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CGD’s work in this area focuses on strengthening financial systems in development countries through innovation and regulation.
Greater access for the poor to the formal financial system—including payments, savings, credit, and insurance—can greatly improve household stability and development prospects. CGD examines how to strengthen, broaden, and deepen financial systems in developing countries through innovation and regulation. We also study the effects of financial crises, to avoid and mitigate future shocks, and how developing countries can improve their business climates to spur inward investment.
Distributed ledger technology, like Bitcoin’s blockchain, has the potential to transform cross-border payments, boost financial inclusion, and lessen the unintended consequences of anti-money laundering enforcement. Ripple, a fintech company using distributed ledger technology, made headlines recently, as did the appearance of a new cryptocurrency, Zcash. If you’ve gotten swept up in the enthusiasm around emerging financial technologies (fintech), you may think that the creaking system of international transfers in fiat currencies, and the problems of global financial exclusion associated with it, will soon come to an end. However, as we’ve said before, these innovations may not have as much of an impact as you expect.
In spite of recent progress in the usage of alternative financial services by adult populations, Latin America’s financial inclusion gaps have not reduced, relatively to comparable countries, and, in some cases, have even increased during the period 2011-2014. Institutional weaknesses play the most salient role through direct and indirect effects. Lack of enforcement of the rule of law directly reduces depositors’ incentives to entrust their funds to formal financial institutions. Indirectly, low institutional quality reinforces the adverse effects of insufficient bank competition on financial inclusion.
The Obama administration has taken some important steps to put women’s economic empowerment at the center of US foreign and development policy, but there’s still plenty of work left to do. Researchers and advocates alike have made the case for why gender equality—and specifically women’s economic empowerment—is critical for achieving economic growth, eradicating extreme poverty, and improving the health, education, and well-being of people worldwide. This blog post turns to concrete ways that the next US administration can promote women’s economic empowerment, thereby maximizing the impact of its development agenda.
Women’s economic empowerment is increasingly recognized as critical to achieving development outcomes around the world. Informed by a roundtable discussion at the Center for Global Development (CGD) and additional suggestions from CGD researchers, this four-point memo aims to issue practical proposals for the next US administration, particularly aimed at economically empowering women and girls worldwide, as a building block toward the full realization of broader gender equality and women’s agency and empowerment. The recommendations build on those in CGD’s The White House and the World briefing book, as well as the CGD policy memo “A US Law or Executive Order to Combat Gender Apartheid in Discriminatory Countries” and ongoing work at CGD focused on women’s financial inclusion.
CGD continued its commitment to the subject of financial inclusion with the release this March of Financial Regulations for Improving Financial Inclusion. As co-chairs of the Task Force that produced this report, we are enthused to see much alignment between the High-Level Principles of the G20 and the CGD Task Force report.
Keeping in mind the low levels of financial inclusion in the country, the Indian authorities have developed a broad strategy to improve access to financial services, as outlined in the report by the Committee on Comprehensive Financial Services for Small Business and Low Income Households, led by Nachiket Mor. Among the committee’s recommendations, payments banks are one innovative tool to further India’s goal of greater financial inclusion.
Five thousand researchers, practitioners, advocates and others are descending on Copenhagen for Women Deliver, the largest conference focused on the health, rights, and well-being of women and girls. Much of what will be discussed aligns with CGD’s own work through our global health policy and gender and development programs, so we’re pleased to be attending and below, we’re pleased to share with you a few of the conference areas where we can add our voice.
Does broadening financial access to large segments of the population pose risks to financial stability? Not necessarily, according to recent remarks by IMF managing director Christine Lagarde. Increasing access to basic financial transactions such as payments does not threaten financial stability, especially when appropriate supervisory and regulatory frameworks are in place. In fact, with the right regulatory supervision, increased access to financial services can result in both micro and macro benefits. Recognizing the macroeconomic and regulatory dimensions of financial inclusion, CGD and the IMF joined forces for a seminar to kick off the IMF Spring Meetings 2016.