Dollarization Of Financial Intermediation

Author : Mr.Alain Ize
Publisher : International Monetary Fund
ISBN 13 : 1451844638
Total Pages : 49 pages
Book Rating : 4.34/5 ( download)

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Download or read book Dollarization of Financial Intermediation written by Mr.Alain Ize and published by International Monetary Fund. This book was released on 1998-03-01 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a portfolio model of financial intermediation in which currency choice is determined by hedging decisions on both sides of a bank’s balance sheet. Minimum variance portfolio (MVP) allocations are found to provide a natural benchmark to estimate the scope for dollarization of bank deposits and loans as a function of macroeconomic uncertainty. Dollarization hysteresis is shown to occur when the expected volatility of the inflation rate is high in relation to that of the real exchange rate. The evidence shows that MVP dollarization generally approximates actual dollarization closely for a broad sample of countries, and policy implications are explored.

Author : Alain Ize
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.72/5 ( download)

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Download or read book Dollarization of Financial Intermediation written by Alain Ize and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a portfolio model of financial intermediation in which currency choice is determined by hedging decisions on both sides of banks' balance sheets. Minimum variance portfolio (MVP) allocations are found to provide a natural benchmark to estimate the scope for dollarization of bank deposits and loans as a function of macroeconomic uncertainty. In particular, dollarization hysteresis is shown to occur when the expected volatility of the inflation rate is high in relation to that of the real exchange rate. The evidence seems to support these conclusions as MVP dollarization generally approximates actual dollarization closely for a broad sample of countries. The paper also shows that deviations from MVP can result, inter alia, from shifts in the location of bank deposits, the level and currency composition of domestic public debt, and the implicit taxation of financial intermediation through reserve requirements. The implications for altering dollarization and conducting monetary policy in dollarized economies are explored.

Author : Patrick Honohan
Publisher : World Bank Publications
ISBN 13 :
Total Pages : 52 pages
Book Rating : 4./5 ( download)

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Download or read book Dollarization of the Banking System written by Patrick Honohan and published by World Bank Publications. This book was released on 2003 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: De Nicolo, Honohan, and Ize assess the benefits and risks associated with dollarization of the banking system. The authors provide novel empirical evidence on the determinants of dollarization, its role in promoting financial development, and on whether dollarization is associated with financial instability. They find that: The credibility of macroeconomic policy and the quality of institutions are both key determinants of cross-country variations in dollarization. Dollarization is likely to promote financial deepening only in a high inflation environment. Financial instability is likely higher in dollarized economies. The authors discuss the implications of these findings for financial sector and monetary policies.

Author : Ms.Anne Marie Gulde
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4.44/5 ( download)

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Download or read book Financial Stability in Dollarized Economies written by Ms.Anne Marie Gulde and published by International Monetary Fund. This book was released on 2004-06-15 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: The process of dollarization can take multiple forms, including when a country adopts the US dollar either as its predominant currency, or establishes a bicurrency system with the local currency. This publication examines how to establish an adequate supervisory and crisis management framework in dollarized economies, particularly when central banks and regulators may be constrained in the use of standard monetary and financial policy tools. It is based on a paper produced by the IMF Executive Board, as part of the policy development work conducted by the IMFs Monetary and Financial Systems Department.

Author :
Publisher :
ISBN 13 :
Total Pages : 22 pages
Book Rating : 4.50/5 ( download)

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Download or read book Dollarization, Financial Intermediation and Real Activity written by and published by . This book was released on 2005 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Mr.Gianni De Nicolo
Publisher : International Monetary Fund
ISBN 13 : 1451856660
Total Pages : 45 pages
Book Rating : 4.68/5 ( download)

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Download or read book Dollarization of the Banking System written by Mr.Gianni De Nicolo and published by International Monetary Fund. This book was released on 2003-07-01 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper assesses the benefits and risks associated with dollarization of the banking system. We provide novel empirical evidence on the determinants of dollarization, its role in promoting financial development, and on whether dollarization is associated with financial instability. We find that: (a) the credibility of macroeconomic policy and the quality of institutions are both key determinants of cross-country variations in dollarization; (b) dollarization is likely to promote financial deepening only in a high inflation environment; and (c) financial instability is likely higher in dollarized economies. The implications of these findings for financial sector and monetary policies are discussed.

Author : Mr.Luis Catão
Publisher : INTERNATIONAL MONETARY FUND
ISBN 13 : 9781451856637
Total Pages : 37 pages
Book Rating : 4.36/5 ( download)

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Download or read book Determinants of Dollarization written by Mr.Luis Catão and published by INTERNATIONAL MONETARY FUND. This book was released on 2000-08-01 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dollarization in financial intermediation has exhibited a widely diverse pattern across countries. Empirical work relating it to macroeconomic variables has had only limited success in explaining the phenomenon. This paper presents a two-currency banking model to show that deposit and loan dollarization are determined by a broader set of factors. These include interest rates and exchange rate risk, as well as structural factors related to costly banking, credit market imperfections, and availability of tradable collateral. The direction in which dollarization tends to move with macroeconomic shocks is shown to depend on those factors as well as on initial dollarization levels.

Author : Mr.Geoffrey J Bannister
Publisher : International Monetary Fund
ISBN 13 : 1484373367
Total Pages : 39 pages
Book Rating : 4.61/5 ( download)

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Download or read book Dollarization and Financial Development written by Mr.Geoffrey J Bannister and published by International Monetary Fund. This book was released on 2018-09-11 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Despite significant strides in financial development over the past decades, financial dollarization, as reflected in elevated shares of foreign currency deposits and credit in the banking system, remains common in developing economies. We study the impact of financial dollarization, differentiating across foreign currency deposits and credit on financial depth, access and efficiency for a large sample of emerging market and developing countries over the past two decades. Panel regressions estimated using system GMM show that deposit dollarization has a negative impact on financial deepening on average. This negative impact is dampened in cases with past periods of high inflation. There is also some evidence that dollarization hampers financial efficiency. The results suggest that policy efforts to reduce dollarization can spur faster and safer financial development.

Author : Alina C. Luca
Publisher :
ISBN 13 :
Total Pages : 352 pages
Book Rating : 4.64/5 ( download)

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Download or read book Financial Dollarization in Emerging Market and Transition Economies written by Alina C. Luca and published by . This book was released on 2003 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Author : Carlos Óscar Arteta
Publisher :
ISBN 13 :
Total Pages : 382 pages
Book Rating : 4.77/5 ( download)

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Download or read book Dollarization of Banking, Financial Stability and Financial Liberalization written by Carlos Óscar Arteta and published by . This book was released on 2002 with total page 382 pages. Available in PDF, EPUB and Kindle. Book excerpt: