The $4 trillion question: what is the impact of prudential regulation?

Sima Kammourieh and Jules Devie

No 2510, FDL Policy Notes from CEPREMAP

Abstract: Emerging markets and developing economies continue to face significant economic and financial challenges. The world bank’s 2024 international debt statistics highlight persistent negative external transfers impacting sovereign debt worldwide, driven mainly by high interest rates. Lower middle-income countries are most affected, but more integrated markets feel these pressures, too. Global uncertainty—like us trade policies and potential interest rate hikes—adds further complexity. As discussions around the cost of capital in developing countries (Africa especially) have come to the fore, one key question has gained renewed focus in recent times, namely: did the changes to the regulatory regime of commercial banks enacted after the Global Financial Crisis (GFC) play a role in changing the quantity and quality of private financial flows to EMDEs?

Keywords: Banking; Capital Markets; Emerging Markets; Financial Flows; Prudential Regulation (search for similar items in EconPapers)
Pages: 33 pages
Date: 2025-07
New Economics Papers: this item is included in nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:cpm:notfdl:2510

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