Historia Del Hombre

Financial Freedom
Financial freedom is a measure of banking efficiency as well as a measure of independence from government control and interference in the financial sector. State ownership of banksand other financial institutions such as insurers and capital markets reduces competition and generally lowers the level of available services.
In an ideal banking and financing environment where aminimum level of government interference exists, independent central bank supervision and regulation of financial institutions are limited to enforcing contractual obligations and preventing fraud.Credit is allocated on market terms, and the government does not own financial institutions. Financial institutions provide various types of financial services to individuals and companies. Banks are freeto extend credit, accept deposits, and conduct operations in foreign currencies. Foreign financial institutions operate freely and are treated the same as domestic institutions.
The Index scores aneconomy’s financial freedom by looking into the following five broad areas:
* The extent of government regulation of financial services,
* The degree of state intervention in banks and otherfinancial firms through direct and indirect ownership,
* The extent of financial and capital market development,
* Government influence on the allocation of credit, and
* Openness to foreigncompetition.
These five areas are considered to assess an economy’s overall level of financial freedom that ensures easy and effective access to financing opportunities for people and businesses in theeconomy. An overall score on a scale of 0 to 100 is given to an economy’s financial freedom through deductions from the ideal score of 100.
* 100—Negligible government interference.
* 90—Minimalgovernment interference. Regulation of financial institutions is minimal but may extend beyond enforcing contractual obligations and preventing fraud.
* 80—Nominal government interference....