This paper analyzes the role of the financial system for economic growth and stability, and addresses a number of core policy issues for financial sector reforms in emerging economies. The role of finance is studied in the context of a circuit model with interacting rational, forward- looking, and heterogeneous agents. Finance is shown to essentially complement the price system in coordinating decentralized intertemporal resource allocation choices from agents operating under limited information and incomplete trust.
This paper examines how corporate financial structure shapes the impact of a financial crisis on the real sector by way of its effects on flows of funds and on corporate real expenditures.
It is one of the first papers to utilize extensive cross-country flow and balance sheet data and also to examine
subcomponents of GDP in the wake of banking and currency crises rather than focusing exclusively on aggregate GDP.
The calm before the storm? That question dominated the stage at the
seventh annual conference on emerging markets finance, cosponsored
by the World Bank and the Brookings Institution and held at Brookings in
late April 2005.
At the time of the conference, it had been a little less than eight years since
the onset of the Asian financial crisis, an event that had depression-like effects
throughout much of Asia and, for a time, seemed to threaten global economic
This paper addresses issues in financial sector regulation from two perspectives. First, it reports on the state of implementation of financial regulatory standards across banking, insurance, and securities sectors in a select group of Fund member countries. Second, it raises issues relating to the design of these three sector standards, arising from the implementation experience and the evolving structure of financial systems. In this regard, the paper identifies a few emerging regulatory risks and some cross-sectoral issues that may warrant further guidance by standard setters....
The past three decades have been a remarkable period for innovation. This
is no less true, and probably truer, for financial innovation. No prior period
of equal length has ever witnessed anything that even comes close.
This innovation has included amazing advances in financial theory, computational
capability, new product design, new trading processes, new markets, and new
applications. In fact, each of these innovations has supported and reinforced the
These issues have brought us into contact with an expanded
set of policymakers—both here and abroad. Under Dodd-
Frank, established regulators like the Commodity Futures
Trading Commission and new ones like the Financial Stability
Oversight Council are writing rules that aect funds and their
advisers. And worldwide, policymakers are adopting a more
global stance. The Institute has worked to ensure that policy-
makers understand the functioning and vital role of our funds.
As always, our approach has been highly substantive and
This monograph emerged from our efforts to study the behavior of the
households from the Townsend Thai Monthly Survey. This experience
convinced us that imposing an accounting framework and creating
financial statements would be a useful, indeed a necessary, first step
for the analysis of household finance, especially from high-frequency,
This paper assesses inflation targeting in emerging market economies (EMEs), and develops applied prescriptions for the conduct of monetary policy and inflation-targeting design in EMEs. We verify that EMEs have faced more acute trade-offs higher output and inflation volatility and worse performance than developed economies. These results stem from more pronounced external shocks, lower credibility, and lower level of development of institutions in these countries. In order to improve their performance,...
This report looks at the emerging related consumer trends of maturialism (mature materialism) and SKIing (Spending the Kids’ Inheritance) in the Baby Boomer generation, and the underlying factors that are driving these consumer trends. The report then turns to how these consumer
While this crisis had many causes, it is clear now that the government could have done
more to prevent many of these problems from growing out of control and threatening the
stability of our financial system. Gaps and weaknesses in the supervision and regulation
of financial firms presented challenges to our government’s ability to monitor, prevent, or
address risks as they built up in the system. No regulator saw its job as protecting the
economy and financial system as a whole.
Chapter 14 - Regulating the financial system. The purpose of this chapter is: To look at the sources and consequences of financial fragility focusing on the banking sector, to look at the institutional safeguards the government has built into the system in an attempt to avert financial crises, to study the regulatory and supervisory environment of the banking industry, to examine emerging approaches to regulation that focus on the safety of the financial system rather than on individual institutions.
Chapter 13 - Regulation of commercial banks. In this chapter, we reviewed the regulations imposed on CBs. We provided an overview of historical and current regulations on CBs' product offerings and geographic expansion opportunities. The recent loosening of regulations in these areas is likely to result in the emergence of many large U.S.
The market leading Essentials of Investments, 6e by Bodie, Kane and Marcus is an undergraduate textbook on investment analysis, presenting the practical applications of investment theory to convey insights of practical value. The authors have eliminated unnecessary mathematical detail and concentrate on the intuition and insights that will be useful to practitioners throughout their careers as new ideas and challenges emerge from the financial marketplace.
Islamic scholars have been critically examining the modus operandi of modern commercial
banks ever since their establishment in the Muslim world in the last decade of the nineteenth
century. As time passed, the consensus emerged among the scholars that the system was
against the principles of Shar¯ı´ah, mainly because of paying/charging returns on loans and
The world is near the bottom of a global recession that is causing widespread business
contraction, increases in unemployment, and shrinking government revenues. Although recent
data indicate the large industrialized economies may have reached bottom and are beginning to
recover, for the most part, unemployment is still rising. Numerous small banks and households
still face huge problems in restoring their balance sheets, and unemployment has combined with
sub-prime loans to keep home foreclosures at a high rate.
The ability to recognize and deal with complex business ethics issues has become a
significant priority in twenty-first-century companies. In recent years, a number of
well-publicized scandals resulted in public outrage about deception and fraud in
business and a demand for improved business ethics and greater corporate responsibility.
1. Inflation targeting is becoming the monetary policy framework of choice in a
growing number of emerging market and developing countries. This paper examines the
experience of non-industrial inflation targeting countries to review the implications for the
Fund’s approach to surveillance, technical assistance, and the design of conditionality in
Fund-supported programs. For this examination, the paper uses macroeconomic data,
technical assistance reports, and a new survey of central banks in selected emerging markets....
Global Corporate Finance provides students with the practical skills needed to understand global financial problems and techniques. The fifth edition of this essential text emphasizes shareholder value and corporate governance, global strategy, and corporate finance practice. With the addition of 26 new case studies, an enhanced focus on international topics, and increased coverage of emerging markets, the new edition is an indispensable text for undergraduate and graduate students.
Over the past 20 years a microfinance industry has emerged in response to the
lack of access to formal financial services for most of the world’s poor. Microfinance
institutions serve an ever-increasing number of poor clients, but the demand for
such financial services still far outstrips their capacity.
To meet this demand, most microfinance institutions plan to increase their
outreach. But rapid growth strains an institution’s systems and changes its financial
Although the growing literature on the importance of finance in economic growth contrasts
bank-based financial systems with market-based financial systems, little attention has been paid to the
role of the bond market. Correspondingly the role of the bond market has been very small relative to
that of the banking system or equity markets in most Asian emerging economies. We argue that the
underdevelopment of Asian bond markets has undermined the efficiency of these economies and
made them significantly more vulnerable to financial crises....