The Development of Local Capital Markets: Rationale and Challenges

Luc Laeven

No 2014/234, IMF Working Papers from International Monetary Fund

Abstract: Capital markets can improve risk sharing and the efficiency with which capital is allocated to the real economy, boosting economic growth and welfare. However, despite these potential benefits, not all countries have well developed capital markets. Moreover, government-led initiatives to develop local capital markets have had mixed success. This paper reviews the literature on the benefits and costs of developing local capital markets, and describes the challenges faced in the development of such markets. The paper concludes with a set of policy recommendations emerging from this literature.

Keywords: WP; capital market; bond market; market; market development; local capital markets; stock markets; bond markets; capital market development; economic development; financial markets; fully fledged physical capital capital market; investor right; market conduct; physical capital; market size; Securities markets; Capital markets; Financial market infrastructure; Securities regulation; Global (search for similar items in EconPapers)
Pages: 25
Date: 2014-12-19
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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