2004年-世界发展银行全球_Deposit_Dollarization___Whats_Happening_What_Can_Be_Done__4页_171kb

Deposit Dollarization: What’s Happening, What Can Be Done?

Core Content

Deposit dollarization refers to the increasing proportion of bank deposits denominated in foreign currencies, primarily the U.S. dollar. This trend has been observed globally, particularly in Latin America, but has also spread to other regions such as South America, transition economies, the Middle East, Africa, and East Asia. In contrast, the Caribbean, Central America, and industrial countries have seen relatively low and stable levels of deposit dollarization.

The phenomenon is driven by several factors, including policy-induced uncertainty, the desire for a better risk-return tradeoff, and the perceived stability of the U.S. dollar. Deposit dollarization is often accompanied by loan dollarization, as banks hedge against exchange rate risks by lending in foreign currency or investing in foreign securities. However, this practice can lead to macroeconomic risks, especially when the local currency is weak or subject to devaluation.

Main Points

• Global Trends: Over the past decade, deposit dollarization has increased by about 1 percentage point annually. In 25 countries, more than half of bank deposits are in foreign currency.
• Regional Variations: Dollarization has risen most sharply in South America and transition economies. It has increased more moderately in the Middle East, Africa, and East Asia, while remaining low in the Caribbean, Central America, and industrial countries.
• Macro and Institutional Factors: Dollarization is not strongly associated with increased financial depth, except in high-inflation economies. It can moderate the adverse effects of inflation on financial depth.
• Policy Influence: While some governments consider dollarization irreversible, recent studies show that policy does matter. Good macroeconomic and institutional policies can help contain or even reverse the trend.
• Risks in Dollarized Systems: Dollarization is linked to higher risk in the banking system, as measured by nonperforming loans, deposit volatility, and "distance to default" indicators.
• Policy Responses: Governments have generally chosen to allow dollarization to persist, as it facilitates financial intermediation. However, this can lead to a "fear of floating" and moral hazard, where the private sector assumes that the government will bail out dollar depositors and borrowers.
• Alternative Solutions: One possible solution is the use of price-indexed deposits, which can help reduce the risks associated with currency mismatches. Another is the adoption of a dual currency regime, which allows the use of foreign currency while retaining some flexibility in exchange rates.

Key Information

• Empirical Evidence: Studies show that the pass-through of exchange rate movements to domestic prices is higher in dollarized systems, suggesting that the U.S. dollar may act as an inflation hedge.
• Policy Challenges: Monetary authorities face the challenge of balancing the benefits of dollarization with the risks it introduces. Attempting to prevent dollarization through rigid exchange rate regimes may lead to instability and capital flight.
• Credibility and Risk: Credible macroeconomic and institutional policies are essential to reduce the appeal of dollar deposits. Financial intermediaries in dollarized systems tend to be more prone to risk.
• Recommendations: Authorities should focus on improving the credibility of their monetary policies, addressing the risk environment through prudential measures, and exploring alternative instruments such as indexed deposits.

Conclusion

Dollarization is not a substitute for strong macroeconomic and institutional policies. While it may offer short-term benefits in terms of financial intermediation and perceived stability, it can also introduce significant risks. Therefore, governments should not seek to outlaw dollarization but instead work to restore confidence in their local currencies and implement effective prudential policies to manage the risks associated with currency mismatches.