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We are grateful for suggestions received from colleagues during an African Department seminar. We also thank African Department desk officers for their help in putting together the database on financial sector liberalization on which the analysis in the paper is based.
For example, there are still interest rate controls in countries belonging to the Central Africa Economic and Monetary Community (CEMAC).
As shown in the far right two columns, these ratios are consistent with an apparent improvement between 1990–99 and 2000–04, as reported in Gulde, Pattillo, and Christensen (2006).
During the discussion of a preliminary version of this paper in an IMF African Department seminar, it was suggested that low credit growth in the 1990s could have been the outcome of the aggressive intensification of supervision that followed previous periods of regulatory weakness. If this point were confirmed, it would be necessary to reassess the optimal combination of prudential requirements and credit growth to support economic activity. Credit might also have been reduced because of the write-off of bad loans originating in direct lending to selected sectors or given by banks with extensive state participation.
Since an index of financial liberalization was available only for 1987 and 1997, the data points were chosen around those dates. The early to mid-1980s can also be seen as prereform years; the mid-1990s correspond with a period of rapid financial sector liberalization in SSA. The last period, the early 2000s, is generally considered the one in which most SSA countries made substantial progress in stabilizing their economies.
For both effective creditor rights indices we used a linear combination of equal weights.
The six pieces of information are: (i) Both positive and negative credit information (for example on payment history, number and kinds of accounts, number and frequency of payments and any collections or bankruptcies) are distributed. (ii) Data on both firms and individuals are distributed. (iii) Data from retailers, trade creditors, or utilities as well as financial institutions are distributed. (iv) More than two years of historical data are distributed. (v) Data on all loans above 1 percent of income per capita are distributed. (vi) By law, borrowers have the right to access their data.
The exception is the Corruption Perception Index, available annually since 1997.