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 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.

Bibliographic Details

Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2013-04-09
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 https://hdl.handle.net/10986/16584
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