By Shahid Javed Burki, Guillermo E. Perry

Show description

Read Online or Download Annual World Bank Conference on Development in Latin America and the Caribbean, 1998: banks and capital markets : sound financial systems for the 21st century : proceedings of a conference held in San Salvador, El Salvador PDF

Similar world books

Electrical Machine Design The Design and Specification Of Direct And Alternating Current Machinery

Not like another reproductions of vintage texts (1) we haven't used OCR(Optical personality Recognition), as this results in undesirable caliber books with brought typos. (2) In books the place there are pictures equivalent to photos, maps, sketches and so forth we've endeavoured to maintain the standard of those pictures, in order that they signify thoroughly the unique artefact.

The 2000-2005 World Outlook for Radio Recorders with Cd (Strategic Planning Series)

The liberalization of markets has bring about checklist degrees of foreign investments. Icon workforce Ltd. 's fundamental venture is to help foreign managers to higher plan and enforce options in a world economic climate. It does so by way of supplying a variety of really good experiences, information bases, courses and prone to its consumers.

The 2000-2005 World Outlook for Educational Software (Strategic Planning Series)

The liberalization of markets has bring about list degrees of overseas investments. Icon crew Ltd. 's fundamental undertaking is to help foreign managers to raised plan and enforce innovations in a world financial system. It does so via offering quite a few really good stories, information bases, guides and providers to its consumers.

Additional info for Annual World Bank Conference on Development in Latin America and the Caribbean, 1998: banks and capital markets : sound financial systems for the 21st century : proceedings of a conference held in San Salvador, El Salvador

Example text

Because the ratio of loans to net worth is very large, even small changes in net worth can have a large impact on loans. Parenthetically, not only has modern finance emphasized the relative importance of this credit channel, it has actually challenged the validity of the older "money" channel, as an increasingly large fraction of money bears interest, as the ratio of transactions involved in exchanges of assets to those related to income generating activities has increased, as it has been recognized that this relationship itself changes dramatically over time and over the cycle, and as new developments in financial markets make an increasingly large fraction of transactions not dependent on money, as conventionally defined.

With debt, a company gets the full benefit of the upside realization of the risk, while the marginal cost of bad realizations is limited. In contrast, the risk incentives are more aligned with equity. Despite these advantages, in most countries equity is a trivial source of new finance, and net issuance of equity has actually been negative in the United States and United Kingdom over the past decades. While equity markets are a relatively more important source of finance in many emerging economies, they are still much smaller than bank finance or retained earnings.

It has also been shown that increases in capital requirements are an inefficient substitute for the franchise value that is lost as a result of ful liberalization; Pareto efficiency requires the use of both instruments, even in banking systems without deposit insurance (Hellman, Murdock, and Stiglitz 1997). This analysis is but one example of a general principle: Government intervention can help improve the performance of financial markets. One could go further: There are virtually no examples of successful financial markets in which governments do not play an important role.

Download PDF sample

Rated 4.17 of 5 – based on 28 votes