Fostering Sound Financial Sector Development

This note outlines a short, to medium-term reform agenda to foster sound financial sector development. Mexico needs to broaden and deepen its financial system without compromising the financial stability gains of the last decade. Much more private...

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Main Author:	World Bank
Format:	Policy Note
Language:	English en_US
Published:	Washington, DC 2014
Subjects:	ACCESS TO BANK ACCESS TO CREDIT ACCOUNTS RECEIVABLE ASYMMETRIC INFORMATION ASYMMETRIES OF INFORMATION ATMS BAILOUTS BALANCE SHEET BALANCE SHEETS BANK BALANCE SHEETS BANK LENDING BANK LOAN BANK LOANS BANKING SECTORS BANKING SERVICES BANKS BARRIERS TO ENTRY BOND BONDS BORROWER BROKERAGE BROKERAGE ACTIVITIES CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CASH PAYMENT CIVIL LIABILITY CLAIM COLLATERAL COLLATERAL REGISTRATION COLLATERAL REQUIREMENTS COMMERCIAL BANK COMMERCIAL BANK CREDIT COMMERCIAL BANK LENDING COMMERCIAL BANK LOANS COMMERCIAL BANKS CONFLICT OF INTEREST CONFLICTS OF INTEREST CONSUMER CONSUMER COMPLAINTS CONSUMER CREDIT CONSUMER FINANCIAL EDUCATION CONSUMER PROTECTION CONSUMER PROTECTION LAWS CONSUMERS CONTRIBUTION CONTRIBUTION RATE CONTRIBUTION RATES CORPORATE GOVERNANCE COURT JUDGMENTS COURT RESOLUTIONS CREDIT AGENCY CREDIT BUREAU CREDIT BUREAUS CREDIT CARDS CREDIT COOPERATIVE CREDIT COOPERATIVES CREDIT COSTS CREDIT EXPANSION CREDIT GUARANTEE CREDIT GUARANTEES CREDIT HISTORIES CREDIT INFORMATION CREDIT INFORMATION SYSTEM CREDIT INFORMATION SYSTEMS CREDIT INSTITUTIONS CREDIT LINE CREDIT MARKETS CREDIT PROGRAMS CREDIT PROTECTION CREDIT REPORTING CREDIT REPORTING SYSTEM CREDIT REPORTING SYSTEMS CREDIT REPORTS CREDITOR CREDITOR COMMITTEES CREDITOR RIGHTS CREDITORS CREDITS DEBIT CARDS DEBT DEBTOR DEBTORS DEPOSIT DEPOSITORS DEPOSITS DERIVATIVES DEVELOPMENT BANK DEVELOPMENT BANKS DIVERSIFICATION DUE DILIGENCE ECONOMIC LOSSES ENFORCEMENT CAPACITY EQUITY MARKET EQUITY MARKETS FINANCIAL ASSETS FINANCIAL CONGLOMERATES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL EDUCATION FINANCIAL EDUCATION EFFORTS FINANCIAL GROUPS FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL LITERACY FINANCIAL PRODUCTS FINANCIAL REGULATOR FINANCIAL SAVINGS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL TRANSACTIONS FORECLOSURES FOREIGN INVESTORS FOREIGN MARKETS FRAUD FUND MANAGERS GOVERNMENT BONDS GROUPS OF CREDITORS INCOME INCOME SECURITIES INITIAL PUBLIC OFFERING INITIAL PUBLIC OFFERINGS INSOLVENCY INSOLVENCY CASES INSOLVENCY LAW INSOLVENCY PROCEDURES INSOLVENCY PROCEEDINGS INSOLVENCY PROCESS INSTITUTIONAL INVESTORS INSURANCE INTEREST INCOME INTEREST RATE INTERNATIONAL STANDARDS INVESTING INVESTMENT FUNDS INVESTMENT PERFORMANCE INVESTMENT REGULATIONS JUDICIAL PROCEDURES LARGE BANKS LEGAL FRAMEWORK LEGAL FRAMEWORK FOR INSOLVENCY LEGAL IMPEDIMENT LENDERS LEVERAGE LIABILITY LIQUIDATION LIQUIDATION PROCEDURES LOAN ACTIVITIES LOAN AMOUNT LOAN PORTFOLIOS LONG-TERM INVESTMENT MANDATE MANDATES MARKET CAPITALIZATION MARKET FOR GOVERNMENT DEBT MARKET INTEGRATION MATURITY MATURITY TRANSFORMATION MERGERS MICROCREDIT MOBILE PHONE MORTGAGE MOVABLE ASSETS MUTUAL FUNDS NEW INSOLVENCY NEW INSOLVENCY LAW NOTARY PARTIAL CREDIT PAYMENT SERVICES PAYMENT SYSTEMS PAYMENTS SYSTEM PENSION PENSION FUNDS PENSION SYSTEM PORTFOLIO PRIVATE CREDIT PRIVATE EQUITY PRIVATE INVESTMENT PRIVATE SECTOR CREDIT PRODUCTIVE INVESTMENTS PRODUCTIVITY PROFESSIONAL INVESTORS PROPERTY REGISTRIES REAL ESTATE REAL ESTATE ASSETS REAL ESTATE REGISTRIES REGISTRATION SYSTEM REGISTRY SYSTEMS REGULATORY BARRIERS REGULATORY FRAMEWORK REORGANIZATION REPLACEMENT RATES RETAIL BANKS RETAIL INVESTORS RETURN SAVINGS SAVINGS ACCOUNTS SECURITIES SECURITIES MARKETS SECURITY INTERESTS SMALLER FIRMS STOCK EXCHANGE TAX TAX CREDITS TRADE CREDIT TRANSACTION TRANSACTION COSTS TRANSPARENCY UNSECURED CREDITORS UNSECURED CREDITS USE OF DERIVATIVES WORKER CLAIMS
Online Access:	http://documents.worldbank.org/curated/en/2013/04/17570373/fostering-sound-financial-sector-development http://hdl.handle.net/10986/16584

id	okr-10986-16584
recordtype	oai_dc
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	ACCESS TO BANK ACCESS TO CREDIT ACCOUNTS RECEIVABLE ASYMMETRIC INFORMATION ASYMMETRIES OF INFORMATION ATMS BAILOUTS BALANCE SHEET BALANCE SHEETS BANK BALANCE SHEETS BANK LENDING BANK LOAN BANK LOANS BANKING SECTORS BANKING SERVICES BANKS BARRIERS TO ENTRY BOND BONDS BORROWER BROKERAGE BROKERAGE ACTIVITIES CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CASH PAYMENT CIVIL LIABILITY CLAIM COLLATERAL COLLATERAL REGISTRATION COLLATERAL REQUIREMENTS COMMERCIAL BANK COMMERCIAL BANK CREDIT COMMERCIAL BANK LENDING COMMERCIAL BANK LOANS COMMERCIAL BANKS CONFLICT OF INTEREST CONFLICTS OF INTEREST CONSUMER CONSUMER COMPLAINTS CONSUMER CREDIT CONSUMER FINANCIAL EDUCATION CONSUMER PROTECTION CONSUMER PROTECTION LAWS CONSUMERS CONTRIBUTION CONTRIBUTION RATE CONTRIBUTION RATES CORPORATE GOVERNANCE COURT JUDGMENTS COURT RESOLUTIONS CREDIT AGENCY CREDIT BUREAU CREDIT BUREAUS CREDIT CARDS CREDIT COOPERATIVE CREDIT COOPERATIVES CREDIT COSTS CREDIT EXPANSION CREDIT GUARANTEE CREDIT GUARANTEES CREDIT HISTORIES CREDIT INFORMATION CREDIT INFORMATION SYSTEM CREDIT INFORMATION SYSTEMS CREDIT INSTITUTIONS CREDIT LINE CREDIT MARKETS CREDIT PROGRAMS CREDIT PROTECTION CREDIT REPORTING CREDIT REPORTING SYSTEM CREDIT REPORTING SYSTEMS CREDIT REPORTS CREDITOR CREDITOR COMMITTEES CREDITOR RIGHTS CREDITORS CREDITS DEBIT CARDS DEBT DEBTOR DEBTORS DEPOSIT DEPOSITORS DEPOSITS DERIVATIVES DEVELOPMENT BANK DEVELOPMENT BANKS DIVERSIFICATION DUE DILIGENCE ECONOMIC LOSSES ENFORCEMENT CAPACITY EQUITY MARKET EQUITY MARKETS FINANCIAL ASSETS FINANCIAL CONGLOMERATES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL EDUCATION FINANCIAL EDUCATION EFFORTS FINANCIAL GROUPS FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL LITERACY FINANCIAL PRODUCTS FINANCIAL REGULATOR FINANCIAL SAVINGS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL TRANSACTIONS FORECLOSURES FOREIGN INVESTORS FOREIGN MARKETS FRAUD FUND MANAGERS GOVERNMENT BONDS GROUPS OF CREDITORS INCOME INCOME SECURITIES INITIAL PUBLIC OFFERING INITIAL PUBLIC OFFERINGS INSOLVENCY INSOLVENCY CASES INSOLVENCY LAW INSOLVENCY PROCEDURES INSOLVENCY PROCEEDINGS INSOLVENCY PROCESS INSTITUTIONAL INVESTORS INSURANCE INTEREST INCOME INTEREST RATE INTERNATIONAL STANDARDS INVESTING INVESTMENT FUNDS INVESTMENT PERFORMANCE INVESTMENT REGULATIONS JUDICIAL PROCEDURES LARGE BANKS LEGAL FRAMEWORK LEGAL FRAMEWORK FOR INSOLVENCY LEGAL IMPEDIMENT LENDERS LEVERAGE LIABILITY LIQUIDATION LIQUIDATION PROCEDURES LOAN ACTIVITIES LOAN AMOUNT LOAN PORTFOLIOS LONG-TERM INVESTMENT MANDATE MANDATES MARKET CAPITALIZATION MARKET FOR GOVERNMENT DEBT MARKET INTEGRATION MATURITY MATURITY TRANSFORMATION MERGERS MICROCREDIT MOBILE PHONE MORTGAGE MOVABLE ASSETS MUTUAL FUNDS NEW INSOLVENCY NEW INSOLVENCY LAW NOTARY PARTIAL CREDIT PAYMENT SERVICES PAYMENT SYSTEMS PAYMENTS SYSTEM PENSION PENSION FUNDS PENSION SYSTEM PORTFOLIO PRIVATE CREDIT PRIVATE EQUITY PRIVATE INVESTMENT PRIVATE SECTOR CREDIT PRODUCTIVE INVESTMENTS PRODUCTIVITY PROFESSIONAL INVESTORS PROPERTY REGISTRIES REAL ESTATE REAL ESTATE ASSETS REAL ESTATE REGISTRIES REGISTRATION SYSTEM REGISTRY SYSTEMS REGULATORY BARRIERS REGULATORY FRAMEWORK REORGANIZATION REPLACEMENT RATES RETAIL BANKS RETAIL INVESTORS RETURN SAVINGS SAVINGS ACCOUNTS SECURITIES SECURITIES MARKETS SECURITY INTERESTS SMALLER FIRMS STOCK EXCHANGE TAX TAX CREDITS TRADE CREDIT TRANSACTION TRANSACTION COSTS TRANSPARENCY UNSECURED CREDITORS UNSECURED CREDITS USE OF DERIVATIVES WORKER CLAIMS
spellingShingle	ACCESS TO BANK ACCESS TO CREDIT ACCOUNTS RECEIVABLE ASYMMETRIC INFORMATION ASYMMETRIES OF INFORMATION ATMS BAILOUTS BALANCE SHEET BALANCE SHEETS BANK BALANCE SHEETS BANK LENDING BANK LOAN BANK LOANS BANKING SECTORS BANKING SERVICES BANKS BARRIERS TO ENTRY BOND BONDS BORROWER BROKERAGE BROKERAGE ACTIVITIES CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CASH PAYMENT CIVIL LIABILITY CLAIM COLLATERAL COLLATERAL REGISTRATION COLLATERAL REQUIREMENTS COMMERCIAL BANK COMMERCIAL BANK CREDIT COMMERCIAL BANK LENDING COMMERCIAL BANK LOANS COMMERCIAL BANKS CONFLICT OF INTEREST CONFLICTS OF INTEREST CONSUMER CONSUMER COMPLAINTS CONSUMER CREDIT CONSUMER FINANCIAL EDUCATION CONSUMER PROTECTION CONSUMER PROTECTION LAWS CONSUMERS CONTRIBUTION CONTRIBUTION RATE CONTRIBUTION RATES CORPORATE GOVERNANCE COURT JUDGMENTS COURT RESOLUTIONS CREDIT AGENCY CREDIT BUREAU CREDIT BUREAUS CREDIT CARDS CREDIT COOPERATIVE CREDIT COOPERATIVES CREDIT COSTS CREDIT EXPANSION CREDIT GUARANTEE CREDIT GUARANTEES CREDIT HISTORIES CREDIT INFORMATION CREDIT INFORMATION SYSTEM CREDIT INFORMATION SYSTEMS CREDIT INSTITUTIONS CREDIT LINE CREDIT MARKETS CREDIT PROGRAMS CREDIT PROTECTION CREDIT REPORTING CREDIT REPORTING SYSTEM CREDIT REPORTING SYSTEMS CREDIT REPORTS CREDITOR CREDITOR COMMITTEES CREDITOR RIGHTS CREDITORS CREDITS DEBIT CARDS DEBT DEBTOR DEBTORS DEPOSIT DEPOSITORS DEPOSITS DERIVATIVES DEVELOPMENT BANK DEVELOPMENT BANKS DIVERSIFICATION DUE DILIGENCE ECONOMIC LOSSES ENFORCEMENT CAPACITY EQUITY MARKET EQUITY MARKETS FINANCIAL ASSETS FINANCIAL CONGLOMERATES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL EDUCATION FINANCIAL EDUCATION EFFORTS FINANCIAL GROUPS FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL LITERACY FINANCIAL PRODUCTS FINANCIAL REGULATOR FINANCIAL SAVINGS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL TRANSACTIONS FORECLOSURES FOREIGN INVESTORS FOREIGN MARKETS FRAUD FUND MANAGERS GOVERNMENT BONDS GROUPS OF CREDITORS INCOME INCOME SECURITIES INITIAL PUBLIC OFFERING INITIAL PUBLIC OFFERINGS INSOLVENCY INSOLVENCY CASES INSOLVENCY LAW INSOLVENCY PROCEDURES INSOLVENCY PROCEEDINGS INSOLVENCY PROCESS INSTITUTIONAL INVESTORS INSURANCE INTEREST INCOME INTEREST RATE INTERNATIONAL STANDARDS INVESTING INVESTMENT FUNDS INVESTMENT PERFORMANCE INVESTMENT REGULATIONS JUDICIAL PROCEDURES LARGE BANKS LEGAL FRAMEWORK LEGAL FRAMEWORK FOR INSOLVENCY LEGAL IMPEDIMENT LENDERS LEVERAGE LIABILITY LIQUIDATION LIQUIDATION PROCEDURES LOAN ACTIVITIES LOAN AMOUNT LOAN PORTFOLIOS LONG-TERM INVESTMENT MANDATE MANDATES MARKET CAPITALIZATION MARKET FOR GOVERNMENT DEBT MARKET INTEGRATION MATURITY MATURITY TRANSFORMATION MERGERS MICROCREDIT MOBILE PHONE MORTGAGE MOVABLE ASSETS MUTUAL FUNDS NEW INSOLVENCY NEW INSOLVENCY LAW NOTARY PARTIAL CREDIT PAYMENT SERVICES PAYMENT SYSTEMS PAYMENTS SYSTEM PENSION PENSION FUNDS PENSION SYSTEM PORTFOLIO PRIVATE CREDIT PRIVATE EQUITY PRIVATE INVESTMENT PRIVATE SECTOR CREDIT PRODUCTIVE INVESTMENTS PRODUCTIVITY PROFESSIONAL INVESTORS PROPERTY REGISTRIES REAL ESTATE REAL ESTATE ASSETS REAL ESTATE REGISTRIES REGISTRATION SYSTEM REGISTRY SYSTEMS REGULATORY BARRIERS REGULATORY FRAMEWORK REORGANIZATION REPLACEMENT RATES RETAIL BANKS RETAIL INVESTORS RETURN SAVINGS SAVINGS ACCOUNTS SECURITIES SECURITIES MARKETS SECURITY INTERESTS SMALLER FIRMS STOCK EXCHANGE TAX TAX CREDITS TRADE CREDIT TRANSACTION TRANSACTION COSTS TRANSPARENCY UNSECURED CREDITORS UNSECURED CREDITS USE OF DERIVATIVES WORKER CLAIMS World Bank Fostering Sound Financial Sector Development
geographic_facet	Latin America & Caribbean Mexico
relation	Mexico policy note;no. 1
description	This note outlines a short, to medium-term reform agenda to foster sound financial sector development. Mexico needs to broaden and deepen its financial system without compromising the financial stability gains of the last decade. Much more private investment is needed to transform the economy to boost productivity, and despite improvements in recent years, many households and firms still lack adequate access to financial services. Using the financial payments system to promote financial inclusion is a sound way to broaden access. However, experience in several countries has shown that accelerated (or forced) expansion of credit can harm rather than benefit customers. If financial institutions do not follow sound practices, they can fail, harming borrowers and depositors alike and creating social unrest. Institutional failures may also lead to costly bailouts, with substantial fiscal cost. An oversight system (both micro, and macro, prudential) that encourages prudent-risk taking and facilitates prompt resolution of failed institutions ensures that strategies for financial deepening do not compromise financial stability.
format	Economic & Sector Work :: Policy Note
author	World Bank
author_facet	World Bank
author_sort	World Bank
title	Fostering Sound Financial Sector Development
title_short	Fostering Sound Financial Sector Development
title_full	Fostering Sound Financial Sector Development
title_fullStr	Fostering Sound Financial Sector Development
title_full_unstemmed	Fostering Sound Financial Sector Development
title_sort	fostering sound financial sector development
publisher	Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2013/04/17570373/fostering-sound-financial-sector-development http://hdl.handle.net/10986/16584
_version_	1764433760221134848
spelling	okr-10986-165842021-04-23T14:03:30Z Fostering Sound Financial Sector Development World Bank ACCESS TO BANK ACCESS TO CREDIT ACCOUNTS RECEIVABLE ASYMMETRIC INFORMATION ASYMMETRIES OF INFORMATION ATMS BAILOUTS BALANCE SHEET BALANCE SHEETS BANK BALANCE SHEETS BANK LENDING BANK LOAN BANK LOANS BANKING SECTORS BANKING SERVICES BANKS BARRIERS TO ENTRY BOND BONDS BORROWER BROKERAGE BROKERAGE ACTIVITIES CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CASH PAYMENT CIVIL LIABILITY CLAIM COLLATERAL COLLATERAL REGISTRATION COLLATERAL REQUIREMENTS COMMERCIAL BANK COMMERCIAL BANK CREDIT COMMERCIAL BANK LENDING COMMERCIAL BANK LOANS COMMERCIAL BANKS CONFLICT OF INTEREST CONFLICTS OF INTEREST CONSUMER CONSUMER COMPLAINTS CONSUMER CREDIT CONSUMER FINANCIAL EDUCATION CONSUMER PROTECTION CONSUMER PROTECTION LAWS CONSUMERS CONTRIBUTION CONTRIBUTION RATE CONTRIBUTION RATES CORPORATE GOVERNANCE COURT JUDGMENTS COURT RESOLUTIONS CREDIT AGENCY CREDIT BUREAU CREDIT BUREAUS CREDIT CARDS CREDIT COOPERATIVE CREDIT COOPERATIVES CREDIT COSTS CREDIT EXPANSION CREDIT GUARANTEE CREDIT GUARANTEES CREDIT HISTORIES CREDIT INFORMATION CREDIT INFORMATION SYSTEM CREDIT INFORMATION SYSTEMS CREDIT INSTITUTIONS CREDIT LINE CREDIT MARKETS CREDIT PROGRAMS CREDIT PROTECTION CREDIT REPORTING CREDIT REPORTING SYSTEM CREDIT REPORTING SYSTEMS CREDIT REPORTS CREDITOR CREDITOR COMMITTEES CREDITOR RIGHTS CREDITORS CREDITS DEBIT CARDS DEBT DEBTOR DEBTORS DEPOSIT DEPOSITORS DEPOSITS DERIVATIVES DEVELOPMENT BANK DEVELOPMENT BANKS DIVERSIFICATION DUE DILIGENCE ECONOMIC LOSSES ENFORCEMENT CAPACITY EQUITY MARKET EQUITY MARKETS FINANCIAL ASSETS FINANCIAL CONGLOMERATES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL EDUCATION FINANCIAL EDUCATION EFFORTS FINANCIAL GROUPS FINANCIAL INFRASTRUCTURE FINANCIAL INSTITUTION FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIARIES FINANCIAL LITERACY FINANCIAL PRODUCTS FINANCIAL REGULATOR FINANCIAL SAVINGS FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL TRANSACTIONS FORECLOSURES FOREIGN INVESTORS FOREIGN MARKETS FRAUD FUND MANAGERS GOVERNMENT BONDS GROUPS OF CREDITORS INCOME INCOME SECURITIES INITIAL PUBLIC OFFERING INITIAL PUBLIC OFFERINGS INSOLVENCY INSOLVENCY CASES INSOLVENCY LAW INSOLVENCY PROCEDURES INSOLVENCY PROCEEDINGS INSOLVENCY PROCESS INSTITUTIONAL INVESTORS INSURANCE INTEREST INCOME INTEREST RATE INTERNATIONAL STANDARDS INVESTING INVESTMENT FUNDS INVESTMENT PERFORMANCE INVESTMENT REGULATIONS JUDICIAL PROCEDURES LARGE BANKS LEGAL FRAMEWORK LEGAL FRAMEWORK FOR INSOLVENCY LEGAL IMPEDIMENT LENDERS LEVERAGE LIABILITY LIQUIDATION LIQUIDATION PROCEDURES LOAN ACTIVITIES LOAN AMOUNT LOAN PORTFOLIOS LONG-TERM INVESTMENT MANDATE MANDATES MARKET CAPITALIZATION MARKET FOR GOVERNMENT DEBT MARKET INTEGRATION MATURITY MATURITY TRANSFORMATION MERGERS MICROCREDIT MOBILE PHONE MORTGAGE MOVABLE ASSETS MUTUAL FUNDS NEW INSOLVENCY NEW INSOLVENCY LAW NOTARY PARTIAL CREDIT PAYMENT SERVICES PAYMENT SYSTEMS PAYMENTS SYSTEM PENSION PENSION FUNDS PENSION SYSTEM PORTFOLIO PRIVATE CREDIT PRIVATE EQUITY PRIVATE INVESTMENT PRIVATE SECTOR CREDIT PRODUCTIVE INVESTMENTS PRODUCTIVITY PROFESSIONAL INVESTORS PROPERTY REGISTRIES REAL ESTATE REAL ESTATE ASSETS REAL ESTATE REGISTRIES REGISTRATION SYSTEM REGISTRY SYSTEMS REGULATORY BARRIERS REGULATORY FRAMEWORK REORGANIZATION REPLACEMENT RATES RETAIL BANKS RETAIL INVESTORS RETURN SAVINGS SAVINGS ACCOUNTS SECURITIES SECURITIES MARKETS SECURITY INTERESTS SMALLER FIRMS STOCK EXCHANGE TAX TAX CREDITS TRADE CREDIT TRANSACTION TRANSACTION COSTS TRANSPARENCY UNSECURED CREDITORS UNSECURED CREDITS USE OF DERIVATIVES WORKER CLAIMS This note outlines a short, to medium-term reform agenda to foster sound financial sector development. Mexico needs to broaden and deepen its financial system without compromising the financial stability gains of the last decade. Much more private investment is needed to transform the economy to boost productivity, and despite improvements in recent years, many households and firms still lack adequate access to financial services. Using the financial payments system to promote financial inclusion is a sound way to broaden access. However, experience in several countries has shown that accelerated (or forced) expansion of credit can harm rather than benefit customers. If financial institutions do not follow sound practices, they can fail, harming borrowers and depositors alike and creating social unrest. Institutional failures may also lead to costly bailouts, with substantial fiscal cost. An oversight system (both micro, and macro, prudential) that encourages prudent-risk taking and facilitates prompt resolution of failed institutions ensures that strategies for financial deepening do not compromise financial stability. 2014-01-17T19:52:16Z 2014-01-17T19:52:16Z 2013-04-09 http://documents.worldbank.org/curated/en/2013/04/17570373/fostering-sound-financial-sector-development http://hdl.handle.net/10986/16584 English en_US Mexico policy note;no. 1 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC Economic & Sector Work :: Policy Note Economic & Sector Work Latin America & Caribbean Mexico

Fostering Sound Financial Sector Development

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