Financial Market Regulation and Reforms in Emerging Markets - Softcover

Softcover

ISBN 10: 0815704895 ISBN 13: 9780815704898

Verlag: Brookings Institution Press, 2011

Inhaltsangabe

The rapid spread and far-reaching impact of the global financial crisis have highlighted the need for strengthening financial systems in advanced economies and emerging markets. Emerging markets face particular challenges in developing their nascent financial systems and making them resilient to domestic and external shocks. Financial reforms are critical to these economies as they pursue programs of high and sustainable growth.
In this timely volume Masahiro Kawai, Eswar Prasad, and their contributors offer a systematic overview of recent developments in—and the latest thinking about—regulatory frameworks in both advanced countries and emerging markets. Their analyses and observations clearly point out the challenges to improving regulation, efficiency of markets, and access to the fi nancial system. Policymakers and financial managers in emerging markets are struggling to learn from the crisis and will need to grapple with some key questions as they restructure and reform their financial markets:
• What lessons does the global financial crisis of 2007–09 offer for the establishment of efficient and flexible regulatory structures?
• How can policymakers develop broader financial markets while managing the associated risks?
• How—or should—they make the formal financial system more accessible to more people?
• How might they best contend with multinational financial institutions?
This book is an important step in getting a better grasp of these issues and making progress toward solutions that strike a balance between promoting financial market development and efficiency on the one hand, and ensuring financial stability on the other.

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Über die Autorin bzw. den Autor

Masahiro Kawai is dean of the Asian Development Bank Institute. From 1998 to 2001, he was chief economist for the World Bank's East Asia and the Pacific Region, and he later was a professor at the University of Tokyo.Eswar S. Prasad holds the New Century Chair in International Economics at the Brookings Institution and is also the Tolani Senior Professor of Trade Policy at Cornell University and a research associate at the National Bureau of Economic Research.

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Financial Market Regulation and Reforms in Emerging Markets

BROOKINGS INSTITUTION PRESS

Copyright © 2011 ASIAN DEVELOPMENT BANK INSTITUTE
All right reserved.
ISBN: 978-0-8157-0489-8

Contents

Introduction Masahiro Kawai and Eswar S. Prasad.....................................................................................................................................vii1. Financial Sector Regulation and Reforms in Emerging Markets: An Overview Eswar S. Prasad.........................................................................................32. Market Failures and Regulatory Failures: Lessons from Past and Present Financial Crises Viral V. Acharya, Thomas Cooley, Matthew Richardson, and Ingo Walter.....................273. Evaluating the U.S. Plans for Financial Regulatory Reform Douglas J. Elliott.....................................................................................................754. Emerging Contours of Financial Regulation: Challenges and Dynamics Rakesh Mohan..................................................................................................1055. What Regulatory Policies Work for Emerging Markets? Luo Ping.....................................................................................................................1386. Banking Supervision in Indonesia Anwar Nasution..................................................................................................................................1587. Who Should Regulate Systemic Stability Risk? The Relevance for Asia Masahiro Kawai and Michael Pomerleano........................................................................1718. Financial Development: A Broader Perspective Richard Reid........................................................................................................................2039. Financial Development in Emerging Markets: The Indian Experience K. P. Krishnan..................................................................................................22610. Universalizing Complete Access to Finance: Key Conceptual Issues Suyash Rai, Bindu Ananth, and Nachiket Mor.....................................................................26511. Financial Inclusion and Financial Stability: Current Policy Issues Alfred Hannig and Stefan Jansen..............................................................................28412. Cross-Border Regulation after the Global Financial Crisis Alejandro Werner and Guillermo Zamarripa..............................................................................32113. Addressing Private Sector Currency Mismatches in Emerging Europe Jeromin Zettelmeyer, Piroska M. Nagy, and Stephen Jeffrey......................................................365Contributors.........................................................................................................................................................................407Index................................................................................................................................................................................409

Chapter One

Financial Sector Regulation and Reforms in Emerging Markets: An Overview

ESWAR S. PRASAD

The speed and breadth of contagion from the U.S. financial crisis have dramatically demonstrated the degree to which national economies, developed and developing alike, are intertwined. Initially a problem confined to the U.S. housing market, the rapid spillover of the crisis to the rest of the U.S. financial system and then to the global economy left financial institutions in other advanced economies reeling. The crisis has highlighted the need for substantive regulatory reforms geared toward ensuring the integrity and resilience of financial systems in the advanced economies.

The macroeconomic consequences of the crisis have also affected emerging markets and other developing economies, even though these groups have rebounded more quickly and sharply from the crisis. These shared ramifications have brought into even sharper relief the centrality of sound financial systems for emerging markets as well as low-income developing economies. Efficient and stable financial systems are essential for both emerging markets and low-income developing economies to achieve long-term balanced development and to absorb various types of shocks.

It is striking that the crisis emanated from the United States and hit a group of economies particularly hard, including that of the United Kingdom, that were once believed to have the most sophisticated and robust financial systems. These developments have necessitated the reevaluation of basic principles of financial regulation. Clearly, existing regulatory models and frameworks need to be reconfigured and strengthened. The necessary paradigms are still evolving, although there appears to be a general consensus on some key principles that will be central to a major redesign of financial regulation.

Emerging market financial systems, including those in Asia, have generally proven to be more robust and less affected by the global turmoil than their more advanced economy counterparts. It will be important to carefully filter out the right lessons from this outcome. Meanwhile, the imperative of financial development remains as strong as ever in emerging markets, although the focus is more on basic elements, such as strengthening banking systems and widening the scope of the formal financial system, rather than on creating sophisticated instruments and innovations.

Emerging markets face particular challenges in stabilizing their nascent financial systems in the face of shocks, both domestic and external. These challenges occur at a basic level in emerging markets, many of which are at the point of creating sound banking systems, widening inclusion in the formal financial system, and creating and managing a broader set of financial markets (such as corporate bond markets and basic currency derivatives). Thus the regulatory challenges in these economies are more about risks emanating from underdeveloped financial systems rather than risks from sophisticated financial innovations.

New paradigms for financial development and regulation will have to be suitably reframed for emerging markets, which have a number of varying institutional and capacity constraints. Regulation in low-income countries, where the breadth of formal financial systems is severely limited, poses an even greater set of conceptual and practical challenges.

Policymakers in emerging markets will need to grapple with a distinct set of issues once the recovery in the global economy is entrenched and attention can turn to the steps needed to restore financial stability. The following are some of the key issues facing policymakers and regulators in emerging markets:

—What lessons does the crisis offer for the establishment of efficient and flexible regulatory structures? Even advanced economies have had to confront these deep structural questions, which tend to be more complex in emerging markets due to inadequate regulatory capacity and weak legal and public institutions.

—How can the regulatory and financial development agendas be reconciled in a manner that creates regulatory space for the introduction of standardized products and the development of broader financial markets while effectively managing the associated risks? The financial development agenda is an important one in emerging markets where efficient financial intermediation remains a major challenge, with implications for general economic welfare.

—Is broader financial inclusion consistent with financial...

Details zur Ausgabe

• Verlag: Brookings Institution Press
• Erscheinungsdatum: 2011
• Sprache: Englisch
• ISBN 10: 0815704895
• ISBN 13: 9780815704898
• Einband: Taschenbuch
• Anzahl der Seiten: 423
• Herausgeber: Kawai Masahiro, Prasad Eswar S.
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: gpsr@libri.de; gpsr@libri.de; ; Friedensallee 273; Hamburg; 22763; Deutschland