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Trade in Financial Services and Capital Movements
Author:
Ms. Natalia T. Tamirisa
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Series:
IMF Working Papers
Volume/Issue:
Volume 1999: Issue 089
Language:
English
Publication Date:
01 Jul 1999
DOI:
https://doi.org/10.5089/9781451851267.001
ISBN:
9781451851267
ISSN:
1018-5941
Pages:
22
Keywords:
WP; financial service; capital flow; liberalization; capital; financial service supplier; market equilibrium; trade in financial services; capital mobility; financial service service sector; net capital flow; saving-investment imbalance; capital constraint; A. capital movement; market discipline; market participant; saving-investment gap; Capital flows; Trade in services; Capital controls; Capital inflows
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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International financial liberalization may alter saving-investment imbalances and patterns of capital flows across countries. In a panel of OECD countries for 1990–96, this study examines how the liberalization of capital movements and financial services trade affects net private capital flows. Capital inflows tend to fall (rise) with the liberalization of commercial presence in banking and securities (insurance) services, possibly reflecting an increase (decrease) in saving. Capital account liberalization is found to stimulate capital inflows, suggesting that better access to external financing helps sustain larger fiscal and current account deficits. When cross-border trade is liberalized, capital flows change insignificantly.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund