Financial Development in Latin America : Big Emerging Issues, Limited Policy Answers
This paper argues that the dominant policy paradigm on financial development is increasingly insufficient to address big emerging issues that are particularly relevant for financial systems in Latin America. This paradigm was shaped over the past decades by a fundamental shift in thinking toward mar...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2006/07/6913982/financial-development-latin-america-big-emerging-issues-limited-policy-answers http://hdl.handle.net/10986/8398 |
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okr-10986-8398 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
ACCOUNTING ADVERSE EFFECT ALLOCATION OF RESOURCES ASSET BUBBLES ASYMMETRIC INFORMATION BALANCE OF PAYMENTS BALANCE SHEET BALANCE SHEETS BANK DEPOSITS BANKING CRISES BANKING SUPERVISION BENCHMARK BENCHMARKS BONDS BORROWING CAPITAL ACCOUNT CAPITAL ACCOUNTS CAPITAL FLOW VOLATILITY CAPITAL INFLOWS CAPITAL LOSSES CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CENTRAL BANK CENTRAL BANK INDEPENDENCE CONSUMERS CONSUMPTION SMOOTHING CONTAGION CORPORATE GOVERNANCE CREDIT CEILINGS CREDITOR RIGHTS DEBT DEBT CRISIS DEPOSITS DEVALUATION DEVELOPING COUNTRIES DEVELOPMENT POLICY DOMESTIC CAPITAL DOMESTIC CAPITAL MARKETS DOMESTIC CURRENCY DOMESTIC FINANCIAL MARKETS DOMESTIC FINANCIAL SYSTEM DOMESTIC INVESTORS DOMESTIC MARKETS DOMESTIC POLICIES DOMESTIC STOCK MARKETS ECONOMIC CONTRACTION ECONOMIC GROWTH ECONOMIC SIZE EMERGING ECONOMIES EMERGING MARKET EMERGING MARKETS EMPIRICAL EVIDENCE EQUITY MARKETS EXCHANGE RATE EXCHANGE RATE FLEXIBILITY EXCHANGE RATE POLICY EXCHANGE RATE REGIMES EXCHANGE RATES EXOGENOUS SHIFTS FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEPTH FINANCIAL DEREGULATION FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL GLOBALIZATION FINANCIAL INTERMEDIARIES FINANCIAL LIBERALIZATION FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKET LIBERALIZATION FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL POLICIES FINANCIAL REFORM FINANCIAL REPRESSION FINANCIAL SECTOR FINANCIAL SECTOR REFORM FINANCIAL SECTORS FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FLEXIBLE EXCHANGE RATE FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN INVESTORS GDP GLOBALIZATION HAZARD GROSS DOMESTIC PRODUCT HIGH INTEREST RATES HIGH VOLATILITY INFLATION INFLATION TARGETING INSIDER TRADING INSURANCE INSURANCE POLICIES INTEREST RATES INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL FINANCIAL ARCHITECTURE INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL INVESTORS INTERNATIONAL MARKETS INTERNATIONAL RESERVES INTERNATIONAL STANDARDS INVISIBLE HAND LATIN AMERICAN LIQUIDITY LOCAL CURRENCY LOCAL STOCK MARKET MACROECONOMIC POLICIES MARKET CAPITALIZATION MARKET COMPETITION MARKET DISCIPLINE MARKET INTEGRATION MARKET ORIENTATION MORAL HAZARD MULTIPLE EQUILIBRIA NEGATIVE EXTERNALITIES OVERVALUATION PER CAPITA INCOME POLICY RESEARCH PRICE STABILITY PRIVATE SECTOR PROPERTY RIGHTS PUBLIC DEBT PUBLIC FINANCES REAL EXCHANGE REAL EXCHANGE RATE REFORM AGENDA REGULATORY ENVIRONMENT SAFETY NETS SAVINGS SECURITIES SECURITIES MARKETS SETTLEMENT SYSTEMS SHORT-TERM DEBT STOCK MARKET STOCK MARKETS STOCKS TRANSPARENCY VALUE ADDED WEALTH |
| spellingShingle |
ACCOUNTING ADVERSE EFFECT ALLOCATION OF RESOURCES ASSET BUBBLES ASYMMETRIC INFORMATION BALANCE OF PAYMENTS BALANCE SHEET BALANCE SHEETS BANK DEPOSITS BANKING CRISES BANKING SUPERVISION BENCHMARK BENCHMARKS BONDS BORROWING CAPITAL ACCOUNT CAPITAL ACCOUNTS CAPITAL FLOW VOLATILITY CAPITAL INFLOWS CAPITAL LOSSES CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CENTRAL BANK CENTRAL BANK INDEPENDENCE CONSUMERS CONSUMPTION SMOOTHING CONTAGION CORPORATE GOVERNANCE CREDIT CEILINGS CREDITOR RIGHTS DEBT DEBT CRISIS DEPOSITS DEVALUATION DEVELOPING COUNTRIES DEVELOPMENT POLICY DOMESTIC CAPITAL DOMESTIC CAPITAL MARKETS DOMESTIC CURRENCY DOMESTIC FINANCIAL MARKETS DOMESTIC FINANCIAL SYSTEM DOMESTIC INVESTORS DOMESTIC MARKETS DOMESTIC POLICIES DOMESTIC STOCK MARKETS ECONOMIC CONTRACTION ECONOMIC GROWTH ECONOMIC SIZE EMERGING ECONOMIES EMERGING MARKET EMERGING MARKETS EMPIRICAL EVIDENCE EQUITY MARKETS EXCHANGE RATE EXCHANGE RATE FLEXIBILITY EXCHANGE RATE POLICY EXCHANGE RATE REGIMES EXCHANGE RATES EXOGENOUS SHIFTS FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEPTH FINANCIAL DEREGULATION FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL GLOBALIZATION FINANCIAL INTERMEDIARIES FINANCIAL LIBERALIZATION FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKET LIBERALIZATION FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL POLICIES FINANCIAL REFORM FINANCIAL REPRESSION FINANCIAL SECTOR FINANCIAL SECTOR REFORM FINANCIAL SECTORS FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FLEXIBLE EXCHANGE RATE FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN INVESTORS GDP GLOBALIZATION HAZARD GROSS DOMESTIC PRODUCT HIGH INTEREST RATES HIGH VOLATILITY INFLATION INFLATION TARGETING INSIDER TRADING INSURANCE INSURANCE POLICIES INTEREST RATES INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL FINANCIAL ARCHITECTURE INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL INVESTORS INTERNATIONAL MARKETS INTERNATIONAL RESERVES INTERNATIONAL STANDARDS INVISIBLE HAND LATIN AMERICAN LIQUIDITY LOCAL CURRENCY LOCAL STOCK MARKET MACROECONOMIC POLICIES MARKET CAPITALIZATION MARKET COMPETITION MARKET DISCIPLINE MARKET INTEGRATION MARKET ORIENTATION MORAL HAZARD MULTIPLE EQUILIBRIA NEGATIVE EXTERNALITIES OVERVALUATION PER CAPITA INCOME POLICY RESEARCH PRICE STABILITY PRIVATE SECTOR PROPERTY RIGHTS PUBLIC DEBT PUBLIC FINANCES REAL EXCHANGE REAL EXCHANGE RATE REFORM AGENDA REGULATORY ENVIRONMENT SAFETY NETS SAVINGS SECURITIES SECURITIES MARKETS SETTLEMENT SYSTEMS SHORT-TERM DEBT STOCK MARKET STOCK MARKETS STOCKS TRANSPARENCY VALUE ADDED WEALTH de la Torre, Augusto Gozzi, Juan Carlos Schmukler, Sergio L. Financial Development in Latin America : Big Emerging Issues, Limited Policy Answers |
| geographic_facet |
Latin America & Caribbean |
| relation |
Policy Research Working Paper; No. 3963 |
| description |
This paper argues that the dominant policy paradigm on financial development is increasingly insufficient to address big emerging issues that are particularly relevant for financial systems in Latin America. This paradigm was shaped over the past decades by a fundamental shift in thinking toward market-based financial development and a complex process of financial crises interpretation. The result has been a richly textured policy paradigm focused on promoting financial stability and the convergence to international standards. It argues, however, that there is a growing dissonance between the current paradigm and the emerging issues, which is illustrated by discussing challenges in three areas: stock markets, small and medium enterprise loans, and defined-contribution pension funds. The paper concludes that the dominant policy paradigm is ill-suited to provide significant guidance in relation to the big emerging issues. It emphasizes the need to take a fresh look at the evidence, improve the diagnoses, revisit expectations, and revise the paradigm. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
de la Torre, Augusto Gozzi, Juan Carlos Schmukler, Sergio L. |
| author_facet |
de la Torre, Augusto Gozzi, Juan Carlos Schmukler, Sergio L. |
| author_sort |
de la Torre, Augusto |
| title |
Financial Development in Latin America : Big Emerging Issues, Limited Policy Answers |
| title_short |
Financial Development in Latin America : Big Emerging Issues, Limited Policy Answers |
| title_full |
Financial Development in Latin America : Big Emerging Issues, Limited Policy Answers |
| title_fullStr |
Financial Development in Latin America : Big Emerging Issues, Limited Policy Answers |
| title_full_unstemmed |
Financial Development in Latin America : Big Emerging Issues, Limited Policy Answers |
| title_sort |
financial development in latin america : big emerging issues, limited policy answers |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2006/07/6913982/financial-development-latin-america-big-emerging-issues-limited-policy-answers http://hdl.handle.net/10986/8398 |
| _version_ |
1764406401367539712 |
| spelling |
okr-10986-83982021-04-23T14:02:41Z Financial Development in Latin America : Big Emerging Issues, Limited Policy Answers de la Torre, Augusto Gozzi, Juan Carlos Schmukler, Sergio L. ACCOUNTING ADVERSE EFFECT ALLOCATION OF RESOURCES ASSET BUBBLES ASYMMETRIC INFORMATION BALANCE OF PAYMENTS BALANCE SHEET BALANCE SHEETS BANK DEPOSITS BANKING CRISES BANKING SUPERVISION BENCHMARK BENCHMARKS BONDS BORROWING CAPITAL ACCOUNT CAPITAL ACCOUNTS CAPITAL FLOW VOLATILITY CAPITAL INFLOWS CAPITAL LOSSES CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CENTRAL BANK CENTRAL BANK INDEPENDENCE CONSUMERS CONSUMPTION SMOOTHING CONTAGION CORPORATE GOVERNANCE CREDIT CEILINGS CREDITOR RIGHTS DEBT DEBT CRISIS DEPOSITS DEVALUATION DEVELOPING COUNTRIES DEVELOPMENT POLICY DOMESTIC CAPITAL DOMESTIC CAPITAL MARKETS DOMESTIC CURRENCY DOMESTIC FINANCIAL MARKETS DOMESTIC FINANCIAL SYSTEM DOMESTIC INVESTORS DOMESTIC MARKETS DOMESTIC POLICIES DOMESTIC STOCK MARKETS ECONOMIC CONTRACTION ECONOMIC GROWTH ECONOMIC SIZE EMERGING ECONOMIES EMERGING MARKET EMERGING MARKETS EMPIRICAL EVIDENCE EQUITY MARKETS EXCHANGE RATE EXCHANGE RATE FLEXIBILITY EXCHANGE RATE POLICY EXCHANGE RATE REGIMES EXCHANGE RATES EXOGENOUS SHIFTS FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEPTH FINANCIAL DEREGULATION FINANCIAL DEVELOPMENT FINANCIAL FRAGILITY FINANCIAL GLOBALIZATION FINANCIAL INTERMEDIARIES FINANCIAL LIBERALIZATION FINANCIAL MARKET FINANCIAL MARKET DEVELOPMENT FINANCIAL MARKET LIBERALIZATION FINANCIAL MARKETS FINANCIAL OPENNESS FINANCIAL POLICIES FINANCIAL REFORM FINANCIAL REPRESSION FINANCIAL SECTOR FINANCIAL SECTOR REFORM FINANCIAL SECTORS FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL SYSTEM FINANCIAL SYSTEMS FLEXIBLE EXCHANGE RATE FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN INVESTORS GDP GLOBALIZATION HAZARD GROSS DOMESTIC PRODUCT HIGH INTEREST RATES HIGH VOLATILITY INFLATION INFLATION TARGETING INSIDER TRADING INSURANCE INSURANCE POLICIES INTEREST RATES INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL MARKETS INTERNATIONAL FINANCIAL ARCHITECTURE INTERNATIONAL FINANCIAL INTEGRATION INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL INVESTORS INTERNATIONAL MARKETS INTERNATIONAL RESERVES INTERNATIONAL STANDARDS INVISIBLE HAND LATIN AMERICAN LIQUIDITY LOCAL CURRENCY LOCAL STOCK MARKET MACROECONOMIC POLICIES MARKET CAPITALIZATION MARKET COMPETITION MARKET DISCIPLINE MARKET INTEGRATION MARKET ORIENTATION MORAL HAZARD MULTIPLE EQUILIBRIA NEGATIVE EXTERNALITIES OVERVALUATION PER CAPITA INCOME POLICY RESEARCH PRICE STABILITY PRIVATE SECTOR PROPERTY RIGHTS PUBLIC DEBT PUBLIC FINANCES REAL EXCHANGE REAL EXCHANGE RATE REFORM AGENDA REGULATORY ENVIRONMENT SAFETY NETS SAVINGS SECURITIES SECURITIES MARKETS SETTLEMENT SYSTEMS SHORT-TERM DEBT STOCK MARKET STOCK MARKETS STOCKS TRANSPARENCY VALUE ADDED WEALTH This paper argues that the dominant policy paradigm on financial development is increasingly insufficient to address big emerging issues that are particularly relevant for financial systems in Latin America. This paradigm was shaped over the past decades by a fundamental shift in thinking toward market-based financial development and a complex process of financial crises interpretation. The result has been a richly textured policy paradigm focused on promoting financial stability and the convergence to international standards. It argues, however, that there is a growing dissonance between the current paradigm and the emerging issues, which is illustrated by discussing challenges in three areas: stock markets, small and medium enterprise loans, and defined-contribution pension funds. The paper concludes that the dominant policy paradigm is ill-suited to provide significant guidance in relation to the big emerging issues. It emphasizes the need to take a fresh look at the evidence, improve the diagnoses, revisit expectations, and revise the paradigm. 2012-06-19T14:26:51Z 2012-06-19T14:26:51Z 2006-07 http://documents.worldbank.org/curated/en/2006/07/6913982/financial-development-latin-america-big-emerging-issues-limited-policy-answers http://hdl.handle.net/10986/8398 English Policy Research Working Paper; No. 3963 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean |