WTO Financial Services Commitments: Determinants and Impacton Financial Stability

Nico Valckx

No 2002/214, IMF Working Papers from International Monetary Fund

Abstract: The paper investigates the factors that have influenced WTO members to take on their chosen level of liberalization commitments in the framework of liberalization of trade in financial services and the impact of such commitments on financial sector stability. The most important factors are economic growth, current account, trends in banking sector development, policy restrictiveness, and peer group effects. The econometric evidence suggests that more liberal commitments may be associated with greater vulnerability to currency and banking crises-most likely a short-term effect, which should be mitigated with time through increased market efficiency and better resource allocation.

Keywords: WP; banking crisis; liberalization commitment; financial services commitment; high-commitment country; Financial services liberalization commitments; choice of commitments; banking and currency crises; financial instability; extreme bounds analysis; WTO; crisis country; low-commitment country; bank crisis model; Banking crises; Currency crises; Financial sector; East Asia (search for similar items in EconPapers)
Pages: 35
Date: 2002-12-01
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Citations: View citations in EconPapers (7)

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