Publication: Dollarization of the Banking System : Good or Bad?
Date
2003-08
ISSN
Published
2003-08
Author(s)
Abstract
De Nicol� Honohan, and Ize assess the
benefits and risks associated with dollarization of the
banking system. The authors provide novel empirical evidence
on the determinants of dollarization, its role in promoting
financial development, and on whether dollarization is
associated with financial instability. They find that: The
credibility of macroeconomic policy and the quality of
institutions are both key determinants of cross-country
variations in dollarization. Dollarization is likely to
promote financial deepening only in a high inflation
environment. Financial instability is likely higher in
dollarized economies. The authors discuss the implications
of these findings for financial sector and monetary policies.
Citation
“De Nicolo, Gianni; Honohan, Patrick; Ize, Alain. 2003. Dollarization of the Banking System : Good or Bad?. Policy Research Working Paper;No. 3116. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/18133 License: CC BY 3.0 IGO.”
Report Series
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