The paper uses a unique survey of remittance-receiving individuals from Tajikistan to study the impact of policy awareness on consumer behavior. The results show that knowledge of deposit insurance encourages the use of formal channels for transmitting remittances and reduces dollarization. Given the size and importance of remittances in Tajikistan, improving financial literacy and better publicizing details of the social safety net may encourage a more frequent use of formal channels for transferring remittances and reduce reliance on foreign exchange for transaction purposes. This is likely to improve bank profitability, enhance financial stability, and improve access to finance.
sufficiently credible to help avoid even individual bank runs (e.g., the case of Northern Rock in UK in 2007). As we will see in Section II , lack of awareness of DI may be behind some of these outcomes.
Practitioners have long emphasized the importance of public’s knowledge about DI. As stated by IADI (2009) , “public awareness of deposit insurance—its existence and how it works—plays a significant role in underpinning a sounddepositinsurancesystem.” In fact, public awareness is one of the Core Principles for Effective Deposit Insurance Systems ( BIS, 2009 ). So
-branch network and a sounddeposit-insurancesystem, helps ensure a solid deposit base and a retail market for other bank liabilities. In addition, most other financial services (i.e. asset-management and insurance) are also channeled via banks’ networks. Profits are more stable, which, perhaps, supports safer business strategies. Indeed, even throughout the financial turbulence, and unlike many of their peers, Italian banks managed to sustain a steady pace of income and deposit growth.
Low (until recently) contestability of the system , combined with still high net interest
This paper is the fifth in a series that examines macroeconomic developments and prospects in low-income developing countries (LIDCs). LIDCs are a group of 59 IMF member countries primarily defined by income per capita below a threshold level. LIDCs contain one fifth of the world’s population—1.5 billion people—but account for only 4 percent of global output. The first chapter of the paper discusses recent macroeconomic developments and trends across LIDCs and, using growth decompositions, explores the key drivers of growth performance in LIDCs. A second chapter examines the challenges faced by LIDCs in implementing a value-added tax system, generally seen as a key component of a strong national tax system. The third chapter discusses how financial safety nets can be appropriately tailored to the specific needs of LIDCs, recognizing that an effective safety net is important for ensuring financial stability and underpinning public confidence in the financial system, thereby promoting financial intermediation.
Italy’s 2008 Article IV Consultation describes the country's economic developments and policies. Output has been projected to contract by about ½ percent in 2008 and 1 percent in 2009, with risks tilted to the downside, linked to a further slowing of global growth and falling consumer confidence. The economy’s ability to rebound quickly is hampered by rigidities in the product and labor markets, a lack of domestic competition, a likely slower pace of industrial restructuring, and weakness of the public finances.