GATS Financial Services Liberalization : How Do OECD Members Schedules Impact Commercial Banking FDI?

Though the GATS targets market failures which affect the global provision of financial services (FS), it is far from offering optimal results. Part of the reason rests on the complex architecture of the agreement that allows for a considerable degree of variability in the level and progress of liberalization on a country-by-country basis via the country schedules of commitments.Despite the need for an assessment on the degree of financial services liberalization in WTO member countries, the literature on the topic is scant. This resides in the difficulty of identifying comparable parameters of liberalization, and in trying to observe the de facto level of liberalization, which may divert considerably from the guaranteed level of market access and national treatmetn (NT) inscribed in the GATS country schedules of commitments. The present paper seeks to contribute to the literature on financial services liberalization, with an analysis of the scheduled commitments and most-favored nation (MFN) exemptions undertaken by 30 of the 34 OECD members. This qualitative evaluation hopes to offer insights of the liberalization effect on commercial banking FDI, by highlighting how entry, establishment and competition of foreign banks is determined through market access and NT limitations under the GATS framework