Pension Reform and Capital Market Development : "Feasibility" and "Impact" Preconditions
The link between pension reform, and capital market development, has become a perennial question, raised every time the potential benefits, and pre-conditions of pension reform are discussed. The author asks two questions. First, what are the basic...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2000/08/693246/pension-reform-capital-market-development-feasibility-impact-preconditions http://hdl.handle.net/10986/19799 |
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okr-10986-197992021-04-23T14:03:46Z Pension Reform and Capital Market Development : "Feasibility" and "Impact" Preconditions Vittas, Dimitri AGENCY PROBLEMS ASSET MANAGEMENT ASSET MANAGERS ASSETS BANK DEPOSITS BOND MARKETS BONDS BUDGET DEFICITS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS COMMERCIAL BANKS COMPETITIVE BIDDING CONTRACTUAL SAVINGS CORPORATE GOVERNANCE CORPORATE MANAGEMENT DEBT DEBT INSTRUMENTS DEREGULATION DERIVATIVE PRODUCTS DIRECT INVESTMENT DISABILITY INSURANCE DISABILITY PENSIONS DOMESTIC MARKETS ECONOMIC INTEGRATION EQUITY CAPITAL EXTERNAL ASSET MANAGERS FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL RESOURCES FINANCIAL SECTOR GDP GOVERNMENT BONDS INDEXATION INDIVIDUAL INVESTORS INFLATION INSTITUTIONAL DEVELOPMENT INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INSURANCE MARKETS INVESTMENT BANKS INVESTMENT DECISIONS INVESTMENT PERFORMANCE INVESTOR PROTECTION LIFE INSURANCE LIFE INSURANCE COMPANIES LIFETIME EARNINGS LIQUIDITY MACROECONOMIC STABILITY MONOPOLIES MUTUAL FUNDS NORMAL RETIREMENT AGE PAYROLL TAXES PENSION FUND PENSION FUNDS PENSION PLANS PENSION REFORM PENSION REFORMS PENSION SCHEMES PENSION SYSTEMS PENSIONERS POSITIVE EFFECTS PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE PILLAR PRIVATIZATION PROVIDENT FUNDS RATING AGENCIES REGULATORY FRAMEWORK REGULATORY STRUCTURES RETIREMENT SECURITIES SECURITIES MARKETS SIDE EFFECTS SOCIAL SECURITY SOCIAL SECURITY SYSTEMS SUPERVISORY AGENCY The link between pension reform, and capital market development, has become a perennial question, raised every time the potential benefits, and pre-conditions of pension reform are discussed. The author asks two questions. First, what are the basic "feasibility" pre-conditions for the successful launch of a pension reform program? And second, what are the necessary "impact" pre-conditions for the realization of the potential benefits of funded pension plans for capital market development? His main conclusion is that the feasibility pre-conditions, are not as demanding as is sometimes assumed. In contrast, the impact pre-conditions are more onerous. The most import feasibility pre-condition is a strong, and lasting commitment of the authorities to maintaining macroeconomic, and financial stability, fostering a small core of solvent, and efficient banks, and insurance companies, and creating an effective regulatory, and supervisory agency. Opening the domestic banking, and insurance markets to foreign participation, can easily fulfill the second requirement. The main impact pre-conditions include the attainment of critical mass; the adoption of conducive regulations, especially on pension fund investments; the pursuit of optimizing policies by the pension funds; and, a prevalence of pluralistic structures. The author argues that pension funds are neither necessary, nor sufficient for capital market development. Other forces, such as advances in technology, deregulation, privatization, foreign direct investment, and especially regional, and global economic integration, may be equally important. But pension funds are critical players in "symbiotic" finance, the simultaneous and mutually reinforcing presence of many important elements of modern financial systems. They can support the development of factoring, leasing, and venture capital companies, all of which specialize in financing new, and expanding small firms. 2014-08-27T21:14:40Z 2014-08-27T21:14:40Z 2000-08 http://documents.worldbank.org/curated/en/2000/08/693246/pension-reform-capital-market-development-feasibility-impact-preconditions http://hdl.handle.net/10986/19799 English en_US Policy Research Working Paper;No. 2414 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AGENCY PROBLEMS ASSET MANAGEMENT ASSET MANAGERS ASSETS BANK DEPOSITS BOND MARKETS BONDS BUDGET DEFICITS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS COMMERCIAL BANKS COMPETITIVE BIDDING CONTRACTUAL SAVINGS CORPORATE GOVERNANCE CORPORATE MANAGEMENT DEBT DEBT INSTRUMENTS DEREGULATION DERIVATIVE PRODUCTS DIRECT INVESTMENT DISABILITY INSURANCE DISABILITY PENSIONS DOMESTIC MARKETS ECONOMIC INTEGRATION EQUITY CAPITAL EXTERNAL ASSET MANAGERS FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL RESOURCES FINANCIAL SECTOR GDP GOVERNMENT BONDS INDEXATION INDIVIDUAL INVESTORS INFLATION INSTITUTIONAL DEVELOPMENT INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INSURANCE MARKETS INVESTMENT BANKS INVESTMENT DECISIONS INVESTMENT PERFORMANCE INVESTOR PROTECTION LIFE INSURANCE LIFE INSURANCE COMPANIES LIFETIME EARNINGS LIQUIDITY MACROECONOMIC STABILITY MONOPOLIES MUTUAL FUNDS NORMAL RETIREMENT AGE PAYROLL TAXES PENSION FUND PENSION FUNDS PENSION PLANS PENSION REFORM PENSION REFORMS PENSION SCHEMES PENSION SYSTEMS PENSIONERS POSITIVE EFFECTS PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE PILLAR PRIVATIZATION PROVIDENT FUNDS RATING AGENCIES REGULATORY FRAMEWORK REGULATORY STRUCTURES RETIREMENT SECURITIES SECURITIES MARKETS SIDE EFFECTS SOCIAL SECURITY SOCIAL SECURITY SYSTEMS SUPERVISORY AGENCY |
| spellingShingle |
AGENCY PROBLEMS ASSET MANAGEMENT ASSET MANAGERS ASSETS BANK DEPOSITS BOND MARKETS BONDS BUDGET DEFICITS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS COMMERCIAL BANKS COMPETITIVE BIDDING CONTRACTUAL SAVINGS CORPORATE GOVERNANCE CORPORATE MANAGEMENT DEBT DEBT INSTRUMENTS DEREGULATION DERIVATIVE PRODUCTS DIRECT INVESTMENT DISABILITY INSURANCE DISABILITY PENSIONS DOMESTIC MARKETS ECONOMIC INTEGRATION EQUITY CAPITAL EXTERNAL ASSET MANAGERS FINANCIAL ASSETS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL RESOURCES FINANCIAL SECTOR GDP GOVERNMENT BONDS INDEXATION INDIVIDUAL INVESTORS INFLATION INSTITUTIONAL DEVELOPMENT INSTITUTIONAL INVESTORS INSURANCE INSURANCE COMPANIES INSURANCE MARKETS INVESTMENT BANKS INVESTMENT DECISIONS INVESTMENT PERFORMANCE INVESTOR PROTECTION LIFE INSURANCE LIFE INSURANCE COMPANIES LIFETIME EARNINGS LIQUIDITY MACROECONOMIC STABILITY MONOPOLIES MUTUAL FUNDS NORMAL RETIREMENT AGE PAYROLL TAXES PENSION FUND PENSION FUNDS PENSION PLANS PENSION REFORM PENSION REFORMS PENSION SCHEMES PENSION SYSTEMS PENSIONERS POSITIVE EFFECTS PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE PILLAR PRIVATIZATION PROVIDENT FUNDS RATING AGENCIES REGULATORY FRAMEWORK REGULATORY STRUCTURES RETIREMENT SECURITIES SECURITIES MARKETS SIDE EFFECTS SOCIAL SECURITY SOCIAL SECURITY SYSTEMS SUPERVISORY AGENCY Vittas, Dimitri Pension Reform and Capital Market Development : "Feasibility" and "Impact" Preconditions |
| relation |
Policy Research Working Paper;No. 2414 |
| description |
The link between pension reform, and
capital market development, has become a perennial question,
raised every time the potential benefits, and pre-conditions
of pension reform are discussed. The author asks two
questions. First, what are the basic "feasibility"
pre-conditions for the successful launch of a pension reform
program? And second, what are the necessary
"impact" pre-conditions for the realization of the
potential benefits of funded pension plans for capital
market development? His main conclusion is that the
feasibility pre-conditions, are not as demanding as is
sometimes assumed. In contrast, the impact pre-conditions
are more onerous. The most import feasibility pre-condition
is a strong, and lasting commitment of the authorities to
maintaining macroeconomic, and financial stability,
fostering a small core of solvent, and efficient banks, and
insurance companies, and creating an effective regulatory,
and supervisory agency. Opening the domestic banking, and
insurance markets to foreign participation, can easily
fulfill the second requirement. The main impact
pre-conditions include the attainment of critical mass; the
adoption of conducive regulations, especially on pension
fund investments; the pursuit of optimizing policies by the
pension funds; and, a prevalence of pluralistic structures.
The author argues that pension funds are neither necessary,
nor sufficient for capital market development. Other forces,
such as advances in technology, deregulation, privatization,
foreign direct investment, and especially regional, and
global economic integration, may be equally important. But
pension funds are critical players in "symbiotic"
finance, the simultaneous and mutually reinforcing presence
of many important elements of modern financial systems. They
can support the development of factoring, leasing, and
venture capital companies, all of which specialize in
financing new, and expanding small firms. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Vittas, Dimitri |
| author_facet |
Vittas, Dimitri |
| author_sort |
Vittas, Dimitri |
| title |
Pension Reform and Capital Market Development : "Feasibility" and "Impact" Preconditions |
| title_short |
Pension Reform and Capital Market Development : "Feasibility" and "Impact" Preconditions |
| title_full |
Pension Reform and Capital Market Development : "Feasibility" and "Impact" Preconditions |
| title_fullStr |
Pension Reform and Capital Market Development : "Feasibility" and "Impact" Preconditions |
| title_full_unstemmed |
Pension Reform and Capital Market Development : "Feasibility" and "Impact" Preconditions |
| title_sort |
pension reform and capital market development : "feasibility" and "impact" preconditions |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2000/08/693246/pension-reform-capital-market-development-feasibility-impact-preconditions http://hdl.handle.net/10986/19799 |
| _version_ |
1764441427190743040 |