Financial Liberalization and Stability in Developing Countries

32 Pages Posted: 15 Feb 2006

Date Written: March 17, 1987


This paper discusses the recent experience with financial innovation and liberalization in developing countries. It is argued that successful adaptations to innovation and liberalization in industrial countries provide poor guidelines for a successful transition from the financially repressed systems often encountered in many developing countries. The analysis suggests that financial institutions in a developing country must be structured to operate in an inherently more difficult environment. Finally, the paper outlines the types of regulatory and supervisory policies that can help achieve such a structure.

JEL Classification: 1211, 3140, 3110

Suggested Citation

Mathieson, Donald J., Financial Liberalization and Stability in Developing Countries (March 17, 1987). IMF Working Paper No. 87/19, Available at SSRN:

Donald J. Mathieson

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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