Do independence and transparency matter for bank development? A new lookup on emerging and developing countries

Emna Trabelsi

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Abstract: A well-developed banking sector is crucial to achieve a sustained economic growth. To attain this goal, both central banks and government have embraced operational and institutional arrangements. In this paper, we offer an empirical lookup on how monetary independence and transparency of macroprudential and fiscal policies are linked to bank development. Drawing upon a panel dataset of emerging and developing economies over the period 1998-2014, we find that both macroprudential transparency and fiscal transparency are positively related to the share of credit granted by banks to the private sector, implying that more transparent policies enhance bank development. The impact can be disentangled into direct and indirect effects through reasonable channels. More independence from central banks seems, however, to not affect the ratio of bank credit to GDP but its matters for the ratio of liquid assets.

Keywords: central bank independence; macroprudential transparency; fiscal transparency; dynamic panel; bank development; mediation (search for similar items in EconPapers)
Date: 2019-04-26
New Economics Papers: this item is included in nep-cba, nep-fdg and nep-mac
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Published in 5èmes Journées Economiques et Financières Appliquées, Apr 2019, Mahdia, Tunisia

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02162780

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