Financial InstitutionsDomestic capital is the driving force behind any country's development, and effective domestic financial institutions are one of its most important facilitators, as these are the key channels between savings, and investment, a determinant of a country's economic growth. At the same time, foreign investment has a critical role to play, for it also brings foreign technical knowledge, competitive pricing, and higher standards of disclosure and performance. On developing the financial sector, the study looks at how to build financial infrastructure, and identifies the following areas, many developing economies are addressing: promotion and regulation of private sector financial institutions; regulation, and structures of investment funds, pension funds, and other institutional investors; funds mobilization; policy formation regarding sectoral development; and, creation of market systems. It is highlighted that progress must be made at both the institutional level, and at the regulatory level, summarizing the need for strong management, and governance, sound banking practices, to create a level playing field with adequate local counterparts. This requires strengthened local intermediation that provides venture capital funds, and lending activities. The International Finance Corporation's (IFC) efforts in attracting international capital is concentrated on policy advice and technical assistance, portfolio investment funds, and private equity funds among others. Future directions will be in creating local currency vehicles for savings, and investing; on helping authorities and private institutions adapt to globalization; on meeting the needs of a growing middle class, and business environment; and, on assisting in deepening bond markets. |
Common terms and phrases
Access for smaller Access to international agency lines Argentina Asia Korea Banco borrowers Access borrowers Credit borrowers Institution building borrowers Venture capital capital markets Institution Colombia Commercial bank Commercial bank CAMENA Commercial bank Europe Commercial bank LAC Country Project name Credit and agency credit Institution building credit institutions Institution Development LAC emerging markets Europe Turkey facilities cations US$m financial institutions Fiscal Net Loan foreign Fund Access Fund management guarantee Syndi Hana Bank Housing finance IFC's Indonesia Institution building 1995 Institution Region Country institutions Institution building international capital markets Investment bank investors LAC Argentina Leasing company Asia Leasing company CAMENA lines for on-lending market institutions Institution markets Institution building Merchant bank million on-lending to SME's percent Portfolio equity Product year US$m Region Country Project savers & borrowers Securities market institutions smaller Fund smaller Institution building smaller savers Swaps technical partner underwriting & placement Venture capital Asia Zimbabwe
Popular passages
Page 84 - States (BEAC), the members of which are Cameroon, the Central African Republic, Chad, the Congo, Equatorial Guinea and Gabon.
Page 86 - COUNTER (OTC) 1. security that is not listed and traded on an organized exchange. 2. market in which securities transactions are conducted through a telephone and computer network connecting dealers in stocks and bonds, rather than on the floor of an exchange.
Page 36 - IFC between 1994 and 1995 to develop unit trust regulation. Now the unit trust law has been drafted and is being debated in parliament. With the institution of this vehicle, household participation is expected to rise, and the government can use this vehicle to make privatization more politically palatable.
Page 23 - Gini-coefficient. . . [Especially because changes in inequality tend to be relatively modest, we find a strong link between overall growth and a reduction in poverty. This link supports the hypothesis that economic growth benefits the poor in the large majority of cases, whereas economic decline generally hurts the poor (1996, p.
Page 51 - Leasing companies need a regulatory, legal, and fiscal environment that at least provides equal treatment compared with other sources of capital investment financing (Boxes 6.6 and 6.7).
Page 25 - Bank studyfound that, on average, state-owned enterprises in Sub-Saharan Africa had annual deficits equivalent to 3 percent of GDP between 1978 and 1991.
Page vii - This report, like others in the Lessons of Experience series, has drawn upon a full range of operational experience with financial sector transactions from across the Corporation.
Page 36 - Zimbabwe changed its securities and foreign investment regime, leading to a flood of foreign portfolio and local investment between June and December of that year.
Page vi - IFC has learned in its 27 years of advising and investing in financial institutions of all kinds in the developing world.
Page 52 - Leasing companies may also pass on tax benefits associated with their depreciation to lessees via reduced financing costs.