Financial Inclusion and Stability : What Does Research Show?
A growing body of research suggests that whether broad-based access to formal financial services promotes financial stability depends on how that access is managed within the regulatory and supervisory framework, especially in terms of financial in...
| Main Authors: | , , |
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| Format: | Brief |
| Language: | English |
| Published: |
Washington, DC: World Bank
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/05/16542131/financial-inclusion-stability-research-show http://hdl.handle.net/10986/9443 |
| Summary: | A growing body of research suggests that
whether broad-based access to formal financial services
promotes financial stability depends on how that access is
managed within the regulatory and supervisory framework,
especially in terms of financial integrity and consumer
protection. Four factors come into play: financial
inclusion, financial consumer protection, financial
integrity, and financial stability. These factors are
inter-related and, under the right conditions, positively
related. Yet failings on one dimension are likely to lead to
problems on others. This brief explores what research to
date shows about the linkages and potential beneficial
relationships among these factors, and it identifies gaps
that remain to be explored. There is limited empirical work
exploring the specific linkages between financial inclusion
and financial stability. Studies have focused largely on the
impact of financial development on growth, income
inequality, and poverty reduction. The evidence strongly
indicates that, when effectively regulated and supervised,
financial development spurs economic growth, reduces income
inequality, and helps lift households out of poverty. |
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