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questions :financial liberalization
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[Visitor (112.21.*.*)]answers [Chinese ]Time :2022-01-26
They rigorously demonstrated the positive relationship between financial deepening and savings, employment and economic growth, profoundly pointed out the harm of "financial repression", believed that the economic underdevelopment of developing countries was due to the existence of financial repression, and therefore advocated that developing countries should achieve financial deepening and promote economic growth in the form of financial liberalization. Financial liberalization is aimed at financial suppression of this phenomenon, reducing government intervention, and establishing the basic role of market mechanisms.
Financial liberalization, also known as "financial deepening," is a symmetry of "financial repression." The theory of financial liberalization advocates reforming the financial system, reforming the excessive government intervention in finance, relaxing restrictions on financial institutions and financial markets, enhancing domestic financing functions to change excessive dependence on foreign capital, and relaxing the control of interest rates and exchange rates to make them market-oriented, so that interest rates can reflect the supply and demand of funds, and the exchange rate can reflect the supply and demand of foreign exchange, promote the improvement of domestic savings rates, and ultimately achieve the purpose of curbing inflation and stimulating economic growth.

The main aspects of financial liberalization – liberalization of interest rates, joint ventures, liberalization of business scope, freedom of access to financial institutions, free movement of capital – have the potential to trigger financial vulnerabilities.

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