The exchange rate regime is a key consideration. In recent decades, developing economies have experienced increasing capital mobility and financial integration into the global economy.
Yet, an expansion of the financial sectors along other dimensions such as increased mortgage finance has no discernible long-run effect on real sector outcomes (Beck, Büyükkarabacak, Rioja, and Valev 2012). Many of the factors that affect the growth-finance nexus are structural. Shocks hitting the system can aggravate their effects.