Interest Rate Repression Around the World
Financial repression resurfaced in the wake of the global financial crisis and may become a common feature in the post Coronavirus 2019 (COVID-19) world. To advance knowledge and inform policy advice, this paper presents a new database on interest...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/841621602741042770/Interest-Rate-Repression-Around-the-World http://hdl.handle.net/10986/34672 |
| Summary: | Financial repression resurfaced in the
wake of the global financial crisis and may become a common
feature in the post Coronavirus 2019 (COVID-19) world. To
advance knowledge and inform policy advice, this paper
presents a new database on interest rate controls, a popular
form of financial repression, based on a survey with 108
countries representing 88 percent of global gross domestic
product (GDP). The data cover such aspects of interest rate
controls as types of controls, legal basis, intended
objectives, methodologies, and enforcement rules. In an
attempt to provide a meaningful characterization of the
data, this paper also provides a preliminarily estimate of
the degree of bindingness of the interest rate control
regime in a country and presents simple correlations with
other financial repression policies. The paper finally
discusses general principles of an interest rate management
policy that can minimize adverse side effects of binding
controls while laying down the basis for a smooth transition
or return to market determined interest rates. |
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