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Financial Sector Conditionality: Is Tougher Better?
Author:
Mr. Roger P. Kronenberg
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Alessandro Giustiniani
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Series:
IMF Working Papers
Volume/Issue:
Volume 2005: Issue 230
Language:
English
Publication Date:
01 Dec 2005
DOI:
https://doi.org/10.5089/9781451862492.001
ISBN:
9781451862492
ISSN:
1018-5941
Pages:
34
Keywords:
WP; banking sector; banking sector conditionality; country; IMF arrangement; process; reform strategy
Legal-disclaimer:
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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The aim of this paper is to take a closer look at IMF conditionality in the banking sector. Our analysis shows that while such conditionality became more stringent following the Asian crisis, compliance has remained broadly unchanged, comparing unfavorably with other structural reforms. The results of panel data regressions show that while compliance with IMF-supported banking sector reform strategies has contributed to an improvement in banking sector performance, increases in the hardness and intensity of IMF conditionality may not be, ceteris paribus, effective. The policy implication is that the IMF should, therefore, continue its efforts in enhancing countries' ownership and streamlining conditionality.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund