Bank for International Settlements

The assessment of economic development across countries remains a key global concern. Development is a multidimensional concept encompassing economic growth, inequality, financial stability, and the overall prosperity of the real sector. Financial development (FD) contributes significantly to financial inclusion (FI), resource allocation efficiency, investment growth, and economic resilience. This study utilises the International Monetary Fund (IMF)’s FD Index to compare FD among BRICS nations and six other major Asian economies. The cross-country analysis shows that, as of 2021, India ranked lowest among the BRICS countries and mid-tier among the Asian economies studied. Despite improvements over past decades, India’s relatively low FD score is primarily attributed to inefficiencies and limited access within its financial institutions (FIs). The findings suggest a need for targeted regulatory measures in India to enhance financial efficiency, strengthen monitoring mechanisms, enforce regulations impartially, and increase transparency within the financial system.

ABSTRACT We analyse how ageing populations might affect the stability of banking systems through changes in the balance sheets and risk preferences of banks over the period 2000–2022. While the anticipated decline in maturity transformation due to ageing hints at a possible reduction in risk exposure, an older population may propel banks towards yield-seeking behaviours, offsetting the diminishing prominence of conventional lending operations. Through a comprehensive examination of advanced economies over the past two decades, our findings reveal a general enhancement in bank stability correlating with the ageing of populations. However, the adaptive responses of banks to these demographic changes are potentially introducing tail risks. Given the rapid global shift towards ageing societies, our analysis highlights the critical need for policymakers to be proactive and vigilant. This is particularly pertinent considering historical precedents where periods of relative stability have often been harbingers of emerging risks.