Fostering Capital Markets in a Bank-based Financial System: A Review of Major Conceptual Issues
Takagi, Shinji | June 2002
Abstract
The paper presents a review of major conceptual issues as a framework in which to conceptualize the rationales and strategies for fostering capital markets in a largely bank-based financial system. As elsewhere in the developing world, the relative underdevelopment of capital markets in developing Asia can be attributed to inadequate market and legal infrastructure, which, in the presence of informational problems, raises the cost of external finance. In such an environment, bank finance is often a less costly means of external finance because it can minimize informational problems by establishing a long-term monitoring relationship with borrowers. On the other hand, the benefits of capital market finance rise with economic development, which tends to increase the complexity and dispersion of information held in the economy. Price signals provided by market finance can lead to a better allocation of resources by allowing better investment and saving decisions. With the passage of time, an equity market will become particularly beneficial as a means of financing new and complex economic activities, as equity finance does not require fixed assets and can better reward risk taking activities. The paper concludes by discussing several conceptual issues that are important in designing an optimal financial structure.
Citation
Takagi, Shinji. 2002. Fostering Capital Markets in a Bank-based Financial System: A Review of Major Conceptual Issues. © Asian Development Bank. http://hdl.handle.net/11540/5404.Keywords
Urban Development Finance
Trade Finance
Small Business Finance
Rural Finance
Roundtable on International Trade and Finance
Regional Development Finance
Public Service Finance
Public Finance
Project Finance
Private Finance
Nonbank Financing
Non-Bank Financial Institutions
Municipal Finance
Local Government Finance
Local Currency Financing
Limited Resource Financing
International Financial Institutions
Infrastructure Financing
Industrial Finance
Government Financial Institutions
Government Finance
Financing of Infrastructure
Financial Sector Development
Financial Regulation
Taxation
Public Accounting
National Budget
Municipal Bonds
Local Government
Local Taxes
International Monetary Relations
International Financial Market
International Banking
Central Banks
Business Financing
Capital Resources
Budgetary Policy
Capital Needs
Corporate Divestiture
Capital Instruments
Pension Funds
Insurance Companies
Banks
Portfolio Management
Fiscal Administration
Economics of Education
Development Banks
Use tax
Taxing power
State of taxation
Tax-sales
Tax revenue estimating
Tax planning
Spendings tax
Special assessments
Tax administration and procedure
Sales tax
Real property and taxation
Progressive taxation
Effect of taxation on land use
Effect of taxation on labor supply
Intergovernmental tax relations
Inheritance and transfer tax
Energy tax
Show allCollapse
Citable URI
http://hdl.handle.net/11540/5404Metadata
Show full item recordUsers also downloaded
-
The Critical Importance of Early Grade Reading and Assessment Working Papers:December 2014
Education Sector Analytical and Capacity Development Partnership (ACDP) (Education Sector Analytical and Capacity Development Partnership (ACDP), 2015-01-15)Research analyzing the link between dropout and the literacy skills of 4,000 students in the United States found that students who are unable to read proficiently by the end of the third grade are four times more likely to leave school without a diploma than proficient readers. Research also suggests that poor readers are more likely to experience behavioural and social problems in subsequent grades ...Research analyzing the link between dropout and the literacy skills of 4,000 students in the United States found that students who are unable to read proficiently by the end of the third grade are four times more likely to leave school without a diploma ... -
Utilizing the Multiple Mirror Technique to Assess the Quality of Cambodian Trade Statistics
Hamanaka, Shintaro (Asian Development Bank, 2011-10-01)This paper assesses the quality of Cambodia’s export and import statistics by comparing them with the statistics of its trade partners. The paper identifies inaccuracies in trade statistics caused by two types of misclassifications: commodity misclassification and direction misclassification. We will thoroughly examine products that are misclassified as different (but similar) products as well as ...This paper assesses the quality of Cambodia’s export and import statistics by comparing them with the statistics of its trade partners. The paper identifies inaccuracies in trade statistics caused by two types of misclassifications: commodity ... -
Regionalism Cycle in Asia (-Pacific): A Game Theory Approach to the Rise and Fall of Asian Regional Institutions
Hamanaka, Shintaro (Asian Development Bank, 2010-02-01)"Despite a commonplace view that Asian regionalism lacks institutions, Asia, in fact, is full of regional institutions and frameworks in various forms. The rise and fall of regional institutions in Asia is an extremely dynamic process. Using a game theory approach, this paper hypothesizes that the dynamic nature of Asian regionalism can be explained by a ""regionalism cycle."" The institutional ..."Despite a commonplace view that Asian regionalism lacks institutions, Asia, in fact, is full of regional institutions and frameworks in various forms. The rise and fall of regional institutions in Asia is an extremely dynamic process. Using a game ...