Mexico’s financial risks and the policies being adopted by the new administration cannot be adequately assessed without recognizing key features that characterize certain initial conditions.
The report considers three different channels through which Basel III can affect financial stability and development in EMDEs: (1) effects on the volume, composition, and stability of capital flows arising from the implementation of Basel III in advanced economies; (2) effects on financial stability and a level playing field from the adoption of the Basel framework by the home countries of affiliates of foreign banks operating in EMDEs; and (3) effects on financial stability, broad access to financial services, and deepening of local financial systems from the implementation of Basel III by EMDEs themselves.
A CGD Task Force assessed the implications of Basel III for EMDEs and provided recommendations for both international and local policymakers to make Basel III work for these economies. This brief summarizes the key findings and recommendations.
An Index of Regulatory Practices for Financial Inclusion in Latin America: Enablers, Promoters, and Preventers - Working Paper 468
This paper constructs an index of regulatory quality for improving financial inclusion for the purpose of assessing and comparing the quality of rules and regulations in a sample of eight Latin American countries.
In spite of recent progress in the usage of alternative financial services by adult populations, Latin America’s financial inclusion gaps have not reduced, relatively to comparable countries, and, in some cases, have even increased during the period 2011-2014. Institutional weaknesses play the most salient role through direct and indirect effects. Lack of enforcement of the rule of law directly reduces depositors’ incentives to entrust their funds to formal financial institutions. Indirectly, low institutional quality reinforces the adverse effects of insufficient bank competition on financial inclusion.
Drawing from existing domestic experiences and the first results of the international debate, this paper tries to identify some high-level recommendations on how the payments system should be regulated to best achieve the particular goal of inclusion.