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Financial sector development

About: Financial sector development is a research topic. Over the lifetime, 1674 publications have been published within this topic receiving 90787 citations.


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TL;DR: In this paper, Latvian corporate bond market is analyzed and compared to the other three countries in the Baltics: Latvia, Lithuania and Estonia, and the authors concluded that reviving securitisation, participation in European Long Term Investment Funds and developing European private placement market should be prioritised for Latvia within the Capital Market Union (CMU) framework.
Abstract: Baltic region is traditionally treated as similar and comparable when analysed on the macroeconomic level. The major difference is faced when the analysis is performed for the corporate bond market – the weight of Latvian publically traded corporate bonds among the three countries- Latvia, Lithuania and Estonia- reached 94% by the number of issues quoted. With 47 corporate bonds listed in Nasdaq Riga, Latvian corporate bond market demonstrated the rapid growth and recognition of corporate bonds as the source of alternative to bank lending financing method (Nasdaq Baltic, 2017). There are no obvious macro or microeconomic evidence for Latvia meeting more favourable conditions for corporate bond market development than Lithuania and Estonia The increasing role of the capital market as the alternative to the traditional to Europe banking sector is strongly supported by the European Commission (EC). In 2015 the EC announced the Capital Market Union (CMU) initiative and respective action plan as the reaction to the challenges faced by both banking sector and small and medium enterprise (SME) segment in Europe. As integrated and more diverse capital markets will decrease the cost of funding for companies, the objective of the CMU is to make the financial system more resilient in all 28 Member States including Latvia, Lithuania and Estonia (European Commission, 2017). While several steps like proposal to modernise the Prospectus Directive have been made, further actions based on the review of regulatory barriers to SME admission on public markets and SME growth markets and review of European Union corporate bond markets, focusing on how market liquidity can be improved made in 2017 will follow (European Commission, 2015). The aim of this article is to analyse the level of development of the biggest Baltic corporate bond market- Latvian corporate bond segment and to reveal the potential CMU introduction effect. The paper applies Financial Sector Development Indicators (FSDI) framework developed by The World Bank (World Bank, 2004) to the country cluster as defined by Bending et al (2014). The paper relates the results to CMU action plan developed by the European Commission. The article estimates that Latvian corporate bond market is highly developed compared to the peers selected where the only lagging area is size. The article concludes that reviving securitisation, participation in European Long Term Investment Funds and developing European private placement market should be prioritised for Latvia within CMU framework.DOI: http://dx.doi.org/10.5755/j01.eis.0.11.18147

1 citations

Posted Content
TL;DR: This paper found that foreign exchange deposits and loans in the Caucasus and Central Asia (CCA) region are mainly driven by volatile inflation and exchange rates, low financial depth, and asymmetric exchange rate policies biased toward depreciation.
Abstract: Dollarization rates in the Caucasus and Central Asia (CCA) region are among the highest in the world, with adverse consequences for macroeconomic stability, monetary policy transmission, and financial sector development. Using dynamic panel data models, we find that foreign exchange deposits and loans in the CCA are mainly driven by volatile inflation and exchange rates, low financial depth, and asymmetric exchange rate policies biased toward depreciation. Although there is no unique formula for success, empirical studies and cross-country experiences suggest that credible monetary and exchange rate frameworks, low and stable inflation, and deep domestic financial markets are essential ingredients of any de-dollarization strategy. In implementation, policymakers need to consider proper sequencing of policies, effective communication as well as risks from potential financial disintermediation and instability, and/or capital flight.

1 citations

Posted Content
TL;DR: In this paper, the authors examined the financial system reforms in the context of financial sector deepening and strategy for financial sector development and inclusion in Uganda and found that the indicators of financial system development are largely as they were in 1996 and that the actual gains from financial inclusion strategies are small.
Abstract: This paper examines the financial system reforms in the context of financial sector deepening, and strategy for financial sector development and inclusion in Uganda. Results suggest that the indicators of financial sector development are largely as they were in 1996 and that the actual gains from financial inclusion strategies are small. Evidence suggests a weak link between financial deepening and financial usage by firms and households. It finds the acclaimed success (by policy makers and stakeholders) in achieving financial inclusion somewhat exaggerated because their assessment relies in large part on the number of financial and mobile money accounts. The paper concludes that measurement of financial inclusion needs to go beyond looking at account numbers to understanding what is done with those account. It also recommends the subordination of financial inclusion policy to the needs of firms and households (—the type that is modelled to fit the local context) and more consideration of behavioural constraints in financial inclusion programmes.

1 citations

Journal Article
TL;DR: In this article, the authors discuss the complexities of financial sector development, remittances, and conflict-affected countries in the context of development studies, and present a set of best practice policy recommendations.
Abstract: 'Remittances', 'financial sector development' and 'conflict-affected countries' are, individually, complex and challenging issues in development studies. Combined, they create formidably dynamic development complexities that do not easily lend themselves to easy analytical segmentation and categorizations or standard static best practice policy recommendations.

1 citations


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Performance
Metrics
No. of papers in the topic in previous years
YearPapers
202357
202279
202155
202093
201991
201888