search query: @indexterm FINANCIAL INTERMEDIARIES / total: 113
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| Author: | Rother, P. C. |
| Title: | Explaining the Behavior of Financial Intermediation |
| Journal: | Russian and East European Finance and Trade
2001 : MAY-JUN, VOL. 37:3, p. 77-105 |
| Index terms: | FINANCIAL INTERMEDIARIES THEORIES PRIVATE SECTOR FINANCE MACROECONOMICS |
| Language: | eng |
| Abstract: | This paper provides a theoretical analysis of the factors driving financial intermediation, introducing two new measures of intermediation: the money multiplier, and the ratio of private sector credit to monetary base. Based on a comprehensive collection of macroeconomic and financial sector data for 19 transition economies, the paper then assesses the relative importance of the various factors. The results provide evidence that the share of bad loans in bank portfolios, the concentration in the banking sector, and expected inflation are significant variables that may prevent deep financial intermediation. On the other hand, past inflation experience, bank capital adequacy ratios, and the level of minimum reserve requirements are found to be of less statistical significance. |
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