Abstract
The financial system, both domestic and international, is undergoing rapid, complex and fundamental transformation. A very important transformation, which is enormously controversial as well, is financial liberalization. The process has created uncertainties and confusion amongst policy makers and raised important issues that need to be better understood and resolved. Some of these issues are summarised below as an introduction to the debate about financial liberalization.
International financial integration, financial globalization, financial capital market regulation, financial crisis and international financial contagion, and the issues of financial liberalization/financial repression are some of the important contemporary topics in the field of international finance and development economics. Issues more specific to financial liberalization debate are financial repression, capital control, risk management, moral hazard, asymmetric information, financial instability and systemic risk and dysfunctionalities in the financial system (Hansanti, Islam and Sheehan, 2008; Stiglitz, 1994).
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- 1.
It could be said that exchange rate regime is not necessarily directly linked to capital mobility, although it is much harder to fix rates with high mobility.
- 2.
However, as noted by Nissanke and Aryeetey (1998), this sample excludes West Africa where most of the countries are Francophone members and have close financial and monetary policies with France and between themselves.
- 3.
Additionally, while these countries can provide sufficient data for our analysis, the derived policy implications are generalisable since they represent markets that have different degrees of development.
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Ahmed, A.D., Islam, S.M.N. (2010). Introduction. In: Financial Liberalization in Developing Countries. Contributions to Economics. Physica, Heidelberg. https://doi.org/10.1007/978-3-7908-2168-0_1
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