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Lessons for China from Financial Liberalization in Scandinavia

Chen, Hongyi; Jonung, Lars LU and Unteroberdoerster, Olaf (2014) In Asian Economic Papers 13(1). p.1-50
Abstract
This report identifies a set of policy lessons for China today drawn from the experience of financial deregulation, financial crisis, and recovery in Scandinavia during the period 1985-2000. Although there are considerable differences between the huge Chinese economy and the small Nordic countries, there are enough similarities to make lesson-drawing a worthwhile exercise. Based on the Scandinavian experience and the added complexity of China's status as a transition economy, financial reforms should strike a proper balance between being gradual (to avoid costly mistakes) and substantive (to secure efficiency gains in the longer term) with due consideration being given to initial conditions concerning regulation, taxes, and exchange rate... (More)
This report identifies a set of policy lessons for China today drawn from the experience of financial deregulation, financial crisis, and recovery in Scandinavia during the period 1985-2000. Although there are considerable differences between the huge Chinese economy and the small Nordic countries, there are enough similarities to make lesson-drawing a worthwhile exercise. Based on the Scandinavian experience and the added complexity of China's status as a transition economy, financial reforms should strike a proper balance between being gradual (to avoid costly mistakes) and substantive (to secure efficiency gains in the longer term) with due consideration being given to initial conditions concerning regulation, taxes, and exchange rate arrangements. A well-managed process of financial deregulation requires that policymakers and market participants fully understand the linkages between financial reforms and the rest of the economy. In addition, the supervisory and management systems in the financial sector should move in step with the liberalization process. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
in
Asian Economic Papers
volume
13
issue
1
pages
1 - 50
publisher
MIT Press
external identifiers
  • wos:000331416500001
  • scopus:84897637790
ISSN
1535-3516
DOI
10.1162/ASEP_a_00246
language
English
LU publication?
yes
id
8dc0e5b9-e563-438a-ae7b-def7d8e1c201 (old id 4367229)
date added to LUP
2014-04-16 13:44:00
date last changed
2017-07-23 03:10:38
@article{8dc0e5b9-e563-438a-ae7b-def7d8e1c201,
  abstract     = {This report identifies a set of policy lessons for China today drawn from the experience of financial deregulation, financial crisis, and recovery in Scandinavia during the period 1985-2000. Although there are considerable differences between the huge Chinese economy and the small Nordic countries, there are enough similarities to make lesson-drawing a worthwhile exercise. Based on the Scandinavian experience and the added complexity of China's status as a transition economy, financial reforms should strike a proper balance between being gradual (to avoid costly mistakes) and substantive (to secure efficiency gains in the longer term) with due consideration being given to initial conditions concerning regulation, taxes, and exchange rate arrangements. A well-managed process of financial deregulation requires that policymakers and market participants fully understand the linkages between financial reforms and the rest of the economy. In addition, the supervisory and management systems in the financial sector should move in step with the liberalization process.},
  author       = {Chen, Hongyi and Jonung, Lars and Unteroberdoerster, Olaf},
  issn         = {1535-3516},
  language     = {eng},
  number       = {1},
  pages        = {1--50},
  publisher    = {MIT Press},
  series       = {Asian Economic Papers},
  title        = {Lessons for China from Financial Liberalization in Scandinavia},
  url          = {http://dx.doi.org/10.1162/ASEP_a_00246},
  volume       = {13},
  year         = {2014},
}