Publication: Development of Non-bank Financial Institutions and Capital Markets in European Union Accession Countries
Loading...
Date
2004-02
ISSN
Published
2004-02
Author(s)
Editor(s)
Abstract
This paper assesses the role of non-bank financial institutions and capital markets in the financial sectors of the eight first-wave of Eastern European EU accession countries (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and Slovenia), the current state of development and prospects for future growth, and the likely impact on these segments of the financial system of accession to the EU. Throughout the paper, the level of development of nonblank financial institutions and capital markets in the accession countries is benchmarked against comparable development levels seen in existing EU member states. The paper concludes with a series of policy recommendations to facilitate future development of non-bank forms of financial intermediation.
Link to Data Set
Citation
“Bakker, Marie-Renée; Gross, Alexandra. 2004. Development of Non-bank Financial Institutions and Capital Markets in European Union Accession Countries. World Bank Working Paper;No. 28. © World Bank. http://hdl.handle.net/10986/15030 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Environmental Implications of a Central Bank Digital Currency (CBDC)(Washington, DC : World Bank, 2022-07)Two-thirds of central banks in the East Asia and Pacific (EAP) region have started researching or testing the implementation of a Central Bank Digital Currency (CBDC). At the same time, the region accounts for one-third of world CO2 emissions and is vulnerable to climate risks. As the Group of 7 (G7), European Central Bank (ECB), and Bank of England (BoE) have stated in their public statements, it is increasingly important to consider environmental impact when designing CBDC. However, only a few brief studies have been done on this subject, which will be crucial for the region. This Note explores the environmental implications of CBDC by comparing technical mechanisms and energy consumption within its distributed structure. It also illustrates differences in ecological footprint between CBDC and other payment methods (cryptocurrency, cash, and card networks). As the legitimacy of CBDC is backed by the trust of central banks, CBDC does not need to prove its legitimacy through its technological structure. Therefore, CBDC does not require the energy-intensive consensus or mining mechanisms used by a cryptocurrency, so its energy consumption is lower (comparable to that of a credit card system). CBDC can be designed to use various systems, such as Real Time Gross Settlement (RTGS), Distributed Ledger Technology (DLT), or a mixture of both. Careful deliberation to meet the objectives and implications will be important as CBDC can be a catalyst for financial innovation.Publication Assessing Incentives to Increase Digital Payment Acceptance and Usage(World Bank, Washington, DC, 2022-01-18)An important step to achieve greater financial inclusion is to increase the acceptance and usage of digital payments. Although consumer adoption of digital payments has improved dramatically globally, the acceptance and usage of digital payments for micro, small, and medium-sized retailers (MSMRs) remain challenging. Using random forest estimation, The authors identify 14 key predictors out of 190 variables with the largest predictive power for MSMR adoption and usage of digital payments. Using conditional inference trees, they study the importance of sequencing and interactions of various factors such as public policy initiatives, technological advancements, and private sector incentives. The authors find that in countries with low point of sale (POS) terminal adoption, killer applications such as mobile phone payment apps increase the likelihood of P2B digital transactions. They also find the likelihood of digital P2B payments at MSMRs increases when MSMRs pay their employees and suppliers digitally. The level of ownership of basic financial accounts by consumers and the size of the shadow economy are also important predictors of greater adoption and usage of digital payments. Using causal forest estimation, they find a positive and economically significant marginal effect for merchant and consumer fiscal incentives on POS terminal adoption on average. When countries implement financial inclusion initiatives, POS terminal adoption increases significantly and MSMRs’ share of person-to-business (P2B) digital payments also increases. Merchant and consumer fiscal incentives also increase MSMRs’ share of P2B electronic payments.Publication Structured Lesson Plans for Literacy Instruction(World Bank, Washington, DC, 2022-03-31)Literacy is the cornerstone of education, and a driver of human economic, social, and civic wellbeing. Despite its importance, far too many children fail to become literate. The World Bank uses a measure called learning poverty to indicate when a child cannot read and understand an age-appropriate text by age ten. The best available data showed that more than two-thirds of children in low- and middle-income countries suffer learning poverty. The World Bank is committed to helping countries achieve the learning target: to cut learning poverty by at least half by 2030. Achieving better outcomes in literacy requires a comprehensive effort in many domains. One of the most important is ensuring that students and teachers have and use high-quality instructional materials, especially textbooks, for reading instruction. As countries and systems review their literacy teaching and learning materials, they will want to compare them to the materials from other countries and systems. The purpose of the compendium is to allow such reviews and comparisons by grouping a critical mass of structured pedagogy lesson plans and related materials in one place.Publication A Novel Tobacco Market Diversification(World Bank, Washington, DC, 2022-04-27)In this working paper, an exploration of available data and information is conducted and findings presented, to support the view that the dichotomous business model and related harm reduction narrative promoted nowadays by the tobacco industry, merits scrutiny by the international community. The promotion of e-cigarettes as welfare enhancing in rich countries, particularly because they are posited to help adult smokers quit, tends to obfuscate a dire reality. The same tobacco industry that promotes (e-cigarettes as harm reduction in rich countries, derives the bulk of its profits by selling cigarettes in lower income countries.Publication Greening Digital in Korea(Washington, DC, 2022-02)Digital technologies are making a significant impact on societies, economies, and the physical world, presenting both opportunities and challenges for the green agenda. Applications of these technologies in sectors such as energy, urban, transport, and agriculture are creating new possibilities for climate change mitigation strategies. However, the rapid expansion of digital technologies increases energy usage too, and is therefore also increasing greenhouse gas (GHG) emissions. In seeking to address these challenges, the World Bank’s Digital Development Global Practice (DD) will publish a flagship report on Digital Development Opportunities for Climate Change, which will assess opportunities for greening with information communication technology (ICT), as well as opportunities for greening the ICT sector itself. To inspire and inform this flagship report, DD studied Korea’s experience in greening its ICT sector, with support from the Korean Green Growth Trust Fund. The Republic of Korea was selected for the case study due to its experience in both the digital and green sectors, and its status as a globally recognized ICT powerhouse. The country was also an early adopter of a green policy agenda, and is integrating DNA (data, network, and AI) into these policies. The government announced a national policy vision of “Low Carbon, Green Growth” in 2008 and has taken concrete steps to build a solid foundation for the green transition, through legislation, standardization, information-based instruments, economic instruments, research and development (R&D), and green procurement. More recently, the country has been aligning its green ICT strategy with the broader national GHG reduction target. Korea's experience can offer meaningful lessons to other countries looking to reduce the ICT sector’s climate impact. It shows that public policies have an important impact on the ICT market. The policy tools that can spur decarbonization of the ICT sector include green government procurement, information-based instruments, economic instruments, and provision of guidelines on green business practices. Keys to success in applying such tools include strong and early political commitment; long-term planning and comprehensive policies; prioritization; research and development (R&D) and investment; and a governance structure that allows a whole-of-government approach. Additionally, Korea’s experience shows that renewable energy will play an increasingly important role in reducing GHG emissions from the energy-intensive ICT industry. Korea’s experience also underscores the fact that more evidence and analysis are needed to measure and determine the effectiveness of policy and regulatory pathways for greening the ICT sector.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication The Development of Non-bank Financial Institutions in Ukraine : Policy Reform Strategy and Action Plan(Washington, DC: World Bank, 2006)The prospect of European integration presents huge opportunities and challenges for the development of non-bank financial institutions (NBFIs) in Ukraine. By most measures, the development of the NBFI sector in Ukraine lags far behind that of recent accession countries in Central Europe. To address the main impediments facing the development of the sector, the Ukrainian authorities need to implement a strategy based on six main pillars: 1) strengthen the capacity, independence, funding, and accountability of the NBFI regulators; 2) develop money markets, government bond markets, and municipal bond markets; 3) restructure equity markets; 4) accelerate the introduction of funded pension schemes, and, improve transparency and consumer protection in the insurance industry; 5) radically transform corporate governance; and, 6) broaden access of NBFI finance.Publication Turkey : Non-Bank Financial Institutions and Capital Markets Report(Washington, DC, 2003-02-28)Longstanding macroeconomic instability, and inflation in Turkey, have discouraged investment in financial assets, and a persistently high public sector borrowing requirement has crowded funding for the private sector. Notwithstanding, the Government's ongoing stabilization, and structural reforms, are improving the prospects for the development of financial services, though a series of policy issues should be addressed. This study identifies such issues, and formulates recommendations to better address them. Chapter I outlines the advantages of a broad based, diversified financial services industry, lays out the evidence of a clear correlation between financial system development, and per capita income, and, analyzes the outlook for such financial services industry over the next five years. Chapter II, in addressing the mobilization of savings, describes the extent to which macroeconomic uncertainty, chronically high inflation, and ill-suited tax policies have driven significant savings into real estate, gold, and overseas bank accounts. Recommendations suggest the development of a tax system that creates a level-playing field for investment assets, encouraging investments in longer-term/risk-based instruments, among others. Building an institutional investor base is addressed in Chapter III, where key issues are identified for developing the insurance, private pension and mutual fund industries. Chapters IV, V, and VI describe current developments of the equity, debt and derivatives markets, focusing on best practices to further develop venture capital, and, how to strengthen, and improve corporate governance, accounting and auditing standards. Finally, the need to rationalize the atomized oversight structure is recommended, where regulatory agencies should be responsible for supervising an increasingly integrated financial services industry, in addition to considerations on developing a holding company regime for financial, and mixed conglomerates.Publication Non-bank Financial Institutions and Capital Markets in Turkey(Washington, DC, 2003-04)This study analyses the state of development, and prospects of future growth of Turkish non-bank financial institutions, and capital markets. Currently, credit markets in Turkey are dominated by banking, and capital markets are dominated by Government securities. Longstanding macro-economic instability, and inflation have discouraged investment in financial assets, and crowded out funding for the private sector. The resulting lack of depth, and breadth has made the financial sector vulnerable to shocks, resulting in repeated crises, and, has reduced its intermediation efficiency. To enhance the financial sector's capacity to support private sector development, and economic growth, and to reduce its vulnerability to shocks, non-bank sources of finance should be developed. The report identifies the key policy issues that should be addressed for this purpose. The discussion, and policy recommendations are structured around the following leading themes: a) mobilizing savings; b) building an institutional investor base, comprising insurance companies, private pension funds, and mutual funds; c) developing equity, debt, and derivative markets; d) developing leasing, factoring, and venture capital companies; and, e) strengthening confidence in financial markets through improved corporate governance, accounting and auditing standards, and practices, and, financial sector regulation, and supervision.Publication Capital Markets and Non-bank Financial Institutions in Romania : Assessment of Key Issues and Recommendations for Development(Washington, DC, 2005)This study assesses key issues and recommendations for development, and reviews the specific changes which are necessary in four areas: structural reforms, market institutions, and infrastructure; accounting, transparency, and disclosure; market infrastructure; and credit enhancements. With only three years remaining before joining the European Union, Romania is working hard to improve its capital markets and non-bank financial institutions, which remain less developed than those in other accession countries. Strengthening these sectors has become a top priority for policymakers, whose primary objective is to ensure that the financial system is sufficiently developed to serve the growing demands of the Romanian economy.Publication The Development and Regulation of Non-Bank Financial Institutions(Washington, DC: World Bank, 2002-03)Non-bank financial institutions (NBFIs) are becoming an increasingly important segment of the financial system in some developing countries. This book aims to create awareness of the promise of NBFIs for developing countries and to assist policymakers in creating a coherent policy structure and a sound regulatory and supervisory environment for their development. The first chapter offers a coherent policy framework for addressing the regulation of NBFIs and the second chapter addresses the principles for regulation. Subsequent chapters provide an overview of the insurance industry, mutual funds and pension schemes, leasing and real estate companies, and securities markets, and discusses the specific regulatory framework for these institutions. The final chapter explores development policy challenges confronting emerging markets.
Users also downloaded
Showing related downloaded files
Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.Publication The Journey Ahead(Washington, DC: World Bank, 2024-10-31)The Journey Ahead: Supporting Successful Migration in Europe and Central Asia provides an in-depth analysis of international migration in Europe and Central Asia (ECA) and the implications for policy making. By identifying challenges and opportunities associated with migration in the region, it aims to inform a more nuanced, evidencebased debate on the costs and benefits of cross-border mobility. Using data-driven insights and new analysis, the report shows that migration has been an engine of prosperity and has helped address some of ECA’s demographic and socioeconomic disparities. Yet, migration’s full economic potential remains untapped. The report identifies multiple barriers keeping migration from achieving its full potential. Crucially, it argues that policies in both origin and destination countries can help maximize the development impacts of migration and effectively manage the economic, social, and political costs. Drawing from a wide range of literature, country experiences, and novel analysis, The Journey Ahead presents actionable policy options to enhance the benefits of migration for destination and origin countries and migrants themselves. Some measures can be taken unilaterally by countries, whereas others require close bilateral or regional coordination. The recommendations are tailored to different types of migration— forced displacement as well as high-skilled and low-skilled economic migration—and from the perspectives of both sending and receiving countries. This report serves as a comprehensive resource for governments, development partners, and other stakeholders throughout Europe and Central Asia, where the richness and diversity of migration experiences provide valuable insights for policy makers in other regions of the world.