2003年-世界发展银行全球_Banking_in_Developing_Countries_in_the_1990s_40页_420kb

Summary of "Banking in Developing Countries in the 1990s"

Core Content

This paper by James A. Hanson examines the evolution of banking systems in 25 large developing and transition countries between 1990 and 2000, focusing on resource mobilization and resource allocation. It also explores the impact of globalization, financial liberalization, and financial crises on the banking sector during the 1990s.

Main Views and Key Information

I. Introduction

• The 1990s saw significant changes in developing countries' financial systems, including financial liberalization, capital account opening, and increased use of foreign currency loans and deposits.
• Central banks shifted focus from development financing to anti-inflationary policies and became more independent.
• Financial crises, particularly in Mexico, East Asia, Russia, and Brazil, played a critical role in shaping the banking landscape.
• The paper analyzes the performance of banking systems in terms of their ability to mobilize and allocate resources, and the implications of these developments for economic growth and financial stability.

II. Resource Mobilization by Banks

A. Deposit Mobilization

• Bank deposits, including certificates of deposit and bonds, increased significantly from 34% of GDP in 1990 to 50% in 2000.
• The average ratio of deposits to GDP rose by about 4% per year between 1990 and 2000, and by 3% per year from 1993 to 2000.
• The growth was driven by:
  • A dramatic fall in inflation.
  • Financial liberalization, including interest rate liberalization and reduced directed credit.
  • Increased use of foreign currency deposits.
  • Expansion of financial instruments such as certificates of deposit and bonds.
  • Growth in financial intermediation and monetization.

B. Foreign Sources of Funding

• Despite globalization, the net foreign borrowing of banks in the 25 countries declined over the 1990s.
• By 2000, the average net foreign funding was slightly negative (-0.5% of GDP), indicating banks had more foreign assets than liabilities.
• Gross foreign liabilities increased slightly over the decade, but most countries saw a decline.
• Gross foreign assets increased, reflecting efforts to hedge risks and manage liquidity.
• The shift to market-based monetary policy reduced reliance on credit controls and reserve requirements, leading to more foreign liabilities and assets.

C. Bank Capital

• Bank capital increased in most countries, averaging about 9% of GDP by 2000.
• In 15 countries, capital grew faster than GDP.
• Capital increases were influenced by:
  • Implementation of Basel standards.
  • Market pressures for more capital.
  • The low risk weight assigned to government debt, which allowed banks to hold more government debt with less capital.
• Countries that experienced financial crises saw capital declines, likely due to increased government debt and reduced fiscal surpluses.

III. Resource Allocation by Banks

A. Central Bank Debt

• Banks' net holdings of central bank debt increased from 0.8% of GDP in 1990 to 4.6% in 2000.
• This growth was driven by:
  • Central banks moving away from developmental roles and toward anti-inflationary policies.
  • Use of central bank debt as a monetary policy instrument.
• The rise in central bank debt was associated with capital inflows and outflows, and central banks often used their debt to sterilize inflows or tighten money supply during outflows.
• Reduced reserve requirements contributed to the growth of central bank debt.

B. Bank Credit to Government and Crowding-out

• Bank credit to government more than doubled as a percentage of GDP from 1990 to 2000.
• The increase was primarily due to:
  • Post-crisis restructurings, especially in Brazil, Indonesia, and Mexico.
  • Rising government deficits.
• The ratio of net government credit to deposits increased from 12.9% in 1993 to 21.4% in 2000.
• The rise in government debt was partly due to:
  • Recapitalization of banks through government debt.
  • Development of government debt markets.
  • Low risk weights and increased liquidity of government debt.
• The crowding-out of private credit was a key concern, as government debt absorbed a large portion of loanable funds.

IV. Competition from On-shore and Off-shore Institutions and Markets

• Domestic non-bank financial intermediaries (NBFIs) played a small role in most countries, with notable exceptions being India, Malaysia, and Thailand.
• Their role declined sharply after 1997, likely due to financial crises and increased competition from banks.
• External finance (private-to-private international borrowing) grew relative to domestic bank credit in some countries, especially in the early 1990s.
• After 1997, net external finance through banks declined, reflecting reduced foreign lending and increased exposure to currency depreciation.
• Offshore banks reduced short-term credit lines and long-term lending, while domestic banks reduced their foreign exposure to mitigate devaluation risks.

V. Summary and Future Issues

• Despite financial liberalization, bank intermediation between depositors and private sector borrowers remained limited in many countries.
• The link between financial depth (M2/GDP) and economic growth weakened due to increased absorption of deposits into government and central bank debt.
• Key issues raised include:
  • The riskiness of bank portfolios.
  • Dependence on government solvency.
  • Access to credit for firms unable to access global markets.
  • Foreign exchange exposure and the implications of capital flow cycles.
  • Regulatory and supervisory changes and their long-term impacts.
• The post-crisis restructurings led to a quasi-fiscal deficit in central banks, as government debt became more attractive for banks due to its low risk weight and high liquidity.
• The crowding-out effect on private credit was more pronounced in countries with large recapitalization programs, as the poor performance of loans led to a need for continued government support.

Conclusion

The 1990s marked a period of significant transformation in developing country banking systems, driven by financial liberalization and globalization. However, the increased absorption of loanable funds into government and central bank debt, along with the decline in private sector credit, raised concerns about the effectiveness of financial intermediation and the long-term implications for economic growth and financial stability.