Journal of Emerging Trends in Economics and Management Sciences: Home

Abstract:
In the last century, mostly countries promote the sustainable financial development for enhancing economic growth through lowering the governmental inventions in financial sector. This paper portrays the impact of financial deepening on positive and negative perspectives however it may severely affect developing economies as compared to developed economies. Although financial deepening provides many positive outcomes to economies like enhancing the hiding costs, efficiency of transforming savings into investments, heightening the official governmental policies through deregulating credits, strengthening restrains interest rate, price mechanisms as well as improving market competition; but sometimes excess financial deepening may leads to negative outcomes like restraining the financial markets to be efficient, reducing the profit margin and increased financial fragility of banks and may create financial crises if excessive risks is taken in presence of increased competition. It provides recommendations for eliminating its effects and enhances the sustainable development,in both developed and developing economies.

Keywords: financial deepening, financial crises, economic growth, sustainable development, policy reforms

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