Are Financial Sector Weaknesses Undermining the East Asian Miracle?IFC Technical Paper No. 3. Inflation plagues many of the developing countries in which the International Finance Corporation (IFC) operates. To date, however, little is known about the impact of inflation on the financial statements of firms in developing countries. The authors of this study have developed a simple algorithm, based on the method of inflation accounting used in Brazil, and have applied it to the accounts of listed companies in Turkey for the period 1982-90. The paper documents an inflation-induced bias in financial statements and introduces a methodology for adjusting corporate financial statements for inflation effects. |
Contents
Summary | 1 |
Developing Securities Markets | 18 |
Responding to the Internationalization of Financial Services | 33 |
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1995 Percentage Argentina assets Banking Crises Brazil Cambodia capital controls Claessens contractual savings corporate governance create currency developing countries Developing East Asia domestic financial East Asia average East Asian countries East Asian economies efficiency equity markets example exchange rate Figure financial markets financial reform financial sector development financial services firms foreign funded defined benefit Glaessner global Government-owned Hong Kong China improve incentives increase Indonesia infrastructure finance institutional framework institutional investor base internationalization of financial investment issues Japan Latin America lending liquidity macroeconomic Malaysia market capitalization market liquidity market participants Mexico nonperforming loans occupational pension plans offshore market partly funded defined percent Percentage of GDP Philippines problems Provident fund covers providers of financial recently region regulatory require restructuring risks robust banking systems role Singapore Source Standard & Poor's stock markets structural Studying feasibility Sub-Saharan Africa tems Thailand trade in financial United Kingdom Vietnam Voluntary World Bank data