Financial Fragility and Economic Performance in Developing Economies: Do Capital Controls, Prudential Regulation and Supervision Matter?

Marco Rossi

No 1999/066, IMF Working Papers from International Monetary Fund

Abstract: Little empirical investigation exists of the links among capital account liberalization, prudential regulation and supervision, financial crises, and economic development, mainly because of the lack of comparable measures to describe regulatory practices for different countries. This paper examines empirically, albeit in a preliminary manner, these links using new measures of capital controls, prudential regulation, supervision, and depositors’ safety for a sample of 15 developing economies over the period 1990–97. Results confirm the importance of the degree of capital account convertibility and the regulatory and supervisory framework in affecting financial fragility and economic performance.

Keywords: WP; banking crisis; liberalization; financial system; crisis; banking; market; Financial Crises; Capital Account Convertibility; Prudential Regulation; Supervision; Deposit Insurance; Economic Performance; liberalization dummy; liberalization process; currency crisis; market institution; capital transaction; capital mobility; Capital controls; Banking crises; Capital account liberalization; Capital account; Capital flows; East Asia (search for similar items in EconPapers)
Pages: 32
Date: 1999-05-01
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Citations: View citations in EconPapers (73)

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