Latin American Capital Markets

xviiiFOCUS ON CAPITALTable IFinancial Market Development Indicators:Latin America and the Rest of the World(Percent)lateimndevelopedMiddleeast andnorthsouthandSub-Saharan TransitionIndicator America Caribbean countries Africa East Asia Africa economiesBank credit tothe private sectorover GDPOverhead costsNet interestmarginStock marketcapitalizationover GDPStock marketvalue tradedover GDP24.205.905.8017.203.8143.204.704.5029.002.6775.902.602.5065.9042.1841.002.302.7036.0012.7044.302.603.1081.6046.0014.405.505.7016.301.6626.405.605.4014.3025.90Source: The Latin American Competitiveness Report 2001-2002, World Economic Forum and Harvard Centerfor International Development.public institutions is that the dynamics of capital markets are incredibly complex andthe resources—human, financial, and institutional—are scarce.The challenges at handinclude multiple and changing goals, and various and emerging topics, stakeholders,and decisionmakers. Government leadership is essential as markets evolve in responseto new challenges and as institutions respond to new issues.Investment in human capital and regional integration are the two key componentsof the public policy strategy for capital market development The need fora skilled pool of professionals, experts, and practitioners to deal with capital marketissues requires a forward-looking attitude, given the intricacy of the issues and theircontinuous evolution. Moreover, decisions about these issues (for example, the determinationof financial standards) are made outside the substantive reach of emergingmarket countries. Governments in Latin America and the Caribbean thus face theintimidating challenge of building solid national institutions while markets becomeglobalized and decisions are made beyond national boundaries. In this respect, the taskrequires hefty resources and the benefits will be realized far in the future.Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub