Strengthening Financial Systems in Developing Countries : The Case for Incentives-Based Financial Sector Reforms
An international cooperative effort has been focused on the need to reduce financial fragility and systemic risks in global financial markets. Work is proceeding in three different areas: enhancing financial market transparency, improving the inter...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/484681468155968806/Strengthening-financial-systems-in-developing-countries-the-case-for-incentives-based-financial-sector-reforms http://hdl.handle.net/10986/27109 |
| Summary: | An international cooperative effort has
been focused on the need to reduce financial fragility and
systemic risks in global financial markets. Work is
proceeding in three different areas: enhancing financial
market transparency, improving the international financial
architecture, and strengthening financial systems.
Strengthening financial systems (the focus of this paper)
means cooperating to promote principles and sound practices
for financial stability through development of
well-functioning financial systems and market discipline.
Financial sector reform and development is much more than
setting rules, articulating standards, approving
legislation, and creating new institutions. All are
important but ultimately behavior must be changed if there
is to be meaningful and lasting financial reform. For that
reason, this paper emphasizes the role of incentives to
induce appropriate behavior. Developing countries have made
important progress toward improved financial supervision in
the past few years. Reforming financial sectors is a lengthy
and complex process of institution building and incentive
reorientation, whose success requires full ownership of, and
participation in, the process by society and its government. |
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