A Framework for Financial Market Development

The paper proposes a framework for examining the process of financial market development. The framework, consistent with the functional view of financial system design, is anchored in studying the incentives facing the key players in financial markets-borrowers, lenders, liquidity providers, and regulators-whose actions determine whether and how markets develop. While different financial instruments embody different concessions by borrowers and lenders, the framework emphasizes the two main compromises: the tradeoffs between maturity and collateral, and between seniority and control. The framework is used to analyze the sequencing of financial market development.

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Year of publication:	2009-07-01
Authors:	Chami, Ralph ; Sharma, Sunil ; Fullenkamp, Connel
Institutions:	International Monetary Fund (IMF)
Subject:	Financial instruments \| Banking sector \| Banks \| Financial risk \| Financial sector \| Financial systems \| Risk management \| Stock markets \| bonds \| cash flows \| bond \| financial markets \| financial market \| credit \| shares \| financial market development \| collateral \| repo \| bond market \| derivative \| financial system \| counterparty \| payments \| equity market \| equity markets \| money market \| government bonds \| bond markets \| government bond \| prices \| backed bonds \| financial contracts \| pricing \| derivatives market \| bond market development \| revenue bonds \| financial intermediaries \| derivative markets \| custodian \| shareholders \| hedge \| cash flow \| financial regulation \| financial stability \| moral hazard \| money market instruments \| government bond markets \| repurchase agreement \| bond issue \| reserve requirements \| derivative product \| bond payments \| derivative contracts \| systemic risk \| derivatives markets \| obligation bonds \| corporate bond market \| purchases \| crowding out \| financial statements \| stock holders \| credit derivative \| financial economics \| stock exchanges \| financial assets \| payment system \| stock exchange \| corporate bond \| general obligation bonds \| financial institutions \| stock market \| interest rate derivatives \| new york stock exchange \| development of bond markets \| clients \| municipal bonds \| retail payments \| corporate bonds \| deposit insurance \| contractual obligations \| traditional bonds \| revenue bond \| interest rate ceilings \| financial structure \| bond indentures \| bond issuer \| bond portfolios \| confirmation \| derivative instruments \| registration \| custodial services \| compensating balances \| bond futures \| bond purchases \| cash management \| holders of bond \| developing government bond markets \| retail investors \| financial derivatives \| municipal bond \| stock index \| developing government bond \| deposit interest \| repo agreement \| bond indenture \| derivative transactions \| bond issuance \| zero-coupon bonds \| credit derivatives \| penalties \| government bond market \| bondholders \| bond contract \| financial resources \| position limits \| markets for bonds \| prepayment \| treasury bonds \| liquidity support \| municipal revenue bonds \| pools \| close out \| issuance of revenue bonds \| secondary bond market \| financial liberalization \| stock issuance \| coupon bonds \| derivative securities \| foreign exchange derivatives \| private bonds \| financial services \| international financial system \| asset markets \| financial dependence \| segregation

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Extent:	application/pdf
Series:	IMF Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	The text is part of a series IMF Working Papers Number 09/156 5 pages long
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008528687