Jennifer A. Elliott Cem Karacadag Vasudevan Sundararajan
Abstract
This paper proposes an integrated and risk-based approach to the sequencing and coordination of reforms to develop domestic financial markets. The paper argues that there is a hierarchy of financial markets that reflects the complexity of risks in each market and the interlinkages among markets. On the basis of this hierarchy, a sequencing of market development and risk-mitigation measures is proposed to minimize both macroeconomic and financial risks. Capital account opening can complement (but not substitute for) domestic institutional and market reforms to support the growth of local financial markets. The paper also argues that domestic institutional investors are critical to market development and risk mitigation.
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Publisher Info
Paper provided by International Monetary Fund in its series IMF Working Papers with number
03/116.
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Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Augusto de la Torre & Juan Carlos Gozzi & Sergio L. Schmukler, 2008.
"Capital Market Development: Whither Latin America?,"
NBER Chapters,
in: Financial Markets Volatility and Performance in Emerging Markets, pages 121-154
National Bureau of Economic Research, Inc.