
• Examines how sequencing of financial sector reforms interacts with broader economic reform programs.
• Analyzes internal sequencing among financial-sector measures (for example, liberalization measures and interest rate liberalization).
• Highlights the role of initial conditions in shaping feasible and effective reform sequences.

Policy implications and recommendations

• Advocate for a pragmatic, context-dependent approach to sequencing reforms rather than one-size-fits-all prescriptions.
• Recognize that only a few general principles apply across countries; policy sequencing should account for country-specific initial conditions and institutional capacity.

Subjects and keywords

• Subject: Economic sectors, Financial crises, Financial regulation and supervision, Financial sector, Financial sector reform, Monetary policy, Monetary policy instruments
• Keywords: capital liberalization, financial institution, financial liberalization, Financial sector, Financial sector reform, interest rate, interest rate liberalization, liberalization, liberalization measure, liberalization process, market, market determination, market distortion, market equilibrium, Monetary policy instruments, treasury bill market, WP