Creating an Efficient Financial System : Challenges in a Global Economy

Financial sector development fosters economic growth and reduces poverty by widening and broadening access to finance and allocating society's savings more efficiently. The author first discusses three pillars on which sound and efficient financial systems are built: macroeconomic stability an...

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Bibliographic Details
Main Author:	Beck, Thorsten
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTABILITY ACCOUNTING ACCOUNTING STANDARDS ADVERSE SELECTION AGENTS AGRICULTURAL BANKS AGRICULTURE BANK FAILURE BANK FAILURE RESOLUTION BANK LOANS BANK REGULATION BANK RUNS BANK SUPERVISION BANKING CRISES BANKING SECTOR BANKING SYSTEM BANKING SYSTEMS BANKRUPTCY BANKS BOOMS CAPITAL FLOWS CAPITAL MARKETS CAPITALIZATION CENTRAL BANK COMMERCIAL BANKS COMPARATIVE ADVANTAGE COMPETITIVENESS CONTRACT ENFORCEMENT CORPORATE GOVERNANCE COUNTRY COMPARISONS COVERAGE CREDIT MARKETS CROSS-COUNTRY EXPERIENCE CURRENCY CRISES DEBT DEPOSIT INSURANCE DEPOSIT INSURANCE SCHEMES DEPOSITORS DEPOSITS DIVIDENDS EARLY WARNING SYSTEM ECONOMIC GROWTH EMERGING ECONOMIES EMERGING MARKETS EXPECTED RETURN FACTORING FINANCIAL CONTRACTS FINANCIAL CRISES FINANCIAL FRAGILITY FINANCIAL INSTITUTIONS FINANCIAL INTEGRATION FINANCIAL INTERMEDIARY DEVELOPMENT FINANCIAL INTERMEDIATION FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL REGULATION FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL SECTOR REFORM FINANCIAL SERVICES FINANCIAL STABILITY FINANCIAL STRUCTURE FINANCIAL SYSTEMS FOREIGN BANKS FREE ENTRY GDP GDP PER CAPITA GOVERNMENT BANKS GOVERNMENT INTERVENTION HOUSING HOUSING FINANCE INFLATION INFLATION RATE INFLATION RATES INFORMATION COSTS INSTITUTIONAL ENVIRONMENT INSURANCE INTERDEPENDENCE INTEREST RATE INTEREST RATES INTERVENTION POWERS JUDICIAL SYSTEMS LAWS LEGAL SYSTEMS LIBERALIZATION OF FINANCIAL MARKETS LIQUIDATION LIQUIDITY LOOTING M2 MACROECONOMIC STABILITY MARKET DISCIPLINE MICROFINANCE MORAL HAZARD MORTGAGE LOANS POSITIVE EFFECTS PRIVATE BANKS PRIVATE PROPERTY PRIVATIZATION PRODUCTIVITY PRODUCTIVITY GROWTH PROGRAMS PROPERTY RIGHTS REAL GDP REGULATORY CAPTURE RELATIONSHIP LENDING RESOURCE ALLOCATION RISK MANAGEMENT RISK PREMIUMS RISK TAKING SAVINGS SECURITIES SECURITIES MARKETS SHAREHOLDERS SMALL BUSINESS STOCK MARKETS SUBORDINATED DEBT SUPERVISORY FRAMEWORK SYSTEMIC BANKING DISTRESS TOTAL COSTS TRADE BALANCE TRANSACTION COSTS TRANSPARENCY VOLATILITY
Online Access:	http://documents.worldbank.org/curated/en/2006/02/6606451/creating-efficient-financial-system-challenges-global-economy http://hdl.handle.net/10986/8764

Description
Summary:	Financial sector development fosters economic growth and reduces poverty by widening and broadening access to finance and allocating society's savings more efficiently. The author first discusses three pillars on which sound and efficient financial systems are built: macroeconomic stability and effective and reliable contractual and informational frameworks. He then describes three different approaches to government involvement in the financial sector: the laissez-faire view, the market-failure view and the market-enabling view. Finally, the author analyzes the sequencing of financial sector reforms and discusses the benefits and challenges that emerging markets face when opening their financial systems to international capital markets.

Creating an Efficient Financial System : Challenges in a Global Economy

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