Financial inclusion and financial stability nexus: are they synergies or trade-offs
The recent financial crisis has shown that financial innovation can have devastating systemic impacts on financial stability, an example of the sub-prime crisis in the United States. International financial standards and national regulators’ response have been a global concerted effort to overhaul and tighten financial regulations. However, at a time of designing stricter regulations, it is crucial to avoid a backlash against expanding the financial access frontier with a compromise on the effectiveness of lending standards.