Download or read book A Confidence-Financial Inclusion Nexus in the Caucasus and Central Asia? written by Mr. Kalin I Tintchev and published by International Monetary Fund. This book was released on 2024-12-20 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: We document novel evidence that confidence in macrofinancial stability has a positive impact on financial inclusion in CCA countries and more broadly. This channel is particularly important for CCA countries, with confidence gains of 1 unit leading to 0.7 unit improvement in financial inclusion. Institutional factors such as level of governance and reliance on transparent policy rules and robust financial safety nets explain a large fraction of the variability in confidence in the region. We find that governance reforms are critical for deepening financial inclusion while the impact of inflation targeting, fiscal rules and deposit insurance schemes is positive and material only when governance levels exceed certain thresholds.