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Finance for growth : policy choices in a volatile world (Chinese)

The overall impact of financial globalization on the domestic financial sector is profound. Liberalization of capital flows has effectively made domestic financial repression obsolete. The consequences have not been uniformly favorable. Following liberalization, domestic interest rates in developing countries have moved to a premium over industrial country rates, and can surge at times of currency speculation. Heightened interest rate and exchange rate volatility pose practical risk management difficulties for financial intermediaries and reinforce the need for appropriate infrastructures and incentives for risk containment, as well as for good macropolicies. On the other hand, the cost of equity capital has been reduced by allowing foreign investor access to local equity markets and allowing local firms to list abroad. Increased international flows through the equity markets have not been the major contributor to increased international sources of volatility. In addition to opening access to foreign-sourced financial services, more and more countries have been permitting foreign-owned banks and other financial firms to operate locally. Although this can represent a threat to domestic owners of financial firms, the drawback is outweighed by improved service quality. On all three fronts--debt, equity, and services--the costs and risks as well as the benefits of increased financial globalization. knowledges

Details

  • Author

    Caprio, Gerard Honohan, Patrick

  • Document Date

    2001/01/01

  • Document Type

    Publication

  • Report Number

    22239

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2010/07/01

  • Disclosure Status

    Disclosed

  • Doc Name

    Finance for growth : policy choices in a volatile world

  • Keywords

    Policy making; Financial & private sector development; Government finance; Bank regulation; Financial services; Capital account; Financial liberalization; Equity markets; Debt flows; Interest rates; Exchange rates; Capital intensity; Productivity; Intermediation; Globalization; Cost-benefit analysis,,

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Citation

Caprio, Gerard Honohan, Patrick

Finance for growth : policy choices in a volatile world (Chinese). A World Bank policy research report Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/270211467986240306/Finance-for-growth-policy-choices-in-a-volatile-world