Latin American Capital Markets

538 FOCUS ON CAPITALpolitics (continued)foreign market access, 55harmonization of market rules, 168human capital development, 464,466,467independence of standard-setting bodies,222information dissemination, 182instability in Latin America and Caribbean,415-16,426,427interest groups and trade openness, 6leadership to institute reforms, 27-28and market declines, 13regional market integration, 206-7sabotaging of structural reforms, 105SME role, 393Pomerleano, Michael, 488pooling-of-interest method, 224portfolio investmentcompetition among institutional investors,142-43vs. direct investment, 7,73in Latin America, 12liberalization of requirements, 141^2margin measurement systems, 365POSIT, 50-51poverty, SME effect on, 393preferred shares, 21, IIIprice discovery, 339^0, 359price support programs and derivatives, 345prices and quotesaccounting method effects, 215asset price volatility and crossoverinvesting, 13capital prices, 93components of, 216derivatives markets, 335, 339, 340, 344,355, 364-65, 381regional market integration, 180-82transparency of, 348, 350-51, 358-60primary dealers, bond markets, 311,313-14primary markets, 22, 308, 310-14, 329,507-8Primex, 51principal/agent conflict and corporategovernance, 438principle- vs. rule-based accounting systems,221-25Principles of Corporate Governance (OECD),439,460-61private placements financing, 399private sectorcapital markets role, 97, 105corporate governance reform role, 445,446-59financial guarantees for, 510-11human capital development, 466,469infrastructure improvement role, 245-46market development role, 509-10ownership of reforms, 492See also capital marketsprivatizationbenefits for developing economies, 109capital markets environment, 160corporate bond market, 324-25demutualization of exchanges, 269,285,288as essential to market viability, 490and Latin American markets, 14,20,105-6motives for, 16and public debt decline, 7social security, 122-23productivity, 97, 105, 165,392-93professional associationsBrazil, 254-55human capital development, 469,471-72and public sector institutions, 265regional development, 481,482professionals, marketdeveloped markets, 469-72,473ethical issues, 418-19,422,426,427framework for development, 465-69Latin America and Caribbean, 472-83need to address, 463-65See also institutional investors;intermediaries, marketproprietary futures, 369prospectus requirements and Internet trading,76protected industries, integration costs, 162protection of market usersderivatives markets, 362, 367and Internet, 75,81-83and market freedom, 429regulation, 107-8See also shareholder protectionprotectionism in market integration, 162, 169,174-75Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pub