Financial Services Liberalisation in Transition Countries and the Role of the WTO

Abstract

While a bulk of economic theoretical and empirical research deals with various aspects of financial liberalisation, there is far less research devoted to the measurement of financial liberalisation. In this paper we calculate an index of financial liberalisation in 18 transition countries in the Central, Eastern and South-East Europe (CESE) and the Commonwealth of Independent States (CIS). This index was previously developed in works of Aaditya Mattoo (1999) to measure financial liberalisation that the WTO member countries have committed to. We make a slight modification to scaling to take into account the specific aspects of CESE and CIS countries and also apply the index to a non- WTO member (Serbia) using its currently applied regime. In this paper we will examine the influence of the General Agreement on Trade in Services (GATS) framework on liberalisation commitments in financial services sector in the target countries.

Key words: Financial services, Financial liberalisation, Transition, WTO.
JEL: G15, G21, G22, G28.