financial stability can increase via contagion (Safavian and Zia, 2018; Alper et al., 2019). However, the existing literature usually refers to very severe forms of interest rate repression, often leading to negative real interest rates. In milder forms, i.e. when the rate of return to financial assets is still positive although lower than the market rate, the impact of interest rate repression on economic and financial development may not be very significant, other things being equal. IRCs were common in a group of rapidly growing economies in the 1980s, including Chile, China, Japan and the Republic of Korea (Zahid, 1995).

Interest rate liberalization is not unproblematic. While deregulation of interest rates advanced across much of the world during the period from the early 1980s to the years preceding the GFC (Abiad and Mody, 2005; Abiad et al., 2010), it proved to be a double-edged sword. In most cases interest rate liberalization led to higher real interest rates, shifted surplus from borrowers to savers, and expanded access to credit opportunities. For example, in India many small businesses gained access to credit after liberalization (Hanson, 2001). At the same time, interest rate volatility increased after deregulation, contributing to a rise in the probability of experiencing a banking crisis (Kaminsky and Reinhart, 1999; Demirguc-Kunt and Detragiache, 2005).<sup>5</sup> However, financial instability episodes occurred with a higher frequency in countries with weak prudential regulation and supervision (Noy, 2004; Angkinand et al., 2010) and underdeveloped institutional and market infrastructure (Pereira Leite and Sundarajan, 1990; Mehran et al., 1995; Feyzioglu et al., 2009), underlying the crucial importance of this set of preconditions for the pace and sequencing of deregulation. This is because interest rate liberalization is not only about price reform; it also needs to involve removing all sources of frictions while building key institutions.

To contribute to a better understanding of IRCs around the world, this paper presents a new data set based on a survey of World Bank Group members. A questionnaire was submitted to financial sector authorities and bankers’ associations in more than 150 jurisdictions during 2019 to investigate the legal framework associated with the implementation of _de jure_ IRCs, document their application, and provide details on their functioning. We received responses from 108 countries at all levels of income and in all parts of the world. In an attempt to provide a potentially meaningful characterization of a country’s interest rate control regime, the data collected through the survey are then used to attempt to provide a preliminary estimate of the degree of bindingness of IRCs in a country and explore whether the degree of bindingness of IRCs is associated with other forms of financial repression.

This paper builds on and extends recent efforts to take stock of IRCs around the world. There have been various attempts in recent years to classify IRCs internationally. However, existing studies either take a narrow geographical perspective, focusing on EMDEs (Helms and Reille, 2004) or advanced economies (see Reifner et al., 2010, for the EU; and Dasgupta and Mason, 2019, for the US), or, when taking a global perspective, they focus on lending interest rate caps only (Maimbo and Gallegos, 2014; Ferrari et al., 2018). In a paper similar to ours, Jafarov et al. (2019) attempt to compile a database on all types of IRCs and construct a basic index (i.e. based on binary variables) of IRCs across economies. However, like in previous studies except for Reifner et al. (2010), it is based on data and information from secondary sources. To the

> 5 Recent literature finds that the relationship between financial liberalization and financial instability is more complicated and that non-linearities may be at play. See, for example, Loayza and Ranciere (2006); Ranciere et al. (2006); Kaminsky and Schmukler (2008); Angkinand et al. (2010).

5