What does the new face of international financial intermediation mean for emerging market economies?

Hyun Song Shin and Philip Turner

Financial Stability Review, 2015, issue 19, 25-36

Abstract: A key trend common to most emerging markets is that, over the past 15 years or so, banks have become less dominant as the primary channel of international financial intermediation. In addition to banks, the international debt securities market, both for sovereigns and for private borrowers, has emerged as an important channel of external financial flows to emerging markets. This shifting pattern of financial intermediation has major implications not only for monetary policy in the current low interest rate environment but also for financial stability. Of particular interest is the heightened sensitivity of emerging economies to global long-term interest rates. The purpose of this short paper is to give an overview of the changing pattern of financial intermediation and outline the new policy challenges for emerging market economies, both for monetary policy and for financial stability.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:bfr:fisrev:2015:19:03

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