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A framework for financial market development

  • Ralph Chami
  • Connel Fullenkamp
  • Sunil Sharma

A framework for examining the process of financial market development is proposed. The framework is anchored in studying the incentives facing the key players in financial markets - borrowers, lenders, liquidity providers, and regulators - whose actions determine whether and how markets develop. While different financial instruments embody different concessions by borrowers and lenders, the framework emphasizes two main compromises: the tradeoffs between maturity and collateral, and between seniority and control in the sequencing of market development.

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Article provided by Taylor & Francis Journals in its journal Journal of Economic Policy Reform.

Volume (Year): 13 (2010)
Issue (Month): 2 ()
Pages: 107-135

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Handle: RePEc:taf:jpolrf:v:13:y:2010:i:2:p:107-135
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