Contractual Savings in Countries with a Small Financial Sector

30 Pages Posted: 20 Apr 2016

See all articles by Dimitri Vittas

Dimitri Vittas

World Bank - Financial Sector Development

Gregorio Impavido

International Monetary Fund (IMF); World Bank

Alberto R. Musalem

World Bank

Date Written: May 7, 2002

Abstract

Countries with small financial systems are generally small economies with a reduced dimension of institutional relationships, a greater concentration of wealth, and a relatively less independent civil service. These characteristics facilitate concentration of functions and, more generally, weak governance. Only small economies with a relatively high level of per capita income, minimum core of sound banks and insurance companies, sound and credible macroeconomic policies, and open capital accounts can benefit from the development of contractual savings. This can increase the options to obtain sound coverage against contingencies, increase the supply of long term savings, promote financial deepening, and improve financial risk management.

This paper - a product of the Financial Sector Development Department - is part of a larger effort in the department to study the effects of contractual savings on financial markets.

Suggested Citation

Vittas, Dimitri and Impavido, Gregorio and Musalem, Alberto R., Contractual Savings in Countries with a Small Financial Sector (May 7, 2002). World Bank Policy Research Working Paper No. 2841. Available at SSRN: https://ssrn.com/abstract=636189

Dimitri Vittas (Contact Author)

World Bank - Financial Sector Development ( email )

Washington, DC 20433
United States

HOME PAGE: http://www.worldbank.org/wbi/banking/insurance/contractual/vittas.html

Gregorio Impavido

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

HOME PAGE: http://www.imf.org

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Alberto R. Musalem

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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