The Impact of Financial Liberalization on the Stability of the Financial System in Emerging Markets

Abstract

Many of the reforms appeared and have touched the economic and financial sector, perhaps the most important is the financial liberalization policy that have emerged since the seventies, which aims to ease the degree of restrictions on the financial system in order to enhance the level of efficiency and reform entirely, by opening the financial and capital markets to foreign companies in the fields of banks and insurance and securities and investment firms and fund management and a large number of services. However, the financial liberalization hasty process and random may lead to violent crises and imbalances significant at the level of macro and micro economic, especially those relating to the stability of the financial system in emerging markets, and has become maintain the stability of the financial system at the local and international levels critical for countries in general a target, and the newly industrialized countries in the ways of growth in particular, and the aim of this study is to provide a conceptual theoretical framework of financial liberalization; identify the nature of the financial system and financial stability of emerging markets; and emphasize the importance of a balanced financial liberalization in maintaining the stability of the financial system in emerging financial markets.

DOI: 10.5901/mjss.2015.v6n6p22