Figure 2.15. Indicators of Financial Sector Supervision
and Development1
( t = 0 is year of transition; scale 0 to 3 with 3 representing strongest
supervision and development)
Voluntary transitions on average had better quality bank supervision than their
respective control groups in the period before the transition.
Quality of Bank Supervision
3
Peg-Intermediate
Voluntary
Maximum
2
Mean
1
3
2
Mean
Maximum
0
3
Peg-Intermediate
Crisis-Driven
Minimum
-2
Pegs
Minimum
tt = 0
-1
+1
Pegs
+2
-2
-1
Intermediate–Free Float
Voluntary
tt = 0
+1
+2
Intermediate–Free Float
Crisis-Driven
Maximum
2
Intermediates
Mean
0
3
Maximum
2
1
Mean
Minimum
1
1
Intermediates
0
Minimum
-2
-1
tt = 0
+1
+2
-2
-1
tt = 0
+1
+2
0
Securities Market Development
3
Peg-Intermediate
Voluntary
Pegs
2
3
Peg-Intermediate
Crisis-Driven
Maximum
Mean
Maximum
2
Pegs
Minimum
1
Minimum
1
Mean
0
3
-2
-1
tt = 0
+1
+2
-2
-1
tt = 0
+1
+2
Intermediate–Free Float
Crisis-Driven
Intermediate–Free Float
Voluntary
0
3
Maximum
Mean
Maximum
Mean
2
2
Intermediates
Intermediates
Minimum
1
0
1
Minimum
-2
-1
tt = 0
+1
+2
-2
-1
tt = 0
+1
+2
0
Sources: Abiad and Mody (2003); and IMF staff calculations; see Appendix 2.2 for variable
definitions.
1The pegs/intermediates control groups are averages for the countries whose exchange
rate regime is the same as the starting regime of transitioning countries in periods that are
not within three years of a transition. Only countries with observations for all periods shown
around the time of transition are included.