Financial Development: Maturing and Emerging Policy Issues

In recent decades, financial development policies in emerging market economies have been shaped by a fundamental shift toward market-based financial systems and the lessons from financial crises. Today, there is consensus that financial development depends on financial stability and convergence towa...

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Bibliographic Details
Published in:The World Bank research observer 2007-04, Vol.22 (1), p.67-102
Main Authors: de la Torre, Augusto, Gozzi, Juan Carlos, Schmukler, Sergio L.
Format: Article
Language:English
Subjects:
Auditing standards
Capital structure
Codes
Development studies
Economic crises
Economic development
Economic stability
Emerging markets
Financial development
Financial economics
Financial policy
Financial services
Globalization
Insurance policies
International economics
Latin America
Liberalization
Market economies
Observational research
Pension funds
Policy analysis
Policy making
Regulation of financial institutions
Securities regulations
Stock markets
Studies
Supervision
World Bank
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Summary:In recent decades, financial development policies in emerging market economies have been shaped by a fundamental shift toward market-based financial systems and the lessons from financial crises. Today, there is consensus that financial development depends on financial stability and convergence toward international standards. While the debate on some issues has matured, policy thinking in other areas is changing, fueled by recent experiences. This article analyzes the evolution of policy thinking on financial development and discusses three areas that are important to achieving deeper financial systems: stock market development, small- and medium-size enterprise financing, and defined- contribution pension systems. The main emerging issues in these areas are illustrated using recent experiences in Latin America. The article concludes that there is a need to take a fresh look at the evidence, improve diagnoses, and revisit expectations.
ISSN:0257-3032
1564-6971
DOI:10.1093/wbro/lkm004