Deposit Dollarization and the Financial Sector in Emerging Economies
Analyzing new data, the authors find that the general trend toward increased use of foreign-currency-denominated bank deposits in emerging markets has continued, despite declines in a few countries. Their analysis of the new data suggests that a si...
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okr-10986-194092021-04-23T14:03:42Z Deposit Dollarization and the Financial Sector in Emerging Economies Honohan, Patrick Shi, Anqing BANK LENDING BANKING SYSTEM BANKNOTES BANKS BORROWING CD CENTRAL BANK COMPETITIVENESS CONSUMER PRICE INDEX COUNTRY REPORTS COUNTRY RISK CREDIT RISK CURRENCY ASSETS CURRENCY BOARD CURRENCY RISK DEBT DEPOSIT ACCOUNTS DEPOSIT DOLLARIZATION DEPOSIT INTEREST DEPOSIT INTEREST RATES DEVALUATION DEVELOPING COUNTRIES DOLLAR DEPOSITS DOMESTIC CURRENCY DOMESTIC INFLATION EMERGING ECONOMIES EMERGING MARKETS EXCHANGE CONTROL EXCHANGE CONTROLS EXCHANGE RATE EXCHANGE RATE DEPRECIATION EXCHANGE RATE RISK EXCHANGE RATES EXPECTED RETURN FINANCIAL GLOBALIZATION FINANCIAL MARKETS FINANCIAL SECTOR FOREIGN ASSETS FOREIGN CURRENCY FOREIGN CURRENCY DEPOSITS FOREIGN EXCHANGE GOVERNMENT DEBT HIGH INFLATION IMPERFECT COMPETITION INDUSTRIAL COUNTRIES INFLATION INFLATION TAX INFLATIONARY POLICIES INTEREST RATE INTEREST RATES INTERNATIONAL FINANCIAL STATISTICS LEGISLATION LOAN MARKETS LOCAL BANKS LOCAL BORROWERS LOCAL CURRENCY M2 MACRO POLICY MACROECONOMIC POLICY MONEY MARKET MONEY SUPPLY NET FOREIGN ASSETS NOMINAL DEPRECIATION NOMINAL DEVALUATION NOMINAL EXCHANGE RATE POLICY CREDIBILITY POLICY RESEARCH PORTFOLIO PRIVATE SECTOR PROFITABILITY RATE OF EXCHANGE REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REGRESSION ANALYSIS RISK PREMIUM STANDARD DEVIATION WAGES WHOLESALE PRICES Analyzing new data, the authors find that the general trend toward increased use of foreign-currency-denominated bank deposits in emerging markets has continued, despite declines in a few countries. Their analysis of the new data suggests that a sizable fraction (about half, on average) of funds switched to dollar deposit accounts are effectively exported through the banking system, thereby reducing the supply of credit. Moreover, increases in deposit dollarization are associated with increases in offshore deposits, which probably helps to explain the authors' finding that dollarization is associated with an increase in banking spreads. The authors' evidence supports, though only weakly, the conjecture that dollarization would tend to raise wholesale interest rates systematically through a peso premium. In contrast, greater dollarization is clearly associated with a higher pass-through coefficient from exchange rate change to consumer prices, potentially increasing nominal risk in the economy. 2014-08-19T15:22:11Z 2014-08-19T15:22:11Z 2001-12 http://documents.worldbank.org/curated/en/2001/12/1671256/deposit-dollarization-financial-sector-emerging-economies http://hdl.handle.net/10986/19409 English en_US Policy Research Working Paper;No. 2748 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
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institution_category |
Foreign Institution |
institution |
Digital Repositories |
building |
World Bank Open Knowledge Repository |
collection |
World Bank |
language |
English en_US |
topic |
BANK LENDING BANKING SYSTEM BANKNOTES BANKS BORROWING CD CENTRAL BANK COMPETITIVENESS CONSUMER PRICE INDEX COUNTRY REPORTS COUNTRY RISK CREDIT RISK CURRENCY ASSETS CURRENCY BOARD CURRENCY RISK DEBT DEPOSIT ACCOUNTS DEPOSIT DOLLARIZATION DEPOSIT INTEREST DEPOSIT INTEREST RATES DEVALUATION DEVELOPING COUNTRIES DOLLAR DEPOSITS DOMESTIC CURRENCY DOMESTIC INFLATION EMERGING ECONOMIES EMERGING MARKETS EXCHANGE CONTROL EXCHANGE CONTROLS EXCHANGE RATE EXCHANGE RATE DEPRECIATION EXCHANGE RATE RISK EXCHANGE RATES EXPECTED RETURN FINANCIAL GLOBALIZATION FINANCIAL MARKETS FINANCIAL SECTOR FOREIGN ASSETS FOREIGN CURRENCY FOREIGN CURRENCY DEPOSITS FOREIGN EXCHANGE GOVERNMENT DEBT HIGH INFLATION IMPERFECT COMPETITION INDUSTRIAL COUNTRIES INFLATION INFLATION TAX INFLATIONARY POLICIES INTEREST RATE INTEREST RATES INTERNATIONAL FINANCIAL STATISTICS LEGISLATION LOAN MARKETS LOCAL BANKS LOCAL BORROWERS LOCAL CURRENCY M2 MACRO POLICY MACROECONOMIC POLICY MONEY MARKET MONEY SUPPLY NET FOREIGN ASSETS NOMINAL DEPRECIATION NOMINAL DEVALUATION NOMINAL EXCHANGE RATE POLICY CREDIBILITY POLICY RESEARCH PORTFOLIO PRIVATE SECTOR PROFITABILITY RATE OF EXCHANGE REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REGRESSION ANALYSIS RISK PREMIUM STANDARD DEVIATION WAGES WHOLESALE PRICES |
spellingShingle |
BANK LENDING BANKING SYSTEM BANKNOTES BANKS BORROWING CD CENTRAL BANK COMPETITIVENESS CONSUMER PRICE INDEX COUNTRY REPORTS COUNTRY RISK CREDIT RISK CURRENCY ASSETS CURRENCY BOARD CURRENCY RISK DEBT DEPOSIT ACCOUNTS DEPOSIT DOLLARIZATION DEPOSIT INTEREST DEPOSIT INTEREST RATES DEVALUATION DEVELOPING COUNTRIES DOLLAR DEPOSITS DOMESTIC CURRENCY DOMESTIC INFLATION EMERGING ECONOMIES EMERGING MARKETS EXCHANGE CONTROL EXCHANGE CONTROLS EXCHANGE RATE EXCHANGE RATE DEPRECIATION EXCHANGE RATE RISK EXCHANGE RATES EXPECTED RETURN FINANCIAL GLOBALIZATION FINANCIAL MARKETS FINANCIAL SECTOR FOREIGN ASSETS FOREIGN CURRENCY FOREIGN CURRENCY DEPOSITS FOREIGN EXCHANGE GOVERNMENT DEBT HIGH INFLATION IMPERFECT COMPETITION INDUSTRIAL COUNTRIES INFLATION INFLATION TAX INFLATIONARY POLICIES INTEREST RATE INTEREST RATES INTERNATIONAL FINANCIAL STATISTICS LEGISLATION LOAN MARKETS LOCAL BANKS LOCAL BORROWERS LOCAL CURRENCY M2 MACRO POLICY MACROECONOMIC POLICY MONEY MARKET MONEY SUPPLY NET FOREIGN ASSETS NOMINAL DEPRECIATION NOMINAL DEVALUATION NOMINAL EXCHANGE RATE POLICY CREDIBILITY POLICY RESEARCH PORTFOLIO PRIVATE SECTOR PROFITABILITY RATE OF EXCHANGE REAL EXCHANGE REAL EXCHANGE RATE REAL EXCHANGE RATES REAL INTEREST REAL INTEREST RATE REAL INTEREST RATES REGRESSION ANALYSIS RISK PREMIUM STANDARD DEVIATION WAGES WHOLESALE PRICES Honohan, Patrick Shi, Anqing Deposit Dollarization and the Financial Sector in Emerging Economies |
relation |
Policy Research Working Paper;No. 2748 |
description |
Analyzing new data, the authors find
that the general trend toward increased use of
foreign-currency-denominated bank deposits in emerging
markets has continued, despite declines in a few countries.
Their analysis of the new data suggests that a sizable
fraction (about half, on average) of funds switched to
dollar deposit accounts are effectively exported through the
banking system, thereby reducing the supply of credit.
Moreover, increases in deposit dollarization are associated
with increases in offshore deposits, which probably helps to
explain the authors' finding that dollarization is
associated with an increase in banking spreads. The
authors' evidence supports, though only weakly, the
conjecture that dollarization would tend to raise wholesale
interest rates systematically through a peso premium. In
contrast, greater dollarization is clearly associated with a
higher pass-through coefficient from exchange rate change to
consumer prices, potentially increasing nominal risk in the economy. |
format |
Publications & Research :: Policy Research Working Paper |
author |
Honohan, Patrick Shi, Anqing |
author_facet |
Honohan, Patrick Shi, Anqing |
author_sort |
Honohan, Patrick |
title |
Deposit Dollarization and the Financial Sector in Emerging Economies |
title_short |
Deposit Dollarization and the Financial Sector in Emerging Economies |
title_full |
Deposit Dollarization and the Financial Sector in Emerging Economies |
title_fullStr |
Deposit Dollarization and the Financial Sector in Emerging Economies |
title_full_unstemmed |
Deposit Dollarization and the Financial Sector in Emerging Economies |
title_sort |
deposit dollarization and the financial sector in emerging economies |
publisher |
World Bank, Washington, DC |
publishDate |
2014 |
url |
http://documents.worldbank.org/curated/en/2001/12/1671256/deposit-dollarization-financial-sector-emerging-economies http://hdl.handle.net/10986/19409 |
_version_ |
1764439791483486208 |