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The Development of Local Capital Markets

Author: Mr.Luc Laeven

Publisher: International Monetary Fund

Published: 2014-12-19

Total Pages: 25

ISBN-13: 1498372201

Capital markets can improve risk sharing and the efficiency with which capital is allocated to the real economy, boosting economic growth and welfare. However, despite these potential benefits, not all countries have well developed capital markets. Moreover, government-led initiatives to develop local capital markets have had mixed success. This paper reviews the literature on the benefits and costs of developing local capital markets, and describes the challenges faced in the development of such markets. The paper concludes with a set of policy recommendations emerging from this literature.

Latin American Local Capital Markets: Challenges and Solutions

Author: Mauro Miranda

Publisher: CFA Institute Research Foundation

Published: 2018-06-15

Total Pages: 92

ISBN-13: 194496049X

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Capital markets, both for debt and equity securities, have allowed firms to secure funding for productive uses while providing investors with opportunities for portfolio diversification. The importance of capital markets for the development of economies and for the betterment of society cannot be overstated. This is just as true in emerging economies with free markets, such as those found in Latin America, as it is in developed markets. However, capital markets in the region are not being utilized to the fullest. The idea behind this collection of articles is to offer a primer on the development of local capital markets in several select countries in Latin America. We discuss not only their history and current status but also their future. To this end, seven authors contributed to this project, each writing about one of seven countries: Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Uruguay. Each author decided which issues they believe matter most to the progress of their local capital markets. Some authors chose a qualitative and institutional description of local markets, whereas others adopted a more quantitative approach.

The Future of Domestic Capital Markets in Developing Countries

Author: Robert E. Litan

Publisher: Rowman & Littlefield

Published: 2003-09-05

Total Pages: 548

ISBN-13: 9780815796107

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The Future of Domestic Capital Markets in Developing Countries addresses the challenges that countries face as they develop and strengthen capital markets. Based on input from the world's most prominent capital market experts and leading policymakers in developing countries, this volume represents the latest thinking in capital market development. It captures the views of a global gathering of experts, with perspectives from developing and developed countries, from all regions of the world, from the public and private sector. This volume should be of interest to senior financial sector policymakers from developed and developing countries in securities and exchange commissions, regulators, central banks, ministries of finance, and monetary authorities; private sector executives in stock exchanges, bond markets, venture capital markets, and investment funds; and researchers and academicians with an interest in capital market development in emerging markets. What are the key factors threatening the development and survival of stock exchanges in developing countries? What domestic strategies are needed to protect the future of local markets? Should exchanges consider linkages or alliances? Merging with, or buying up, other exchanges? Demutualization? The volume provides practical guidance on strategies such as nurturing issuers, improving rules and institutions, addressing regulatory challenges, and sequencing reforms. The contributors address a variety of country experiences, and suggest steps that policymakers and practitioners in emerging markets can take to promote an orderly transition toward efficient, well-regulated, and accessible capital markets. Contributors include Reena Aggarwal (Georgetown University), Alexander S. Berg (World Bank), Alan Cameron (Sydney Futures Exchange), Olivier Fremond (PSACG), Amar Gill (Credit Lyonnais Securities Asia), Gerd Hausler (IMF), Jack Glen (International Finance Corporation), Peter Blair Henry (Stanf

Emerging Capital Markets and Globalization

Author: Augusto de la Torre

Publisher: World Bank Publications

Published: 2006-10-20

Total Pages: 232

ISBN-13: 0821365444

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Back in the early 1990s, economists and policy makers had high expectations about the prospects for domestic capital market development in emerging economies, particularly in Latin America. Unfortunately, they are now faced with disheartening results. Stock and bond markets remain illiquid and segmented. Debt is concentrated at the short end of the maturity spectrum and denominated in foreign currency, exposing countries to maturity and currency risk. Capital markets in Latin America look particularly underdeveloped when considering the many efforts undertaken to improve the macroeconomic environment and to reform the institutions believed to foster capital market development. The disappointing performance has made conventional policy recommendations questionable, at best. 'Emerging Capital Markets and Globalization' analyzes where we stand and where we are heading on capital market development. First, it takes stock of the state and evolution of Latin American capital markets and related reforms over time and relative to other countries. Second, it analyzes the factors related to the development of capital markets, with particular interest on measuring the impact of reforms. And third, in light of this analysis, it discusses the prospects for capital market development in Latin America and emerging economies and the implications for the reform agenda.

The Importance of Local Capital Markets for Financing Development

Author:

Publisher:

Published: 2017

Total Pages: 0

ISBN-13:

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Money and Capital in Economic Development

Author: Ronald I. McKinnon

Publisher: Brookings Institution Press

Published: 2010-12-01

Total Pages: 204

ISBN-13: 9780815718499

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This books presents a theory of economic development very different from the "stages of growth" hypothesis or strategies emphasizing foreign aid, trade, or regional association. Leaving these aside, the author breaks new ground by focusing on the use of domestic capital markets to stimulate economic performance. He suggests a "bootstrap" approach in which successful development would depend largely on policy choices made by national authorities in the developing countries themselves. Central to his theory is the freeing of domestic financial markets to allow interest rates to reflect the true scarcity of capital in a developing economy. His analysis leads to a critique of prevailing monetary theory and to a new view of the relation between money and physical capital—a view with policy implications for governments striving to overcome the vicious circle of inflation and stagnation. Examining the performance of South Korea, Taiwan, Brazil, and other countries, the author suggests that their success or failure has depended primarily on steps taken in the monetary sector. He concludes that monetary reform should take precedence over other development measures, such as tariff and tax reform or the encouragement of foreign capital investment. In addition to challenging much of the conventional wisdom of development, the author's revision of accepted monetary theory may be relevant for mature economies that face monetary problems.

The Importance of Local Capital Markets for Financing Development

Author: Charles Blitzer

Publisher:

Published: 2017

Total Pages:

ISBN-13:

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Rudimentary markets for capital - for raising money and investing - exist in even the remotest places around the world. However, prudent macroeconomic management, regulation, investor protection, and innovation are necessary to transition these nascent markets, which are often speculative ventures prone to fraud, into modern, efficient, and well-functioning markets capable of serving the needs of investors and entrepreneurs, borrowers, and lenders alike. Developing local capital markets and making greater use of them to fund private investment and strategic economic needs tends to happens in stages. The experiences of countries across the globe shows that capital markets development is a gradual process requiring strong leadership from government authorities as well as a significant commitment of time and resources. If done correctly, the payoffs can be substantial and long-term. The strategic imperative, however, is to develop strategies that fit the particular country circumstances.

The Development of Local Debt Markets in Asia

Author: Mr.Mangal Goswami

Publisher: International Monetary Fund

Published: 2011-06-01

Total Pages: 33

ISBN-13: 1455259373

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The paper makes an assessment of the progress made in developing local debt markets in emerging Asia. Market development has been limited by hurdles confronting borrowers and lenders, current and potential liquidity providers, and insufficient support from government policies and regulations. Besides fostering a credit culture to deepen local debt markets, the issue of critical size can be addressed through an integrated regional market for local currency bonds that provides greater scale, efficiency, and access. With rapid economic growth in Asia, a key challenge is to generate financial assets that can provide the underlying collateral for expanding fixed-income markets, and hence domestic and regional investment opportunities.

Focus on Capital

Author: Kenroy Dowers

Publisher: IDB

Published: 2003

Total Pages: 572

ISBN-13: 9781931003490

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Local capital market development responds to the need to reduce the risk of financial crises that result from an excessive reliance on external borrowing -- for example, to avoid foreign exchange risk, reduce contagion, and decrease short-term external borrowing. In fact, as financial crises dwarf the role of financial intermediation, the problems of asymmetric information become even more severe, leading to greater public mistrust of financial institutions. The contributors in Focus on Capital tackle various aspects of developing Latin American capital markets. Macroeconomic and structural policies, accounting practices and standards, bond market development, market infrastructure, derivatives markets, corporate governance, ethics, human capital, and regional integration all play a role. One of the shortcomings of many strategies for capital market development -- more important than getting the sequencing wrong -- is failing to understand the links between the various components and the need for an overall strategy as well as plans for each component. Focus on Capital analyzes the status of the markets in Latin America and identifies the technical, political, and financial challenges to building vibrant capital markets and increasing the efficiency benefits of regional economic and financial integration.

Global Capital Markets

Author: Maurice Obstfeld

Publisher: Cambridge University Press

Published: 2004

Total Pages: 386

ISBN-13: 9780521671798

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This book is an economic survey of international capital mobility from the late nineteenth century to the present.