An Assessment of Financial Reform in OECD Countries [E-Book] / Malcolm Edey and Ketil Hviding
Edey, Malcolm.
Hviding, Ketil.
Paris : OECD Publishing, 1995
71 p. ; 21 x 29.7cm.
OECD Economics Department Working Papers ; 154
Full Text
This paper reviews the experience with financial reform in OECD countries. A general overview of the course of deregulation is provided and the economic rationale for financial regulation is discussed. The question of whether financial liberalisation has led to improved welfare is then addressed. It is argued that the benefits of improved allocation of resources and increased efficiency have to be weighed against the possible effects of deregulation on financial stability. While there is no strong evidence of any trend increase in financial volatility in key markets, there have been a number of episodes of instability apparently linked to financial deregulation. However, the analysis of individual crises suggests that inappropriate macroeconomic policies, deficiencies in prudential policies, and microeconomic distortions affecting incentives in the financial sector, were important contributing factors to the financial problems that have been experienced ...