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Benchmarking Financial Systems : Introducing the Financial Possibility Frontier

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  • Erik Feyen
  • Thorsten Beck

Abstract

Across the world, supply for financial services rarely matches the demand, given multiple market frictions. This paper discusses the concept of the financial possibilities frontier as a constrained optimum to categorize different problems of shallow financial markets or unsustainable expansion. The paper offers three examples of how to use different data sources to apply the frontier concept to assess the state of financial systems.
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  • Erik Feyen & Thorsten Beck, 2013. "Benchmarking Financial Systems : Introducing the Financial Possibility Frontier," World Bank Publications - Reports 16319, The World Bank Group.
    • Handle: RePEc:wbk:wboper:16319
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    13. Thorsten Beck & Augusto De La Torre, 2007. "The Basic Analytics of Access to Financial Services," Financial Markets, Institutions & Instruments, John Wiley & Sons, vol. 16(2), pages 79-117, May.
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    17. Augusto de la Torre & Erik Feyen & Alain Ize, 2013. "Financial Development: Structure and Dynamics," The World Bank Economic Review, World Bank, vol. 27(3), pages 514-541.
    18. Demirgüç-Kunt, Asli & Detragiache, Enrica, 2005. "Cross-Country Empirical Studies of Systemic Bank Distress: A Survey," National Institute Economic Review, National Institute of Economic and Social Research, vol. 192, pages 68-83, April.
    19. Aghion, Philippe & Bacchetta, Philippe & Rancière, Romain & Rogoff, Kenneth, 2009. "Exchange rate volatility and productivity growth: The role of financial development," Journal of Monetary Economics, Elsevier, vol. 56(4), pages 494-513, May.
    20. Mariassunta Giannetti & Steven Ongena, 2009. "Financial Integration and Firm Performance: Evidence from Foreign Bank Entry in Emerging Markets," Review of Finance, European Finance Association, vol. 13(2), pages 181-223.
    21. Thorsten Beck, 2013. "Finance, growth and fragility: the role of government," International Journal of Banking, Accounting and Finance, Inderscience Enterprises Ltd, vol. 5(1/2), pages 49-77.
    22. Mr. Adolfo Barajas & Thorsten Beck & Ms. Era Dabla-Norris & Mr. Seyed Reza Yousefi, 2013. "Too Cold, Too Hot, or Just Right? Assessing Financial Sector Development Across the Globe," IMF Working Papers 2013/081, International Monetary Fund.
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    Cited by:

    1. Kumar Debasis Dutta & Mallika Saha, 2023. "Role of governance in the nexus between financial development and sustainable development," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(6), pages 1181-1215, August.
    2. Martin Melecky & Samuel Munzele Maimbo & Martin Melecky, 2014. "Financial Sector Policy in Practice : Benchmarking Financial Sector Strategies around the World," World Bank Publications - Reports 16832, The World Bank Group.
    3. Albuquerque de Sousa, J.A. & Beck, T. & van Bergeijk, P.A.G. & van Dijk, M.A., 2016. "Nascent markets: Understanding the success and failure of new stock markets," ISS Working Papers - General Series 623, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    4. Thorsten Beck, 2013. "Finance, growth and fragility: the role of government," International Journal of Banking, Accounting and Finance, Inderscience Enterprises Ltd, vol. 5(1/2), pages 49-77.
    5. Emmanuel Carré & Guillaume L’œillet, 2018. "The Literature on the Finance–Growth Nexus in the Aftermath of the Financial Crisis: A Review," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(1), pages 161-180, March.
    6. Thorsten Beck & Meghana Ayyagari, 2015. "Financial Inclusion in Asia: An Overview," Working Papers id:7393, eSocialSciences.
    7. CRISTE, Adina, 2019. "Ways Of Involving Central Bank In Supporting Economic Growth," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 23(4), pages 86-99, December.
    8. Kumar Debasis Dutta & Mallika Saha, 2023. "Does financial development cause sustainable development? A PVAR approach," Economic Change and Restructuring, Springer, vol. 56(2), pages 879-917, April.
    9. Muhammad Shahbaz & Muhammad A. Nasir & Amine Lahiani, 2022. "Role of financial development in economic growth in the light of asymmetric effects and financial efficiency," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 361-383, January.
    10. Thorsten Beck, 2014. "Ireland's Banking System - Looking Forward," The Economic and Social Review, Economic and Social Studies, vol. 45(1), pages 113-134.
    11. Nguyen, Yen Ngoc & Brown, Kym & Skully, Michael, 2019. "Impact of finance on growth: Does it vary with development levels or cyclical conditions?," Journal of Policy Modeling, Elsevier, vol. 41(6), pages 1195-1209.
    12. Margaret R. Magwedere & Joseph Chisasa & Godfrey Marozva, 2022. "Examining the Causal Relationship between Financial Intermediation and Poverty in Selected Developing Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 12(1), pages 75-84.
    13. World Bank, 2016. "Democratic Republic of São Tome and Príncipe," World Bank Publications - Reports 25684, The World Bank Group.
    14. Martin Melecky & Samuel Munzele Maimbo & Martin Melecky, 2014. "Financial Sector Policy in Practice : Benchmarking Financial Sector Strategies around the World," World Bank Publications - Reports 16832, The World Bank Group.
    15. Emmanuel Carré & Guillaume L’Œillet, 2017. "Une revue de la littérature récente sur le nexus finance-croissance après la crise : apports, limites et pistes de recherche," Revue d'économie financière, Association d'économie financière, vol. 0(3), pages 271-290.
    16. Michael Fuchs & Thorsten Beck & Dorothe Singer & Makaio Witte, 2014. "Making Cross-Border Banking Work for Africa," World Bank Publications - Books, The World Bank Group, number 20248.
    17. Raja Almarzoqi & Sami Ben Naceur & Akshay Kotak, 2015. "What Matters for Financial Development and Stability?," IMF Working Papers 2015/173, International Monetary Fund.

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