According to the World Bank Global Financial Inclusion (Global Findex) database (2011), 2.5 billion adults (about half of the world’s adult population) have no access to financial services delivered by regulated financial institutions. While account penetration is nearly universal in high-income nations, it is only 41 percent in developing countries. This paper contributes to the discussion about the enablers and barriers to responsible financial inclusion by assessing to what extent differences in the adoption of post-crisis global regulatory standards can explain cross-country variation in financial inclusion. Some of the questions this paper sets out to answer include if implementation of global regulatory standards hampered financial inclusion or helped it and if national regulators in developing countries have been able to apply international regulatory recommendations in a proportionate manner. Using the 2011 Global Findex database, two original indices of financial inclusion for 90 developing and emerging economies were constructed in order to benchmark countries’ performance in this dimension. These indices were then used as the dependent variables in cross-country regression analyses, evaluating the impact of various aspects of global regulatory standards.
Financial Inclusion and Global Regulatory Standards: An Empirical Study across Developing Economies
New Thinking and the New G20 Paper No. 7