A Survey of Government Regulation and Intervention in Financial Markets
There has been renewed focus on financial systems, especially in the light of recent literature that documents a positive and robust relationship between development of financial systems and economic growth. Irrespective of how financial developmen...
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| Format: | Publication |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2005/01/5847273/survey-government-regulation-intervention-financial-markets http://hdl.handle.net/10986/7326 |
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okr-10986-7326 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCESS TO INFORMATION ACCOUNTABILITY ACCOUNTING ACCOUNTING STANDARDS ALLOCATION OF CAPITAL ALLOCATION OF RESOURCES AUTHORITY AVERAGE LEVEL BANK LENDING BANK REGULATION BANKING INDUSTRY BANKING SECTOR BANKING SERVICES BANKRUPTCY BANKRUPTCY LAWS BANKRUPTCY PROCEEDINGS BORROWING BORROWING CONSTRAINTS BUSINESS ENVIRONMENT CAPITAL MARKETS CAPITALIZATION CITIZENS CIVIL LAW COMMON LAW COMPETITIVE MARKETS CONSTITUENCIES CONSTITUTION CONSUMER PROTECTION CONTRACT ENFORCEMENT CORPORATE GOVERNANCE CORPORATE SCANDALS CORRUPTION COST OF CAPITAL DEBT DEBT STRUCTURE DEPOSIT INSURANCE DEVELOPED COUNTRIES DEVELOPMENT BANKS DISCLOSURE DISTRESSED BANKS DISTRIBUTION OF INCOME ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS EMPIRICAL EVIDENCE EMPIRICAL STUDIES ENACTMENT ENFORCEMENT OF LAW EQUITY MARKETS EXPLOITATION FACTORING FINANCIAL ASSETS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL REFORM FINANCIAL SECTOR FINANCIAL SYSTEM FINANCIAL SYSTEMS FISCAL FOREIGN BANKS FOREIGN DEBT FOREIGN INVESTORS FOREIGN OWNERSHIP GOOD GOVERNANCE GOVERNANCE ENVIRONMENT GOVERNANCE REFORM GOVERNANCE REFORMS GOVERNMENT INTERVENTION INCOME DISTRIBUTION INCOME INEQUALITY INEQUALITY INFLATION INFORMATION ASYMMETRIES INSOLVENCY INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL INVESTORS INSURANCE INSURANCE INDUSTRY INTANGIBLE ASSETS INTEREST RATES INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL ORGANIZATIONS INVESTMENT CLIMATE JUDICIARY LAWS LEGAL INSTITUTION LEGAL INSTITUTIONS LEGAL ORIGINS LEGAL PROTECTION LEGAL REFORM LEGAL SYSTEM LEGALITY LEGISLATIVE CHANGES LEGISLATIVE REFORM LENDING INSTITUTIONS LOWER HOUSE MARKET POWER MARKET VALUE MICROFINANCE MIGRATION MONETARY ECONOMICS MUTUAL FUNDS NATIONAL INCOME PER CAPITA INCOME POLICY IMPLICATIONS POLITICAL ECONOMY POVERTY LINE PRIVATIZATION PRODUCTIVITY PROPERTY RIGHTS PRUDENTIAL REGULATIONS PUBLIC INFORMATION RATING AGENCIES REVERSE CAUSALITY RISK MANAGEMENT RULE OF LAW SAVINGS SECURITIZATION SHORT-TERM DEBT STOCK EXCHANGES STOCK MARKETS SYSTEMIC BANKING CRISES TAX AUTHORITIES TAXATION TRADE SHOCKS TRANSPARENCY VOTING |
| spellingShingle |
ACCESS TO INFORMATION ACCOUNTABILITY ACCOUNTING ACCOUNTING STANDARDS ALLOCATION OF CAPITAL ALLOCATION OF RESOURCES AUTHORITY AVERAGE LEVEL BANK LENDING BANK REGULATION BANKING INDUSTRY BANKING SECTOR BANKING SERVICES BANKRUPTCY BANKRUPTCY LAWS BANKRUPTCY PROCEEDINGS BORROWING BORROWING CONSTRAINTS BUSINESS ENVIRONMENT CAPITAL MARKETS CAPITALIZATION CITIZENS CIVIL LAW COMMON LAW COMPETITIVE MARKETS CONSTITUENCIES CONSTITUTION CONSUMER PROTECTION CONTRACT ENFORCEMENT CORPORATE GOVERNANCE CORPORATE SCANDALS CORRUPTION COST OF CAPITAL DEBT DEBT STRUCTURE DEPOSIT INSURANCE DEVELOPED COUNTRIES DEVELOPMENT BANKS DISCLOSURE DISTRESSED BANKS DISTRIBUTION OF INCOME ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS EMPIRICAL EVIDENCE EMPIRICAL STUDIES ENACTMENT ENFORCEMENT OF LAW EQUITY MARKETS EXPLOITATION FACTORING FINANCIAL ASSETS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL REFORM FINANCIAL SECTOR FINANCIAL SYSTEM FINANCIAL SYSTEMS FISCAL FOREIGN BANKS FOREIGN DEBT FOREIGN INVESTORS FOREIGN OWNERSHIP GOOD GOVERNANCE GOVERNANCE ENVIRONMENT GOVERNANCE REFORM GOVERNANCE REFORMS GOVERNMENT INTERVENTION INCOME DISTRIBUTION INCOME INEQUALITY INEQUALITY INFLATION INFORMATION ASYMMETRIES INSOLVENCY INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL INVESTORS INSURANCE INSURANCE INDUSTRY INTANGIBLE ASSETS INTEREST RATES INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL ORGANIZATIONS INVESTMENT CLIMATE JUDICIARY LAWS LEGAL INSTITUTION LEGAL INSTITUTIONS LEGAL ORIGINS LEGAL PROTECTION LEGAL REFORM LEGAL SYSTEM LEGALITY LEGISLATIVE CHANGES LEGISLATIVE REFORM LENDING INSTITUTIONS LOWER HOUSE MARKET POWER MARKET VALUE MICROFINANCE MIGRATION MONETARY ECONOMICS MUTUAL FUNDS NATIONAL INCOME PER CAPITA INCOME POLICY IMPLICATIONS POLITICAL ECONOMY POVERTY LINE PRIVATIZATION PRODUCTIVITY PROPERTY RIGHTS PRUDENTIAL REGULATIONS PUBLIC INFORMATION RATING AGENCIES REVERSE CAUSALITY RISK MANAGEMENT RULE OF LAW SAVINGS SECURITIZATION SHORT-TERM DEBT STOCK EXCHANGES STOCK MARKETS SYSTEMIC BANKING CRISES TAX AUTHORITIES TAXATION TRADE SHOCKS TRANSPARENCY VOTING Klapper, Leora Zaidi, Rida A Survey of Government Regulation and Intervention in Financial Markets |
| description |
There has been renewed focus on
financial systems, especially in the light of recent
literature that documents a positive and robust relationship
between development of financial systems and economic
growth. Irrespective of how financial development is
measured, there is a clear causal relationship with per
capita income. King and Levine (1993) was the first paper
that examined economic growth for a dataset that spans from
1960-1989 and found predictive power of financial systems in
growth. Another richer dataset from 1960-1995 reinforces the
existing relationship between finance and growth, while
taking into account the issue of reverse causality (Levine,
Loayza and Beck 2000). The idea of reverse causality is that
it is also possible that economic growth may encourage
development of financial systems and these results may
reflect reverse feedback rather than any effect of finance
on growth. The authors use the recent discovery that systems
with English common law tend to have deeper financial
systems, to employ legal origins as an effective instrument.
Their results rule out the thesis that the relationship
between finance and growth is driven by reverse causality.
The policy prescription the authors provide is that
developing countries should not attempt to engineer credit
expansion and financial system development. Instead they
should create an environment conducive for participation of
individuals in the market system, for financial system to
deliver services effectively and functions most required by
an economy are provided by finance (World Bank 2001). Any
policies where government actively seeks to influence
financial market outcomes are likely to have adverse
effects. The ensuing discussion in this report highlights
the pervasive negative influence of the government in
finance, in most emerging economies. It underscores and
points out cases of efficiently performing financial systems
in countries where government has limited its involvement to
developing a sound business environment. |
| format |
Publications & Research :: Publication |
| author |
Klapper, Leora Zaidi, Rida |
| author_facet |
Klapper, Leora Zaidi, Rida |
| author_sort |
Klapper, Leora |
| title |
A Survey of Government Regulation and Intervention in Financial Markets |
| title_short |
A Survey of Government Regulation and Intervention in Financial Markets |
| title_full |
A Survey of Government Regulation and Intervention in Financial Markets |
| title_fullStr |
A Survey of Government Regulation and Intervention in Financial Markets |
| title_full_unstemmed |
A Survey of Government Regulation and Intervention in Financial Markets |
| title_sort |
survey of government regulation and intervention in financial markets |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2005/01/5847273/survey-government-regulation-intervention-financial-markets http://hdl.handle.net/10986/7326 |
| _version_ |
1764399442591481856 |
| spelling |
okr-10986-73262021-04-23T14:02:28Z A Survey of Government Regulation and Intervention in Financial Markets Klapper, Leora Zaidi, Rida ACCESS TO INFORMATION ACCOUNTABILITY ACCOUNTING ACCOUNTING STANDARDS ALLOCATION OF CAPITAL ALLOCATION OF RESOURCES AUTHORITY AVERAGE LEVEL BANK LENDING BANK REGULATION BANKING INDUSTRY BANKING SECTOR BANKING SERVICES BANKRUPTCY BANKRUPTCY LAWS BANKRUPTCY PROCEEDINGS BORROWING BORROWING CONSTRAINTS BUSINESS ENVIRONMENT CAPITAL MARKETS CAPITALIZATION CITIZENS CIVIL LAW COMMON LAW COMPETITIVE MARKETS CONSTITUENCIES CONSTITUTION CONSUMER PROTECTION CONTRACT ENFORCEMENT CORPORATE GOVERNANCE CORPORATE SCANDALS CORRUPTION COST OF CAPITAL DEBT DEBT STRUCTURE DEPOSIT INSURANCE DEVELOPED COUNTRIES DEVELOPMENT BANKS DISCLOSURE DISTRESSED BANKS DISTRIBUTION OF INCOME ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMICS EMPIRICAL EVIDENCE EMPIRICAL STUDIES ENACTMENT ENFORCEMENT OF LAW EQUITY MARKETS EXPLOITATION FACTORING FINANCIAL ASSETS FINANCIAL DEVELOPMENT FINANCIAL INSTITUTIONS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL REFORM FINANCIAL SECTOR FINANCIAL SYSTEM FINANCIAL SYSTEMS FISCAL FOREIGN BANKS FOREIGN DEBT FOREIGN INVESTORS FOREIGN OWNERSHIP GOOD GOVERNANCE GOVERNANCE ENVIRONMENT GOVERNANCE REFORM GOVERNANCE REFORMS GOVERNMENT INTERVENTION INCOME DISTRIBUTION INCOME INEQUALITY INEQUALITY INFLATION INFORMATION ASYMMETRIES INSOLVENCY INSTITUTIONAL ARRANGEMENTS INSTITUTIONAL INVESTORS INSURANCE INSURANCE INDUSTRY INTANGIBLE ASSETS INTEREST RATES INTERNATIONAL ACCOUNTING STANDARDS INTERNATIONAL ORGANIZATIONS INVESTMENT CLIMATE JUDICIARY LAWS LEGAL INSTITUTION LEGAL INSTITUTIONS LEGAL ORIGINS LEGAL PROTECTION LEGAL REFORM LEGAL SYSTEM LEGALITY LEGISLATIVE CHANGES LEGISLATIVE REFORM LENDING INSTITUTIONS LOWER HOUSE MARKET POWER MARKET VALUE MICROFINANCE MIGRATION MONETARY ECONOMICS MUTUAL FUNDS NATIONAL INCOME PER CAPITA INCOME POLICY IMPLICATIONS POLITICAL ECONOMY POVERTY LINE PRIVATIZATION PRODUCTIVITY PROPERTY RIGHTS PRUDENTIAL REGULATIONS PUBLIC INFORMATION RATING AGENCIES REVERSE CAUSALITY RISK MANAGEMENT RULE OF LAW SAVINGS SECURITIZATION SHORT-TERM DEBT STOCK EXCHANGES STOCK MARKETS SYSTEMIC BANKING CRISES TAX AUTHORITIES TAXATION TRADE SHOCKS TRANSPARENCY VOTING There has been renewed focus on financial systems, especially in the light of recent literature that documents a positive and robust relationship between development of financial systems and economic growth. Irrespective of how financial development is measured, there is a clear causal relationship with per capita income. King and Levine (1993) was the first paper that examined economic growth for a dataset that spans from 1960-1989 and found predictive power of financial systems in growth. Another richer dataset from 1960-1995 reinforces the existing relationship between finance and growth, while taking into account the issue of reverse causality (Levine, Loayza and Beck 2000). The idea of reverse causality is that it is also possible that economic growth may encourage development of financial systems and these results may reflect reverse feedback rather than any effect of finance on growth. The authors use the recent discovery that systems with English common law tend to have deeper financial systems, to employ legal origins as an effective instrument. Their results rule out the thesis that the relationship between finance and growth is driven by reverse causality. The policy prescription the authors provide is that developing countries should not attempt to engineer credit expansion and financial system development. Instead they should create an environment conducive for participation of individuals in the market system, for financial system to deliver services effectively and functions most required by an economy are provided by finance (World Bank 2001). Any policies where government actively seeks to influence financial market outcomes are likely to have adverse effects. The ensuing discussion in this report highlights the pervasive negative influence of the government in finance, in most emerging economies. It underscores and points out cases of efficiently performing financial systems in countries where government has limited its involvement to developing a sound business environment. 2012-06-06T19:58:39Z 2012-06-06T19:58:39Z 2005 http://documents.worldbank.org/curated/en/2005/01/5847273/survey-government-regulation-intervention-financial-markets http://hdl.handle.net/10986/7326 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Publication |