IMF paper finds standard risk metrics perform poorly with low financial depth
‘Excess credit’ may be better early-warning indicator for low income countries
Credit-to-GDP ratios are a useful mechanism for providing early warnings of financial instability, but this only holds for countries with relatively deep financial markets, according to a working paper published today (August 13) by the International Monetary Fund.
Systemic risk assessment in low income countries, by Daniela Marchettini and Rodolfo Maino, points out most of the financial stability debate to date has focused on advanced economies and the larger emerging markets. For studying
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