scholarly journals Structural Issues and Reforms in Financial (non-bank) Market in Pakistan

2002 ◽  
Vol 41 (4II) ◽  
pp. 915-928
Author(s):  
Haroon Sharif
Keyword(s):  
Financial Markets ◽  
Poverty Reduction ◽  
Large Body ◽  
Banking System ◽  
State Intervention ◽  
Market Regulation ◽  
Financial Market Regulation ◽  
Strong Point ◽  
Financial Liberalisation

A large body of research now links financial sector development, including the depth of the banking system, liquidity in capital market, and financial liberalisation to long-run growth and poverty reduction. According to a recent World Bank report,1 “As the dust settles from the great financial crises of 1997-98, the potentially disastrous consequences of weak financial markets are apparent”. The report further states that the importance of getting financial policy making right has become one of the most critical development issues in this century. In the past, there have been two extreme approaches concerning financial market regulation. One clearly supports the central role of state in the financial markets, whereas, the other sees state intervention more of a problem than as the solution. Of these two rather diverging ideologies, the International Financial Institutions (IFIs) advocate the development of market institutions, more liberalisation and lesser role of state. Pakistan has been following IFI advice in this regard. However, after the East Asian Crisis, a strong point of view has emerged that believes that in developing countries, ruling out state’s role from financial markets is unrealistic. But, the state has to play a developmental role. According to Stiglitz (1991), “governments have played a central role—whether good or ill may be debated—in the development of most of those countries which today belong among the more developed”.

The Capital Market Authority Effectiveness in the Regulation of Financial Markets perspectives from the financial sector actors

2012 ◽  
Vol 02 (11) ◽  
pp. 15-24
Author(s):  
Charles Kombo Okioga
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Capital Markets ◽  
Capital Market ◽  
Financial Regulation ◽  
International Standards ◽  
Market Regulation ◽  
Financial Market Regulation ◽  
Market Participants ◽  
New Business

Capital Market Authority in Kenya is in a development phase in order to be effective in the regulation of the financial markets. The market participants and the regulators are increasingly adopting international standards in order to make the capital markets in sync with those of developed markets. New products are being introduced and new business lines are being established. The Capital Markets Authority (Regulator) is constantly reviewing existing regulations and recommending changes to regulate the market properly. Business lines and activities are being harmonized by market participants to provide a one stop solution in order to meet the financial and securities services needs of the investors. The convergence of business lines and activities of market intermediaries gives rise to the diversity of a firm’s business operations to meet multiplicity of regulations that its activities are subject to. The methodology used in this study was designed to examine the relationship between capital markets Authority effective regulation and the performance of the financial markets. The study used correlation design, the study population consisted of 30 employees in financial institutions regulated by Capital Markets Authority and 80 investors. The study found out that effective financial market regulation has a significant relationship with the financial market performance indicated by (r=0.571, p<0.01) and (r=0.716, p≤0.01, the study recommended a further research on the factors that hinder effective financial regulation by the Capital Markets Authority.

scholarly journals A capability framework for financial market regulation

2017 ◽  
Author(s):  
Rutger Claassen
Keyword(s):  
Financial Markets ◽  
Market Failure ◽  
Capability Approach ◽  
Martha Nussbaum ◽  
Market Regulation ◽  
Financial Market Regulation ◽  
Academic Literature ◽  
Regulation Of Financial Markets ◽  
Do So ◽  
The Capability Approach

This chapter is about normative justifications for regulating markets. In leading handbooks as well as in the academic literature, a split is often made between economic justifications (based on the theory of market failure) and social justifications (mainly around considerations of paternalism and distributive justice). The chapter questions this dichotomy and calls for the development of an ethically coherent framework for market regulation. To do so, the chapter proposes to build on the capability approach, first developed by economist Amartya Sen and philosopher Martha Nussbaum. A capability approach to regulation would hold that markets should be regulated to the extent necessary for realizing a set of basic capabilities. The chapter discusses existing applications to property law and contract law and extends them into the outlines of a general theory of regulation. The final part illustrates the promises of such an approach with respect to the regulation of financial markets.

scholarly journals Reforming LIBOR and Other Financial Market Benchmarks

2015 ◽  
Vol 29 (2) ◽  
pp. 191-212 ◽  
Author(s):  
Darrell Duffie ◽  
Jeremy C. Stein
Keyword(s):  
Financial Markets ◽  
Interest Rates ◽  
Banking System ◽  
Economic Role ◽  
News Reports ◽  
Legal Risks ◽  
The Difference ◽  
The Interest Rate ◽  
Orderly Transition

LIBOR is the London Interbank Offered Rate: a measure of the interest rate at which large banks can borrow from one another on an unsecured basis. LIBOR is often used as a benchmark rate— meaning that the interest rates that consumers and businesses pay on trillions of dollars in loans adjust up and down contractually based on movements in LIBOR. Investors also rely on the difference between LIBOR and various risk-free interest rates as a gauge of stress in the banking system. Benchmarks such as LIBOR therefore play a central role in modern financial markets. Thus, news reports in 2008 revealing widespread manipulation of LIBOR threatened the integrity of this benchmark and lowered trust in financial markets. We begin with a discussion of the economic role of benchmarks in reducing market frictions. We explain how manipulation occurs in practice, and illustrate how benchmark definitions and fixing methods can mitigate manipulation. We then turn to an overall policy approach for reducing the susceptibility of LIBOR to manipulation before focusing on the practical problem of how to make an orderly transition to alternative reference rates without raising undue legal risks.

Finance and Capital in the United States, 1850–1900

1967 ◽  
Vol 27 (4) ◽  
pp. 621-624 ◽  
Author(s):  
Richard Sylla
Keyword(s):  
Nineteenth Century ◽  
Financial Markets ◽  
Gilded Age ◽  
Banking System ◽  
The United States ◽  
Antebellum Era ◽  
Long Run ◽  
Short Run ◽  
Rapid Industrialization

The connections between financial development and economic growth are drawing increased attention on many fronts. This dissertation studies ways in which the American financial system functioned to aid in the accumulation and mobilization of capital in the second half of the nineteenth century. The evolution of the banking system, by far the dominant nineteenth-century financial intermediary, is emphasized, but the role of Federal government finance is of scarcely less importance. The interrelated actions of the banks and the Treasury did much to set the tone in various financial markets during most of the period. While considerable study has been devoted to these actions and their short-run effects, much less has been written about their long-run implications. A major contention of the work is that financial strains caused by the Civil War and the various responses to these strains were accompanied by significant changes in the banking system—in its structure, the types of assets in which it dealt, and in its relations with the Treasury—all of which increased its potential for satisfying the demands placed upon it by a rapidly expanding economy. These changes helped to make capital, which may well have been the relatively scarce factor in the antebellum era, more abundant in the postwar Gilded Age, and they therefore abetted the rapid industrialization of those decades.

scholarly journals Financial Development And Growth In Middle Eastern Countries

2010 ◽  
Vol 9 (11) ◽  
Author(s):  
Mounther Barakat ◽  
Edward Waller
Keyword(s):  
Economic Growth ◽  
Financial Markets ◽  
Financial Development ◽  
Financial Intermediation ◽  
Middle Eastern ◽  
Banking System ◽  
Specific Factors ◽  
The Relationship

This paper studies the relationship between financial intermediation and economic growth in a sample of Middle Eastern countries.  The results are consistent with the hypothesis that a well-functioning banking system promotes economic growth.  Moreover, the results suggest that market-specific factors may hinder financial markets’ ability to play hypothesized roles, while enhancing the role of intermediaries.  The paper’s general conclusion is that financial development does affect economic growth.  However, market specific factors affect the magnitude and significance of this effect.  The implication is that studies should control for market-specific factors to assess the relationship between financial development and growth.

The EU Experience as a Model for the Development of a Single Financial Market Regulation in the Eurasian Economic Union (EAEU)

2019 ◽  
Vol 16 (5) ◽  
pp. 592-621 ◽  
Author(s):  
Rustam A. Kasyanov
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Financial Services ◽  
Market Regulation ◽  
Member States ◽  
Financial Market Regulation ◽  
Eurasian Economic Union ◽  
Economic Union ◽  
The Republic ◽  
The Eu

Five countries became members of the Eurasian Economic Union – an international organization of regional economic integration. The Republic of Kazakhstan, the Russian Federation, and the Republic of Belarus signed the international Treaty in the city of Astana, Kazakhstan on May 29, 2014. The Republic of Armenia and the Kyrgyz Republic acceded to the Treaty later. Harmonized regulation of financial markets should be one of the initial areas of cooperation, with the aims of creating a single financial services market within the EAEU and ensuring non-discriminatory access to the national financial markets of each of the member states. The EAEU member states have already entered into the initial stage of developing the Eurasian common market in financial services. A considerable part of the work should be carried out by a supranational financial market regulation body, which is to be established by 2025 according to the EAEU Treaty. Such financial integration in the EAEU has only been in progress for a limited time period and many of the key steps are yet to be done. The existing national-markets development level is highly non-homogeneous and is in need of further development. In such circumstances, a relevant question related to the study of foreign experience arises. European Union started to form its single financial services market in 1973, and since then it has gained certain experience in financial markets integration. This research paper is dedicated to the issue of necessity and possibility of using the EU experience in the course of the EAEU Single market development. The issue will be addressed in terms of political, legal, academic, and practical aspects. The article is of a general, theoretical legal character, which is why emphasis will be placed on legal and doctrinal questions. Special attention will be paid to an analysis of the Eurasian Economic Union Treaty and its Protocols. The work will be based on the academic research and opinions of Russian and foreign authors.

Role of Negative Interest Rates for Energy Assets Pricing in Financial Markets

2021 ◽  
pp. 107-119
Author(s):  
Ismail Ismailov ◽  
Tomonobu Senjyu
Keyword(s):  
Financial Markets ◽  
Interest Rates ◽  
World Economy ◽  
Foreign Currency ◽  
Banking System ◽  
Negative Interest Rates ◽  
The World ◽  
Energy Assets ◽  
National Banking System

The world economy strives for globalization, and most energy assets are connected with each other through correspondent banks and other mutual operations. The relevance of the topic of the thesis is due to the fact that in September 2019 a number of proposals were made to introduce the practice of negative interest rates in the national banking system due to the fact that Russian energy assets are not profitable to place in foreign currency..

The State, Informal Networks, and Financial Market Regulation in Post-Soviet Russia, 1990–2008

2015 ◽  
Vol 42 (1) ◽  
pp. 5-38 ◽  
Author(s):  
Ilja Viktorov
Keyword(s):  
Financial Markets ◽  
Institutional Development ◽  
State Regulation ◽  
Market Regulation ◽  
Informal Networks ◽  
Financial Market Regulation ◽  
Russian State ◽  
Regulation Policy ◽  
Soviet Russia ◽  
Further Development

The article examines how informal networks inside the Russian state influenced the formation and further development of the country’s financial markets during the 1990s and 2000s. The main argument is that the activities of these networks made it difficult to implement any coherent state regulation policy in the field. At the same time, rivalry between competing informal networks and different organizations contributed to institutional development and some improvements. The result was a dualist institutional structure of the Russian speculative financial markets that reproduced itself throughout the period in question. The study is based on in-depth interviews conducted at Moscow-based financial institutions.

scholarly journals The Political Economy of Financial Regulation in Advanced Industrial Democracies

2013 ◽  
Author(s):  
Richard Deeg ◽  
Walter James
Keyword(s):  
Financial Markets ◽  
Financial Market ◽  
Financial Regulation ◽  
Financial System ◽  
Capital Controls ◽  
Market Regulation ◽  
Financial Market Regulation ◽  
Bretton Woods ◽  
Advanced Economies ◽  
Financial Regulatory

The regulation of finance is central to the growth and development of every economy. Financial regulation determines the overall character of the financial system, the relationship between borrowers and savers, the allocation of capital, and the macroeconomic performance of the economy. Financial market regulation is distinct from regulation of other sectors of the economy because of the essential infrastructural role of finance—all other sectors of advanced economies depend on the financial system. Despite its enormous importance, financial regulation normally has low political salience. Except in times of crisis, most voters—and therefore politicians—have relatively little interest in the matter. This can be attributed in part to the complex and technical nature of financial markets and regulation, which relatively few people understand well. Low political salience facilitates a regulatory process that is very heavily shaped by regulators (technocrats) and the industry they regulate, with only minor direction from elected political leaders. In the long history of capitalism, bank and financial system crises have been regular occurrences. Regulation, or regulatory failure, is often seen as a cause of crises, but regulatory change is also the response. Thus any given financial regulatory regime is never settled for long. After the Great Depression, advanced capitalist economies introduced highly restrictive financial regulatory regimes designed to minimize systemic risk from bank failures. In the postwar period, restrictive regulatory regimes were combined with capital controls that limited international movements of capital. The postwar Bretton Woods international monetary regime stabilized fixed exchange rates through such controls and, when necessary, lending by the International Monetary Fund (IMF) to countries that could not pay for their external debts. Starting with the collapse of the Bretton Woods regime in the early 1970s, all the advanced economies started liberalizing financial market regulation and removing capital controls as part of a broader shift toward a neoliberal economic philosophy. These deregulatory measures brought about a dramatic transformation of domestic financial systems and the reemergence of a dynamic and rapidly growing international financial market. Such dynamic and internationalized financial market was, in large part, the root cause of the early-21st-century financial crisis. The Great Financial Crisis of 2008 precipitated widespread review and revision of financial market regulations at both the domestic and international levels. These revisions include a shift from private self-regulation to state-driven regulation of financial markets, the centralization of regulation at the level of the European Union, and a closer cooperation between states in forging international regulatory standards. Nonetheless, despite the dramatic growth of the international financial market and transnational efforts to coordinate regulation, financial regulation remains overwhelmingly a domestic affair.

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