THE DETERMINANTS OF FINANCIAL DEVELOPMENT: INSTITUTIONS, OPENNESS AND FINANCIAL LIBERALISATION

This paper provides new evidence that sheds light on the influence of institutional quality, trade openness and financial liberalisation on financial market development, using data from 27 economies (the G-7, Europe, East Asia and Latin America) during 1980-2001. The dynamic panel data analysis results demonstrate that real income per capita and institutional quality are statistically significant determinants of banking sector development and capital market development. The trade openness, however, is more prominent in promoting capital market development. In terms of financial liberalisation, the empirical results suggest that domestic financial sector reforms tend to promote banking sector development, whereas stock market liberalisation is potent in delivering stock market development. Nevertheless, the financial liberalisation programmes are more responsive in developed economies.     

REVIEW OF THE FINANCIAL AND ECONOMIC SITUATION IN SOUTH AFRICA*

I have pleasure in formally presenting to you the Final Accounts of the Bank, and the Reports of the Board and the Auditors, for the year ended 31st March 1969. I also submit to you the Bank's Annual Economic Report which describes in some detail the economic and monetary developments in South Africa during the year ended June 1969 and which in general serves as a background to my remarks today. As is customary, however, I will survey these developments very briefly before discussing the present situation and the prospects for the near future.     

FINANCIAL INTEGRATION IN THE COMMON MONETARY AREA*

This paper assesses the level of financial integration within the CMA countries, using the concept of the uncovered interest rate parity. The impact of foreign interest rates on the domestic interest rates, in this case the South African rates on the rates of the LNS countries, is analysed. For comparative purposes, other neighbouring countries such as Botswana, Zambia and Zimbabwe are brought into the analysis. The results from the uncovered interest rate parity approach show that Lesotho, Namibia and Swaziland can be considered to be well financially integrated with the South African market, while for Botswana, Zambia and Zimbabwe it shows the contrary.     

TRADE LIBERALISATION IN SOUTH AFRICA ONCE AGAIN

This paper attempts to reconcile and extend the debate in South Africa as to whether trade was liberalised in the nineties. The core studies in the debate are examined with a view to effecting their reconciliation. In particular the limitations of effective rates of protection as reflective of the stance of trade policy are explained and suggestions made for their use by policymakers. The paper concludes by suggesting that reliance on a single indicator such as effective rates of protection should be avoided.