Liberalization of Trade in Financial Services and Financial Sector Stability (Empirical Approach)

Alexei Kireyev ()

No 2002/139, IMF Working Papers from International Monetary Fund

Abstract: The paper explores empirically the links between the WTO-driven liberalization of trade in financial services and the stability of national financial systems. Econometric testing of indicators intended to proxy financial sector stability-subdivided into exchange rate and banking sector stability-suggests that opening of the financial sector is an efficient policy instrument at the disposal of the authorities for achieving a variety of macroeconomic goals. While liberalization is found to be broadly conducive to stability, the outcome of liberalization on exchange rate stability is less predictable than on banking sector stability.

Keywords: WP; liberalization; financial service; exchange rate; liberalization measure; financial services; financial sector stability; trade liberalization; financial services liberalization; transmission variable; liberalization commitment; liberalization indices; a number of country report; liberalization of trade; WTO framework; sequenced liberalization; liberalization dummy; Trade in services; Financial sector; Exchange rate stability (search for similar items in EconPapers)
Pages: 27
Date: 2002-08-01
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Citations: View citations in EconPapers (7)

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