:: Volume 6, Issue 2 (Winter 2012) ::
J. Mon. Ec. 2012, 6(2): 35-49 Back to browse issues page
Banking Sector Policies and Financial Development: The Case of Iran
Anoshirvan Taghipour *
Abstract:   (2860 Views)

In this paper we empirically examine the effect of various banking policies on financial sector development. To this end, an econometric model in the context of Co-integrated VAR is employed. The results show that financial liberalization and reforms have a significant and positive effect on the banking sector development while inflation rate has a negative effect. Furthermore, the high GDP per capita as a measure of economic development has a positive effect on financial development indicating that the more developed the economy, the more incentive for policy makers to implement financial reforms and thus develop financial sector. This finding is consistent with demand following view.

However, since the current structure of Iranian banking system is not competitive, in order to implement financial liberalization policy, the policy makers should be careful and consider some prudential regulations, supervision and other macroeconomic conditions.

JEL: E44, E51, E52, E58, G28 

Keywords: financial liberalization, financial reform, bank, co-integrated vector autoregressive
Full-Text [PDF 450 kb]   (940 Downloads)    
Type of Study: Research | Subject: Monetary Economics
Received: 2014/05/3 | Accepted: 2014/05/3 | Published: 2014/05/3

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Volume 6, Issue 2 (Winter 2012) Back to browse issues page