Publication: Capital Market Development : Whither Latin America?
Date
2007-03
ISSN
Published
2007-03
Author(s)
Abstract
Over the past decades, many countries
have implemented significant reforms to foster capital
market development. Latin American countries were at the
forefront of this process. The authors analyze where Latin
American capital markets stand after these reforms. They
find that despite the intense reform effort, capital markets
in Latin America remain underdeveloped relative to markets
in other regions. Furthermore, stock markets are below what
can be expected, given Latin America's economic and
institutional fundamentals. The authors discuss alternative
ways of interpreting this evidence. They argue that it is
difficult to pinpoint which policies Latin American
countries should pursue to overcome their poor capital
market development. Moreover, they argue that expectations
about the outcome of the reform process may need to be
revisited to take into account intrinsic characteristics of
emerging economies. The latter may limit the scope for
developing deep domestic capital markets in a context of
international financial integration.
Citation
“de la Torre, Augusto; Gozzi, Juan Carlos; Schmukler, Sergio L.. 2007. Capital Market Development : Whither Latin America?. Policy Research Working Paper; No. 4156. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/90f0c2c9-27dd-596a-bebc-61639dfa0f1f License: CC BY 3.0 IGO.”
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