Capital Market Development : Whither Latin America?

Over the past decades, many countries have implemented significant reforms to foster capital market development. Latin American countries were at the forefront of this process. The authors analyze where Latin American capital markets stand after these reforms. They find that despite the intense reform effort, capital markets in Latin America remain underdeveloped relative to markets in other regions. Furthermore, stock markets are below what can be expected, given Latin America's economic and institutional fundamentals. The authors discuss alternative ways of interpreting this evidence. They argue that it is difficult to pinpoint which policies Latin American countries should pursue to overcome their poor capital market development. Moreover, they argue that expectations about the outcome of the reform process may need to be revisited to take into account intrinsic characteristics of emerging economies. The latter may limit the scope for developing deep domestic capital markets in a context of international financial integration.

Bibliographic Details

Main Authors:	Gozzi, Juan Carlos, de la Torre, Augusto, Schmukler, Sergio L.
Language:	English
Published:	World Bank, Washington, DC 2007-03
Subjects:	ACCOUNTING, ADVERSE EFFECT, BENCHMARK, BOND MARKETS, BONDS, CAPITAL ACCOUNT, CAPITAL ACCOUNT LIBERALIZATION, CAPITAL MARKET, CAPITAL MARKET DEVELOPMENT, CAPITAL MARKETS, CORPORATE GOVERNANCE, COUNTRY RISK, DOMESTIC BOND MARKETS, DOMESTIC CAPITAL, DOMESTIC CAPITAL MARKET, DOMESTIC CAPITAL MARKETS, DOMESTIC FINANCIAL MARKETS, DOMESTIC FINANCIAL SYSTEMS, DOMESTIC MARKET, DOMESTIC MARKETS, DOMESTIC STOCK MARKETS, ECONOMIC GROWTH, ECONOMIES OF SCALE, EMERGING MARKETS, EQUITY CAPITAL, EQUITY MARKETS, FINANCIAL CRISIS, FINANCIAL DEVELOPMENT, FINANCIAL GLOBALIZATION, FINANCIAL INSTITUTIONS, FINANCIAL LIBERALIZATION, FINANCIAL MARKET, FINANCIAL MARKET LIBERALIZATION, FINANCIAL MARKETS, FINANCIAL OPENNESS, FINANCIAL REGULATION, FINANCIAL REPRESSION, FINANCIAL SECTOR, FINANCIAL SECTOR PERFORMANCE, FINANCIAL SYSTEM, FINANCIAL SYSTEMS, FOREIGN CURRENCY, FOREIGN DIRECT INVESTMENT, FOREIGN INVESTMENT, FORMAL ANALYSES, FORMAL ANALYSIS, FUTURE RESEARCH, GDP, GDP PER CAPITA, GOVERNMENT BONDS, GROSS DOMESTIC PRODUCT, HIGH EXPECTATIONS, INFLATION, INFLATION RATE, INITIAL PUBLIC OFFERINGS, INTEREST RATE, INTERNATIONAL CAPITAL, INTERNATIONAL CAPITAL MARKETS, INTERNATIONAL CAPITAL MOBILITY, INTERNATIONAL COUNTRY RISK GUIDE, INTERNATIONAL FINANCIAL INTEGRATION, INTERNATIONAL FINANCIAL MARKETS, INTERNATIONAL MARKETS, IPOS, LATIN AMERICAN, LIBERALIZATION OF STOCK MARKETS, LIQUIDITY, LOCAL STOCK MARKET, LOW LIQUIDITY, MACROECONOMIC POLICIES, MACROECONOMIC VOLATILITY, MARKET CAPITALIZATION, MARKET DEVELOPMENT, MARKET DISCIPLINE, MARKET LIBERALIZATION, MARKET REFORM, MARKET REFORMS, MARKET TRADING, NETWORK EXTERNALITIES, PARTIAL LIBERALIZATION, PER CAPITA INCOME, PORTFOLIOS, PRIVATE SECTOR, PROPERTY RIGHTS, REAL INTEREST RATES, REGULATORY FRAMEWORK, SAVINGS, SECURITIES, SECURITIES MARKETS, SECURITIES TRADING, SETTLEMENT SYSTEMS, STABILIZATION PROGRAMS, STOCK EXCHANGE, STOCK EXCHANGES, STOCK MARKET, STOCK MARKET LIBERALIZATION, STOCK MARKETS, STOCKS, TURNOVER, VALUE ADDED, VOLATILITY,
Online Access:	http://documents.worldbank.org/curated/en/2007/03/7427484/capital-market-development-whither-latin-america https://hdl.handle.net/10986/7205
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