Latin American Capital Markets

DEVELOPING BOND MARKETS: A COMPREHENSIVE VIEW 299Figure 10-1 | Depth of Domestic Capital Marketsand Per Capita GDP, SelectedCountries, December 2000Source: IDB based on FIBV, OECD, and BIS.ginning of the process, when they have to design a comprehensive and strategic planfor capital and bond market development.The ministry of finance has to coordinatewith government agencies and bodies to ensure that the development process andthe government's policies are consistent over time. This is especially important becausein some stages of the process conflicts could arise; for example, the tax authoritymay want to raise more revenues from the financial system, and the monetaryand economic authorities might aim at the bond market development process.Therefore,the ministry of finance must ensure the proper sequencing, make better use ofthe different synergies, and coordinate relevant agencies. Institutional weaknesses ariseas a consequence of lack of coordination; therefore, from the early stages of theprocess, it is essential to establish proper management in order to achieve a comprehensivedevelopment process.The ministry of finance, as a leader of the process,should build a dialogue with the market participants to get feedback on its actionsand policies. The developer and coordinator must have the comprehensive perspectiveof the complex network of market components and their interactions in orderto design policies and initiatives. In fact, it is fundamental that investors, infrastructure,regulation, supply, government agencies, intermediaries, and other market players havea role in the strategic market development plan.Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub