2003 Reviews

An Exploration of GATS for Developing Countries: Impact of Financial Services on Financial System Stability

Bakhshi, Alveena; Averyasha, Nataliya; Loomba, Sonal; Nnadi, Sylvester

This premise of this research is that trade policies vis a vis. GATS current modes has not provided 'fair access' to developing countries and the costs far outweigh the benefits. The trade policies for financial services per GATS are an important factor for countries to progress and develop but such policies are often neglected due to the weak relationship between financial services trade liberalization and macroeconomic indicators in developing countries. The research statistically evaluates whether a relationship exists between a developing country's commitment to openness in trade in financial services and its financial stability indicators. The results prove a strong relationship exists with FDI but not with other modes. We further deliberate upon the need for sequencing financial services trade liberalization to avoid incidence of financial crises.