Impact of Financial Regulation on Emerging Countries

Maria Abascal, Luis Carranza (), Mayte Ledo and Arnoldo Lopez Marmolejo

No 1108, Working Papers from BBVA Bank, Economic Research Department

Abstract: This article analyzes the potential impact of a higher level of capital and liquidity of banks on the credit penetration and the economic development in emerging countries. To do so, it employs an econometric exercise in two stages. In the first stage it is estimated the impact of capital and liquidity on the quantity and the price of credit. In the second stage it is quantified the impact of credit and its price on the GDP per capita. Thus, the impact of regulation on output is estimated using a chain rule. The article shows that in general the effects of capital and liquidity are higher in emerging countries in terms of banking penetration and GDP per capita.

Keywords: Basel III; capital; liquidity; banking penetration (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2011-03
New Economics Papers: this item is included in nep-ban and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bbv:wpaper:1108

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