An apparent temporary narrowing of income inequality has been observed during several recent banking crises. But it would be a mistake to conclude that such crises don't matter for the poor. For one thing, the correlation is not strong, and the opposite pattern has also been present. Besides,...

Although the worldwide growth in dollarization of bank deposits has recently slowed, it has already reached very high levels in dozens of countries. Building on earlier findings that allowed the main cross-country variations in the share of dollars to be explained in terms of national policies...

Systematic information on household financial asset holdings in developing countries is very sparse. The author reviews some available data and current policy debates. Although financial asset holdings by households are highly concentrated, deeper financial systems are correlated with improved...

De Nicolo, Honohan, and Ize assess the benefits and risks associated with dollarization of the banking system. The authors provide novel empirical evidence on the determinants of dollarization, its role in promoting financial development, and on whether dollarization is associated with financial...

Enthusiasts for financial sector tax reform typically come either with some form of quot;flat taxquot; (including value added tax on financial services, zero taxation on capital income, or a universal transactions tax) or advocating corrective taxes designed to offset market failures or achieve...

Whether and when does banking serve to stabilize the economy? Caprio and Honohan view the banking system as a filter through which foreign and domestic shocks feed through to the domestic economy. The filter can dampen or amplify the shocks through various credit market channels, including...

An increasing share of bank deposits in developing countries is denominated in foreign currency. This trend may have adverse implications for the cost and availability of credit.Analyzing new data, Honohan and Shi find that the general trend toward increased use of foreign-currency-denominated...

Allowing banks to hold less capital against loans to borrowers who have received a favorable rating by an approved rating agency may result in a rating system that neither reveals risk information about borrowers nor protects the deposit insurance fund. Part of the problem is the very idea of...

As financial liberalization progressed, the general level of real interest rates increased more in developing countries than it did in industrial countries. Volatility in wholesale interest rates also jumped, often markedly, in most liberalizing countries. Treasury bill rates and bank spreads...