The Nexus of Financial Inclusion and Financial Stability

Policy makers and regulators have devoted much effort to reforms aimed at improving financial stability in response to lessons from the 2007-09 crisis. At the same time, much effort has also been directed to promoting greater financial inclusion as an enabler of equal opportunity. To some extent, these endeavors have been exerted in silos, neglecting the possibility that financial inclusion and financial stability could be significantly intertwined, positively or negatively. If there are synergies or trade-offs between inclusion and stability, policy decisions must be informed, and the policy setting, design, and implementation adjusted accordingly. This paper (i) discusses the relationship between financial inclusion and stability, (ii) illustrates empirically interactions between the two financial sector outcomes, and (iii) outlines policy challenges stemming from these interactions.

Bibliographic Details

Main Authors:	Cihak, Martin, Mare, Davide S., Melecky, Martin
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2016-06
Subjects:	MONETARY POLICY, WITHDRAWAL, DEPOSIT, CAPITAL MARKETS, FINANCIAL SERVICES, REGULATORY FRAMEWORK, MARGINAL TAX RATES, BORROWER, CREDIT CARDS, DEPOSITS, CUSTOMER, URBANIZATION, BANK FOR INTERNATIONAL SETTLEMENTS, CALCULATION, FINANCIAL DEEPENING, PRINCIPAL, INCOME, INTEREST, LIFE INSURANCE, LAWS, CONTRIBUTION, FINANCIAL LITERACY, WORTH, INTEREST RATE, BANKING SYSTEM, INCOME GROUP, SVERIGES RIKSBANK, STRATEGIES, PURCHASES, BANKING SERVICES, INFORMATION, SERVICES, BANK ACCOUNT, PUBLIC SERVICES, BANKING SYSTEMS, WORKING AGE POPULATION, MORTGAGE, WELFARE, LOAN, BIS, PROJECTS, PROBABILITY OF DEFAULT, BORROWERS, REGRESSION ANALYSES, OWNERSHIP, CREDIT CARD, SAVING, CENTRAL BANKS, PROVISION OF CREDIT, LENDER, SAFETY NETS, FINANCIAL POLICY, BANK LENDING, LITERACY, KNOWLEDGE, PUBLIC POLICY, SAVINGS, MORTGAGES, LOW-INCOME GROUPS, FINANCIAL INSTITUTION, LOW FINANCIAL LITERACY, LIFE INSURANCE POLICY, WAGE, CONSUMER CREDIT, RECENT LOAN, PROBABILITY, PRECAUTIONARY SAVINGS, CHECKING, EXTERNALITIES, FINANCIAL INSTITUTIONS, MARKETS, FINANCIAL CUSTOMERS, FOREIGN CAPITAL FLOWS, FINANCIAL CRISES, LOAN APPLICATION, LEGISLATION, COMMERCIAL BANK LOANS, BUSINESS CYCLE, LOANS, LABOR, FINANCIAL OUTCOME, ENTERPRISES, INVESTMENT OPPORTUNITIES, FINANCIAL SYSTEM, TRANSMISSION OF MONETARY POLICY, INSURANCE POLICY, DEBIT CARDS, RETURN ON ASSETS, FINANCE, TAXES, BANKING SECTOR, SAVINGS ACCOUNT, BANKS, INVESTMENT DECISIONS, EMERGING MARKETS, BANKRUPTCY LAWS, EQUITY, SOCIAL SAFETY NETS, SYSTEMIC RISK, CONSUMER, CAPITAL, FINANCIAL STABILITY, FINANCIAL POLICIES, BANK FAILURES, FINANCIAL CRISIS, CREDIT ACCESS, VALUE, FINANCIAL EXCLUSION, BANK, SYSTEMIC BANKING CRISES, CREDIT, DEMAND, ISLAMIC BANKING, WORKING CAPITAL, REPAYMENT, CAPITAL FLOWS, MANDATES, TAX RATES, DIVERSIFIED PORTFOLIOS, ANALYTICAL APPROACH, LOW-INCOME, EIB, FINANCIAL SERVICE, DIVERSIFICATION, REGRESSION ANALYSIS, HOUSEHOLD SAVINGS, CREDIT RISK, GOVERNANCE, INSURANCE, ACCESS TO CREDIT, MICROFINANCE, ECONOMIC DEVELOPMENT, FINANCIAL OUTCOMES, LOW INCOME, LAND, EDUCATION, FINANCIAL MARKET, INVESTMENT, FINANCIAL INTERMEDIATION, RISK, FINANCIAL INTERMEDIARIES, WITHDRAWAL RATE, COMMERCIAL BANKS, DOMESTIC CREDIT, SUPPLY, RISK MEASUREMENT, BANKING, INVESTMENTS, BORROWING, RISK MANAGEMENT, LENDING, DEBIT CARD, BASIC FINANCIAL SERVICES, BANKING SUPERVISION, WITHDRAWAL RATES, CUSTOMERS, BANK NEGARA MALAYSIA, PROFITS, BANKING CRISES, LABOR MARKETS, FINANCIAL SYSTEMS, LIABILITIES, FINANCIAL SECTOR, GOVERNMENTS, LIQUID ASSETS, WORKING AGE, SECONDARY EDUCATION, DEVELOPMENT BANK, NONPERFORMING LOANS, FINANCIAL DEPTH, GOVERNMENT INTERVENTION, INCOME GROUPS,
Online Access:	http://documents.worldbank.org/curated/en/2016/06/26511052/nexus-financial-inclusion-financial-stability-study-trade-offs-synergies https://hdl.handle.net/10986/24639
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