The Future of Financial Liberalization in South Asia

Ashima Goyal

No 1203, Development Papers from United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West Asia Office

Abstract: The paper defines financial liberalization, distinguishing between capital account convertibility and liberalization of domestic financial markets. It then examines the stages and the strategy of Indian financial reform and compares it with that of other South Asian countries. The Indian strategy followed a well thought out sequence whereby full capital account liberalization was to come after deepening domestic markets, and improving government finances. One alone is dangerous without the others. The experience of the global crisis has validated the Indian strategy and also shown that foreign entry has benefits but cannot resolve all issues. Deepening domestic markets and better domestic and international regulation is a necessary prerequisite for full convertibility. The stages of future liberalization should be adapted to the needs of financial inclusion, infrastructure finance, and domestic market deepening.

Keywords: Liberalization; capital account convertibility; regulation; inclusion; markets (search for similar items in EconPapers)
Pages: 37 pages
Date: 2012-06
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Citations: View citations in EconPapers (9)

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Related works:
Journal Article: The Future Of Financial Liberalization In South Asia (2012)
Working Paper: The Future of Financial Liberalization in South Asia (2010)
Working Paper: The Future of Financial Liberalization in South Asia (2010)
Working Paper: The Future of financial liberalization in South Asia (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eap:sswadp:dp1203

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