Financial sector development (original) (raw)
Financial sector development in developing countries and emerging markets is part of the private sector development strategy to stimulate economic growth and reduce poverty.The Financial sector is the set of institutions, instruments, and markets. It also includes the legal and regulatory framework that permit transactions to be made through the extension of credit. Fundamentally, financial sector development concerns overcoming “costs” incurred in the financial system. This process of reducing costs of acquiring information, enforcing contracts, and executing transactions results in the emergence of financial contracts, intermediaries, and markets. Different types and combinations of information, transaction, and enforcement costs in conjunction with different regulatory, legal and tax sy
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| dbo:abstract | Financial sector development in developing countries and emerging markets is part of the private sector development strategy to stimulate economic growth and reduce poverty.The Financial sector is the set of institutions, instruments, and markets. It also includes the legal and regulatory framework that permit transactions to be made through the extension of credit. Fundamentally, financial sector development concerns overcoming “costs” incurred in the financial system. This process of reducing costs of acquiring information, enforcing contracts, and executing transactions results in the emergence of financial contracts, intermediaries, and markets. Different types and combinations of information, transaction, and enforcement costs in conjunction with different regulatory, legal and tax systems have motivated distinct forms of contracts, intermediaries and markets across countries in different times. The five key functions of a financial system in a country are: (i) information production ex ante about possible investments and capital allocation; (ii) monitoring investments and the exercise of corporate governance after providing financing; (iii) facilitation of the trading, diversification, and management of risk; (iv) mobilization and pooling of savings; and (v) promoting the exchange of goods and services. Financial sector development takes place when financial instruments, markets, and intermediaries work together to reduce the costs of information, enforcement and transactions. A solid and well-functioning financial sector is a powerful engine behind economic growth. It generates local savings, which in turn lead to productive investments in local business. Furthermore, effective banks can channel international streams of private remittances. The financial sector therefore provides the rudiments for income-growth and job creation. (en) |
| dbo:wikiPageExternalLink | https://web.archive.org/web/20120926233343/http:/econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTGLOBALFINREPORT/0,,menuPK:8816192~pagePK:64168176~piPK:64168140~theSitePK:8816097,00.html http://ibisonline.net/En/Policy_Dialogue/TenYearFrameworkAndStrategies.pdf/ |
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| dbo:wikiPageWikiLink | dbr:Capital_accumulation dbr:Private_sector_development dbr:Deposit_account dbr:Poverty_reduction dbr:Contract dbr:Emerging_markets dbc:International_development dbr:Credit_(finance) dbr:Daron_Acemoglu dbr:Economic_growth dbr:Financial_crisis_of_2007–2008 dbr:Financial_market dbr:Asian_Institute_of_Finance dbr:Assets dbr:Access_to_finance dbr:Economic_development dbr:Porfirio_Díaz dbr:Financial_institution dbr:Financial_instrument dbr:Financial_intermediary dbr:Financial_regulation dbr:Financial_system dbr:Financial_transaction dbr:Risk_management dbr:Shock_(economics) dbr:Ex-ante dbr:Remittances dbr:Financial_sector dbr:Small_and_medium_enterprise |
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| gold:hypernym | dbr:Part |
| rdfs:comment | Financial sector development in developing countries and emerging markets is part of the private sector development strategy to stimulate economic growth and reduce poverty.The Financial sector is the set of institutions, instruments, and markets. It also includes the legal and regulatory framework that permit transactions to be made through the extension of credit. Fundamentally, financial sector development concerns overcoming “costs” incurred in the financial system. This process of reducing costs of acquiring information, enforcing contracts, and executing transactions results in the emergence of financial contracts, intermediaries, and markets. Different types and combinations of information, transaction, and enforcement costs in conjunction with different regulatory, legal and tax sy (en) |
| rdfs:label | Financial sector development (en) |
| owl:sameAs | freebase:Financial sector development wikidata:Financial sector development https://global.dbpedia.org/id/4jc8B |
| prov:wasDerivedFrom | wikipedia-en:Financial_sector_development?oldid=1119002666&ns=0 |
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