Financial liberalization and monetary control in a developing country (Peru).

摘要

This dissertation focuses on the interplay and effects of dollarization and a restrictive monetary policy during the Peruvian financial liberalization experience between 1990 and 2000. Banking crises are frequently attributed to lax regulation or supervision. Prior to the 1998 banking crisis, the Peruvian regulatory environment had been praised as strict. I single out the increased reliance of the banking system on foreign credit to fund its operations as the most important source of systemic vulnerability. This was a consequence of central bank's reliance on the foreign exchange market to regulate the money base, as well as on certificates of deposit to sterilize any surplus liquidity. At the same time, it established high reserve requirements on foreign currency deposits, with one important exemption: credits from foreign depository institutions. Dollarization can be both stabilizing, by reducing the likelihood of runs on the banking system and softening domestic currency credit crunches, and destabilizing, through the effects of liability dollarization in the productive sector.; During the post-liberalization period, the data indicated a negative response of growth to changes in a financial liberalization score. Dollarization appeared to have a positive impact in the short run, possibly related to a liquidity effect. The results showed a negative short run reaction of investment efficiency to innovations in the ex ante real exchange rate, and in dollarization. Finally, the data appears to indicate changes in response patterns of the different variables across the pre-hyperinflation and post-liberalization periods. A second broad topic addressed was whether volatility in capital inflows had increased relative to the pre-liberalization period, which could have impacted the banking system. The results do not show an increase in the volatility of aggregate capital inflows or short-term capital flows; foreign direct investment, on the contrary, was more volatile.; Regarding the non financial sector, the evidence indicated, first, that firms were financially weak due in the post-liberalization period, facing the consequences of high interest rates and trade liberalization (with low effective protection due to a low real exchange rate). Also, it was documented that the problems in the non-financial sector pre-date the credit crunch created by the Russian default.