Latin American Capital Markets

28 KENROY DOWERS, FELIPE GOMEZ-ACEBO, AND PIETRO MASCIcess. However, different from the past, it is crucial that government understands thatcapital market development is not the summation of various actions, but requires aholistic approach to be pursued with a long-term view and perseverance.Implicit in the strategy is the potential role for international financial institutionsto support the development of capital markets.These institutions can foster andfacilitate the articulation of a vision of the role of capital markets as an appropriatecomponent of public policy. Once each country reaches political consensus and clarifiesthe role of capital markets, further support could be directed to developing theregulatory environment. At the same time, international financial institutions couldprovide support for the goal of moving toward regional capital market integration andfor initiatives that seek to harmonize practices in subregions.Integration of Latin American and Caribbean markets and/or integration witha large global block (for example, as in the case of Mexico with the United States) arebecoming the trademark for the success of emerging markets. In addition, the tradebenefits of integration allow economic convergence and a reduction of the cost ofcapital, which lead to increased competitiveness.hhhhhhhhhhhhhhhhhhhAllen, Franklin, and Gale Douglas. 2000. Comparing Financial Systems. Cambridge, Massachusetts:MIT Press.AI-Yousif, Yousif Khalifa. 2002. Financial Development and Economic Growth: Anotherlook at the Evidence from Developing Countries. Review of Financial Economies.Annamali, N. 2001. Small Financial Systems: Regulatory Unions as a Way Forward Washington,DC.: World BankBank for International Settlements. 2001. Electronic Finance: A New Perspective andChallenges. BIS Papers No. 7, Basle.Barro R. 1991. Economic growth in a cross-sector of countries. The Journal ofEconomics.Barth, James R., Gerard Caprio Jr, and Ross Levine. 2000. Banking Systems around theWorld: Do Regulation and Ownership Affect Performance and Stability? Milken Institute,World Bank and University of Minnesota.BeckThorsten, and Ross Levine. 2001. Stock Markets, Bonks, and Growth: Correlation orCausality. Washington, DC.: World BankCopyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub