Abstract
We construct a global financial inclusion index using data from the World Bank, IMF, and V-Lab and propose an inverted U-shaped relationship between financial inclusion and financial stability. The empirical evidence supports our hypotheses, and the impact of financial inclusion on financial stability is less prominent under strong regulation and supervision. In addition, we use our constructed financial inclusion index, capital adequacy ratio, market power, and macroeconomic variables to simulate and predict the financial crisis. Our research has important policy implications and provides valuable insights to financial regulatory authorities in making decisions related to financial inclusion and financial stability.
Original language | English |
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Pages (from-to) | 167-178 |
Number of pages | 12 |
Journal | China Economic Quarterly International |
Volume | 3 |
Issue number | 3 |
DOIs | |
Publication status | Published - Sept 2023 |
Keywords
- Financial inclusion
- Financial stability
- Systemic risk
ASJC Scopus subject areas
- Geography, Planning and Development
- General Economics,Econometrics and Finance
- Sociology and Political Science
- Social Sciences (miscellaneous)