The Nexus of Financial Inclusion and Financial Stability A Study of Trade-Offs and Synergies

Policy makers and regulators have devoted much effort to reforms aimed at improving financial stability in response to lessons from the 2007-09 crisis. At the same time, much effort has also been directed to promoting greater financial inclusion as an enabler of equal opportunity. To some extent, th...

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Bibliographic Details
Main Author: Cihak, Martin
Other Authors: Mare, Davide S., Melecky, Martin
Format: eBook
Language:English
Published: Washington, D.C The World Bank 2016
Series:World Bank E-Library Archive
Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
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520 |a Policy makers and regulators have devoted much effort to reforms aimed at improving financial stability in response to lessons from the 2007-09 crisis. At the same time, much effort has also been directed to promoting greater financial inclusion as an enabler of equal opportunity. To some extent, these endeavors have been exerted in silos, neglecting the possibility that financial inclusion and financial stability could be significantly intertwined, positively or negatively. If there are synergies or trade-offs between inclusion and stability, policy decisions must be informed, and the policy setting, design, and implementation adjusted accordingly. This paper (i) discusses the relationship between financial inclusion and stability, (ii) illustrates empirically interactions between the two financial sector outcomes, and (iii) outlines policy challenges stemming from these interactions