The banking crisis in Chile in 1981-83 was widespread - representing about 60 percent of the banking system's total portfolio. The crisis arose because of macroeconomic problems and was exacerbated by unsound financial practices. The government was faced with two extreme solutions: to let...

Programs to direct credit to industry can be uniquely beneficial if 1) the purpose of government credit is to relax borrowing constraints on firms, as an end in itself, or (2) other government objectives can best be achieved by relaxing firms'borrowing constraints (in which case, product and...

In universal banking, large banks operate extensive networks of branches, provide many different services, hold several claims on firms (including equity and debt), and participate directly in the corporate governance of firms that rely on the banks for funding or as insurance underwriters. In...

This paper describes how Latin America and the Caribbean has been integrating financially with countries in the North and South since the 2000s. The paper shows that the region is increasingly more connected with the rest of the world, even relative to gross domestic product. The region's...

This paper studies channels through which well-known benchmark indexes impact asset allocations and capital flows across countries. The study uses unique monthly micro-level data of benchmark compositions and mutual fund investments during 1996-2012. Benchmarks have important effects on equity...

Developing countries are trying to develop long-term financial markets and institutional investors are expected to play a key role. This paper uses unique evidence on the universe of institutional investors from the leading case of Chile to study to what extent mutual funds, pension funds, and...

This paper documents the major trends in financial development in Asia since the early 1990s and the spillovers to firms. It compares Asia with advanced and emerging countries and uses both aggregate and disaggregate indicators. Financial systems in Asia remain less developed than in advanced...

This paper studies the extent to which firms in China and India use capital markets to obtain financing and grow. Using a unique data set on domestic and international capital raising activity and firm performance, it finds that the expansion of financial market activity since the 1990s has been...

This paper provides the first comprehensive documentation of how firms use domestic and international corporate bond markets. Debt issues in domestic and international markets have different characteristics, not explained by differences across firms or countries. International issues tend to be...

Emerging economies have tried to promote long-term debt because it reduces maturity mismatches and the probability of crises. This paper uses unique evidence from the leading case of Chile to study to what extent there is domestic demand for long-term instruments. The authors analyze monthly...