Financial Policies and the Prevention of Financial Crises in Emerging Market Economies

Mishkin, Frederic S.

World Bank, Washington, DC

关键词: ACCOUNTING;    ADVERSE SELECTION;    ASSET PRICES;    ASYMMETRIC INFORMATION;    BALANCE OF PAYMENTS;   

DOI  :  10.1596/1813-9450-2683
RP-ID  :  WPS2683

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The author defines a financial crisis asa disruption in financial markets in which adverse selectionand moral hazard problems become much worse, so thatfinancial markets are unable to efficiently channel funds tothose who have the most productive investment opportunities.As financial markets become unable to function efficiently,economic activity sharply contracts. Factors that promotefinancial crises include, mainly, a deterioration infinancial sector balance sheets, increases in interest ratesand in uncertainty, and deterioration in nonfinancialbalance sheets because of changes in asset prices. Financialpolicies in 12 areas could help make financial crises lesslikely in emerging market economies, says the author. Hediscusses: Prudential supervision. Accounting and disclosurerequirements. Legal and judicial systems. Market-baseddiscipline. Entry of foreign banks. Capital controls.Reduction of the role of state-owned financial institutions.Restrictions on foreign-dominated debt. The elimination oftoo-big-to-fail practices in the corporate sector. Theproper sequencing of financial liberalization. Monetarypolicy and price stability. Exchange rate regimes andforeign exchange reserves. If the political will to adoptsound policies in these areas grows in emerging marketeconomies, their financial systems should become healthier,with substantial gains both from greater economic growth andsmaller economic fluctuations.