01718cas a2200241 a 4500 AALejournalIMF020501 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498340663 2663-3493 BD-DhAAL BD-DhAAL International Monetary Fund. Enhancing Financial Sector Surveillance in Low-Income Countries : Background Paper. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (105 pages) Policy Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This note provides an overview of the literature on the challenges posed by shallow financial systems for macroeconomic policy implementation. Countries with shallow markets are more likely to choose fixed exchange rates, less likely to use indirect measures as instruments of monetary policy, and to implement effective counter-cyclical fiscal policies. But causation appears to work in both directions, as policy stances can themselves affect financial development. Drawing on recent FSAP reports, the note also shows that shallow financial markets tend to increase foreign exchange, liquidity management, and concentration risks, posing risks for financial stabilitya. Mode of access: Internet Policy Papers; Policy Paper ; No. 2012/025 Full text available on IMF http://elibrary.imf.org/view/journals/007/2012/025/007.2012.issue-025-en.xml IMF e-Library