Mauritius Financial System Stress Index: Estimating the Costs of the Subprime Crisis

Indranarain Ramlall

Journal of African Business, 2015, vol. 16, issue 3, 235-271

Abstract: The aim of this paper is to develop a FSSI model for the Mauritius based on 11 components which reflect the core characteristics of Mauritius. Findings show that Mauritius had been affected by the crisis with the costs hovering around 3.4 to 5.4%. Latent risks are identified under public debt sustainability, tourist arrivals and earnings, central bank equity, quality of balance of payments sustainability, trade finance, net foreign investments on the stock market and future GDP growth paths in Europe and USA. Evidence is found of an impotent interest rate channel, a robust credit channel and a vibrant exchange rate channel. Banks' profitability structure is found to be crisis-immune following a maintained interest rate spread at 7% despite a decline in the TED spread. The authorities should concentrate on tourism and credit channels while curtailing the interest rate spread to reinvigorate the interest rate transmission channel.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/15228916.2015.1069678 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:wjabxx:v:16:y:2015:i:3:p:235-271

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/wjab20

DOI: 10.1080/15228916.2015.1069678

Access Statistics for this article

Journal of African Business is currently edited by Samuel Bonsu

More articles in Journal of African Business from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().