Yasir Riaz is a PhD Finance Candidate at Lahore University of Management Sciences (LUMS), Pakistan. His research thesis focuses on the role of credit rating agencies in European financial markets. Previously, He has completed MPhil in finance from National University of Sciences and Technology (NUST), Pakistan and MBA from Quaid-i-Azam University (QAU), Pakistan. He has also taught courses on econometrics and finance at LUMS and PMAS Arid Agriculture University, Rawalpindi. He has been an Erasmus+ research scholar and worked at Middlesex University, England from October, 2017 to March, 2018.
This paper estimates the effect of financial liberalization on the financial instability. The sample for the study consists of annual data for 101 countries over the period of 1970 to 2014. It measures financial instability as the number of sovereign credit rating and outlook changes per annum. It uses random effects negative binomial technique to estimate the model. The results indicate a significant impact of financial liberalization on the number of rating and outlook changes per annum. Empirical findings highlight the importance of financial liberalization for financial instability and international market access.