Investopedia

Continue to Site »

Financial Repression

Filed Under » , ,
Dictionary Says

Definition of 'Financial Repression'

A term that describes measures by which governments channel funds to themselves as a form of debt reduction. This concept was introduced in 1973 by Stanford economists Edward S. Shaw and Ronald I. McKinnon. Financial repression can include such measures as directed lending to the government, caps on interest rates, regulation of capital movement between countries and a tighter association between government and banks. The term was initially used in response to the emerging market financial systems during the 1960s, '70s and '80s.
Investopedia Says

Investopedia explains 'Financial Repression'

In 2011, economists Carmen M. Reinhart and M. Belen Sbrancia hypothesized in a National Bureau of Economic Research (NBER) working paper entitled "The Liquidation of Government Debt" that governments could return to financial repression to deal with debt following the 2008 economic crisis. Reinhart and Sbrancia indicate that financial repression features:

    Caps or ceilings on interest rates
    Government ownership or control of domestic banks and financial institutions
    Creation or maintenance of a captive domestic market for government debt
    Restrictions on entry to the financial industry
    Directing credit to certain industries

Articles Of Interest

  1.

    Will Corporate Debt Drag Your Stock Down?

    Borrowed funds can mean a leg up for companies, or the boot for investors. Find out how to tell the difference.

  2. An Overview Of Corporate Bankruptcy

    If a company files for bankruptcy, stockholders have the most to lose. Find out why.

  3. Subprime Is Often Subpar

    Proceed with caution when considering these short-term, high-interest mortgages.

  4. Lessons Learned From the Banking Crisis

    There are lessons to be learned on how to handle severe financial downturns, and while the Fed is learning, politicians may not be.

  5. Austerity: When The Government Tightens Its Belt

    When a government tightens its belt in tough economic times the entire nation feels the squeeze.

  6. Inspecting A Country's Debt

    Tensions over just how to handle debt are pitting the rich world against the developing world like never before.

  7. Other Options For The Cyprus Bailout

    Find out the other options Cyprus could use to resolve it's financial troubles, since its proposal to tax bank deposits didn't work out.

  8. The Cyprus Crisis 101

    Discover what's behind the Cyprus debacle and what investors should do about the situation.

  9. Build Your Small Business During Downswings

    Here we offer some cost-saving measures to strengthen your business even when the market is weak.

  10. Here We Go Again: The Debt Ceiling

    The debt ceiling debate could, once again, negatively impact the nation's credit rating.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  2. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  3. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  4. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  5. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  6. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.
Trading Center
Array ( )
taggroups(for debug only):
Array ( [0] => Economy And Economics [1] => Investing [3] => Markets )