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Senior Fellow and Director of the Latin America Initiative
But while exciting new technologies for mobile money transfer deservedly make the headlines, there's a drier aspect of financial inclusion that doesn’t get as much attention: regulation. And it's no less important.
“There is no innovation that actually comes to life without the rules that determine how it’s going to operate,” CGD Senior Fellow Liliana Rojas-Suarez tells me in this week’s podcast.
Rojas-Suarez, along with Federal Reserve Board Senior Adviser Stijn Claessens, together chair CGD’s High Level Task Force on Regulatory Standards for Financial Inclusion. Their new report makes clear that the traditional priorities of financial regulation – safeguarding the stability and integrity of financial systems and protecting consumers from fraud – can be compatible with the goal of financial inclusion.
In fact, the two are complementary. “There is no way that you are going to get financial inclusion if you have an unstable financial system,” Rojas-Suarez says in the clip below.
"The more financial inclusion you have, that also contributes to stability, because you’re moving the funds that people are dealing with from the informal to the formal system.”
The world, as they say, is moving “beyond aid.” As true as that may be in aggregate, however, the trend doesn’t apply evenly across groups of countries. While fairly significant data gaps prevent a complete and unbiased picture, the available data show that ODA remains a comparatively prominent source of external financing for fragile states.