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  • Publication
    Getting Finance in South Asia 2010
    (World Bank, 2010-08-01) Sophastienphong, Kiatchai; Kulathunga, Anoma
    The recent global financial meltdown was a revelation in one sense. Before the crisis there had been a belief that banks could never fail, a belief that encouraged overleveraging and excessive risk taking. The complexity of financial instruments, opaqueness of transactions, and sophistication of modeling techniques used by developed country financial institutions all combined to conceal the hollowness of their success. Many financial institutions largely ignored regulatory requirements or preempted them through the use of complex instruments and methods, while risk taking caused profits to rocket to unimaginable levels. Regulatory arbitrage became rampant in this environment. While financial institutions were in a mode of overexpansion, regulators visibly failed to enforce regulations, and the financial institutions took advantage of the regulatory anarchy. All this was an eye-opener for regulators in South Asia, as regulatory lapses and lack of enforcement can lead to potential instability in financial systems. The report evaluates key prudential guidelines issued by the regulatory authority of each country to assess the comparability of data as well as to shed light on the country's level of regulatory development. It also expands the group of benchmark economies to allow comparison with diverse economies in Asia as well as the Western hemisphere. And it includes a special write-up on how South Asian countries and commercial banking sectors are managing the impact of the global financial crisis and economic slowdown.
  • Publication
    Getting Finance in South Asia 2009
    (Washington, DC : World Bank, 2008) Sophastienphong, Kiatchai; Kulathunga, Anoma
    This report, getting finance in South Asia 2009, published annually by the unit, reaffirms the World Bank's commitment to working with developing member countries to promote financial sector development and create financial systems that are sound, stable, supportive of growth, and responsive to people's needs. This program has enabled the Bank to initiate a dialogue with the supervisory authorities in South Asia to improve their data collection efforts, which will in turn strengthen their off-site supervision work. It also provides the impetus for the Bank to expand its monitoring and evaluation work. The getting finance indicators, and the country rankings that are based on them, are expected to become an increasingly important reference tool for the Bank in monitoring and evaluating development objectives and outcomes in its financial sector operations. These indicators should also prove to be a valuable tool for financial sector supervisory agencies in South Asia. The updated indicators, country rankings, and benchmarks should better equip these agencies to monitor the health of their respective country's banking system and to assess its robustness and sustainability relative to others in South Asia and in more developed economies.
  • Publication
    South Asian Bond Markets : Developing Long-Term Finance for Growth
    (Washington, DC : World Bank, 2008) Sophastienphong, Kiatchai; Mu, Yibin; Saporito, Carlotta
    Bond markets play an essential part in economies. As part of a diversified financial system, a well-developed domestic bond market can help provide the long-term financing needed for sustainable growth. It can also produce broad-ranging benefits throughout the economy. In South Asia the development of domestic debt securities markets lags. The markets remain small compared both with the size of the region's economies and with markets in East Asia. Even in India the market is still small relative to Gross Domestic Product (GDP), suggesting that long-term debt financing remains at an early stage in the region. Equity markets and banks still dominate South Asian financial systems. Measures are needed to enhance both the depth and the breadth of South Asian bond markets, to bring them into line with those in East Asia and, in the long run, with those in Organization for Economic Co-operation and Development (OECD) countries. This study assesses domestic debt securities markets in South Asia, identifies constraints to their development, and recommends measures for developing deeper, broader, and more efficient markets that can provide a competitive source of finance across a wide range of maturities for different debt issuers. The study covers five countries-Bangladesh, India, Nepal, Pakistan, and Sri Lanka. Within the region the development of domestic debt securities markets varies widely. India's is the most developed. Its experience, along with those of East Asian economies, suggests that much potential remains for developing South Asian bond markets and expanding their contribution to growth and development. Greater regional integration of South Asian bond markets could add to the benefits.