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The importance of financial systems as a key factor in economic growth has become
even more pronounced in recent years, yet there is still surprisingly little agreement
about how to define and measure their development. To address this gap, the World
Economic Forum has undertaken an ongoing initiative that aims to provide business
The Financial Development Report 2009, the second edition since its first publication in
2008, measures and analyzes the factors enabling the development of financial systems
in 55 economies. The Report aims to provide a comprehensive means for countries to
benchmark the various aspects of their financial systems and establish priorities for
improvement. It is published annually so that countries can continue to benchmark
themselves and track their progress over time.
The Report presents the rankings of the second Financial Development Index (FDI)
developed by the World Economic Forum in collaboration with the academic community,
multilateral organizations, and business leaders. The FDI assembles a vast amount of
data to create a holistic assessment of the different aspects of complex financial
systems, including the institutional environment, the business environment, financial
stability, banks, capital markets, and overall capital availability and access. Essay
contributions elaborate on specific effects of the current crisis on emerging markets
and on the achievement of the Millennium Development Goals. The Report contains
detailed profiles for the 55 economies covered by the FDI this year. Data used in the
calculation of the Index are fully annotated and clearly presented.
Written in a nontechnical language and style, the Report appeals to a large audience of
policymakers, business leaders, academics, and different organizations of civil society. It
2009
aims to provide policymakers with a balanced perspective as to which aspects of their
country’s financial system are most important and the ability to empirically calibrate this
view relative to other countries.
The Financial
Development Report
ISBN-13: 978-92-95044-27-2
Part 1.r3 10/14/09 2:21 PM Page i
The terms country and nation as used in World Economic Forum USA Inc.
this report do not in all cases refer to a
territorial entity that is a state as understood Copyright © 2009
by international law and practice. The terms by the World Economic Forum USA Inc.
cover well-defined, geographically self-
contained economic areas that may not be All rights reserved. No reproduction, copy or
states but for which statistical data are main- transmission of this publication may be made
tained on a separate and independent basis. without written permission.
ISBN-10: 92-95044-27-4
ISBN-13: 978-92-95044-27-2
Contents
Preface ix
by Klaus Schwab
Foreword xi
Part 3: Data Tables 273
by Kevin Steinberg
How to Read the Data Tables ...................................................275
Index of Data Tables...................................................................277
Executive Summary xiii Data Tables.................................................................................279
by Nouriel Roubini and James Bilodeau
Contributors
Contributors
CONTRIBUTOR
Erik Feyen, The World Bank We would like to thank Dealogic and Thomson Reuters for their
generous contribution of data for this Report.
* The Forum is grateful for the support of the Industry Partners who served on the Steering and Operating Committees. Any findings contained
in the Report are solely the view of the Report’s authors and do not reflect the opinions of the Steering or Operating Committee members.
† Employees of the World Economic Forum USA.
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Part 1.r3 10/14/09 2:21 PM Page vii
Academic Advisors
Academic Advisors
Franklin Allen
The Wharton School
Martin Baily
Brookings Institution
Thorsten Beck
Tilburg University
Mario Blejer
Banco Hipotecario
Richard Cooper
Harvard University
Howard Davies
London School of Economics
Erik Feyen
The World Bank
Linda Goldberg
Federal Reserve Bank of New York
Subir Lall
International Monetary Fund
vii
Ross Levine
Brown University
Ashoka Mody
International Monetary Fund
Sergio Schmukler
The World Bank
Augusto de la Torre
The World Bank
The Forum is grateful for the support of the Academic Advisors who contributed to the Report. Any findings contained in the Report are
solely the views of the Report’s authors and do not reflect the opinions of the Academic Advisors.
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Part 1.r3 10/14/09 2:21 PM Page ix
Preface
Preface
KLAUS SCHWAB
Executive Chairman, World Economic Forum
In the time since the first Financial Development Report which the Report is based. Other complementary
was published, global leaders have mounted an unprece- publications from the World Economic Forum include
dented response to a financial crisis, the effects of which The Global Competitiveness Report,The Global Enabling
have rippled across all regions and levels of society.The Trade Report,The Global Gender Gap Report,The Global
urgency of the threat to the global economy and our Information Technology Report, and The Travel & Tourism
collective prosperity has required pragmatic and at times Competitiveness Report.
inventive responses that transcended the conventions of We would like to express our gratitude to the lead
recent history. Now, with the publication of this, the academic on the project, Nouriel Roubini of New York
second Financial Development Report, as leaders take stock University, for his thought leadership in the design of
of the efficacy of their actions, thoughts turn to the the Financial Development Index and contributions to
implications of this crisis, to the assumptions on which this Report. We are grateful to our industry partners
our global financial system is based, and to the legacy of who served on the project Steering and Operating
this response. Committees, including Barclays Capital, EFG-Hermes,
As with past crises and episodes of dramatic change, JP Morgan Chase & Co., Standard Chartered Bank,
decisions made now have the potential to impact gener- and Troika Dialog Group.We are appreciative of our
ations to come. New models for global governance and academic advisors who generously contributed their
cooperation are needed that are commensurate with the time and ideas in helping shape this Report. We would ix
realities of increasing financial integration and economic also like to thank James Bilodeau at the World Economic
interdependence. As dialogue and consensus develop on Forum USA, editor and co-author of the Report, for his
new models for global financial governance, it is vital to energy and commitment to the project, as well as the
bring a balanced and rich perspective to bear on these other members of the project team, including Ibiye
decisions. It is in this spirit that the World Economic Harry, Ayah El Said, and Toopan Bagchi.We are grateful
Forum offers this year’s Financial Development Report as a to Margareta Drzeniek Hanouz and Thierry Geiger for
transparent, analytical tool to help promote richness of their guidance as Project Advisors. Appreciation also
dialogue and comprehensiveness of debate. goes to the Global Competitiveness Team, including
It is not only the more visible decisions at the global Jennifer Blanke, Irene Mia, Ciara Browne, Pearl
level that matter but also those taken at the regional and Samandari, Eva Trujillo Herrera, and Carissa Sahli.
local levels, which have the potential to build stronger Finally, we would like to thank our network of Partner
financial systems that help extend prosperity to all. The Institutes, without whose enthusiasm and hard work the
Financial Development Report, in providing a depth of annual administration of the Executive Opinion Survey
information across a number of economies, serves to and this Report would not be possible.
highlight some of the variation across individual financial
systems that must be considered in building on existing
strengths and looking for workable solutions to problems.
Once the priorities of stabilization have been achieved,
reform and development must be undertaken with a
sensitivity to the requirements, levels of development,
and specific circumstances of individual countries.
In the tradition of the Forum’s multi-stakeholder
approach to global issues, the creation of this Report
involved an extended program of outreach and dialogue
with members of the academic community, public fig-
ures, representatives of nongovernmental organizations,
and business leaders from across the world.This work
included numerous interviews and collaborative sessions
to discuss the approach to the design of the Index on
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Foreword
Foreword
KEVIN STEINBERG
Chief Operating Officer and Head of the Centre for Global Industries (New York), World Economic Forum USA
The World Economic Forum is pleased to release The decisions was highlighted in the current crisis. As
Financial Development Report 2009, the second edition financial services firms weigh where to base and then
since its inaugural publication last year.The Report rep- manage their operations in different regions, what are
resents a key initiative undertaken as part of the Forum’s the elements that should be considered? How should they
Industry Partnership Programme for Financial Services. think about the different risks and tradeoffs associated
The Programme provides a platform for CEOs and with different operating environments? The stability of
senior executives to engage with their peers and an financial systems must certainly be a central factor,
extended community of academics, leaders from gov- but effective corporate governance, robust legal regimes
ernment, and experts from civil society to tackle key promoting contract enforcement, availability of human
issues on the global agenda. Certainly, the ongoing capital, and other factors are also critical to nurturing
financial crisis ranks as one of the most pressing issues competitive and resilient financial systems.
to confront the global community in generations. For policymakers charged with the overall economic
welfare of the broader population, how do they ensure
that the financial system serves all constituencies,
Implications of the financial crisis including those that are less privileged? The measures
The current crisis has revealed the extent of global of financial access we capture in the Index illustrate
interconnectedness, exposing an underappreciated set that even while large corporations may have relatively xi
of linkages between players as diverse as homeowners easy availability of capital in particular markets, small
in the United States, asset-backed securities traders in enterprises and individuals in the same countries may
London, manufacturing firms in Asia, and agricultural not. Governments need to be quite nuanced in their
exporters in Latin America. Now a variety of stakeholders approaches to ensure that financial markets can support
across many national and international platforms are innovation and growth at all levels of society.
involved in crafting an effective and lasting response.
Financial stability must remain the near-term priority,
yet the potential reach and lasting impact of reform The Financial Development Report 2009
poses a breadth of questions that must be considered by In light of these far-reaching questions, this year’s
these different stakeholders as well. It is our hope that Report strives to move beyond an updated Index to a
the dimensions captured by the Financial Development broader examination of the global impact of the crisis
Index will inform this view and serve as a valuable tool on financial development. Part 1: Findings from the
for those most closely involved in the reform process to Financial Development Index, begins with Chapter 1.1
address both short- and long-term considerations. outlining the methodology for the Index, the academic
For regulators with macroprudential oversight, how theory and assumptions supporting it, and some of the
do they ensure that they have adequately addressed ele- key findings from the Index results. Chapters 1.2 and
ments of systemic risk without undermining the vital role 1.3, which complete Part 1, include some thoughtful
that financial development plays as a driver of economic contributions to provide context on how the current
growth? Will proposed solutions adversely impact the crisis has impacted both emerging economies and,
development of robust and sizeable financial intermedi- more specifically, the achievement of the Millennium
aries? A key challenge is to balance careful regulatory Development Goals.The effects of the crisis on several
oversight while promoting innovation and entrepreneur- emerging markets have been tempered by the sound
ship. As indicated by some results within the Index, macroeconomic policy and external conditions of
countries with a high degree of stability do not neces- recent years. However, the effects of financial crises do
sarily have deep and active financial intermediation that in general tend to fall disproportionately upon the
has been correlated with economic growth. Ongoing poor. It is therefore important for countries to craft
economic development may therefore depend on being policy responses with these effects in mind.
able to promote both simultaneously. We encourage readers to delve into the detail of
For financial intermediaries, the need to consider Part 2: Country/Economy Profiles and Part 3: Data
systemic issues in their investment and operational Tables of the Report. In light of the complexity of
Part 1.r3 10/14/09 2:21 PM Page xii
Foreword
Going forward
We recognize the challenging economic and political
environment into which this Financial Development
Report is being launched. Fortunately, as this is the
second edition, it provides us a first-time opportunity to
compare how financial systems are evolving year over
year at a time when understanding these changes could
not be more important.We therefore welcome ongoing
discussions and public debate, and anticipate that further
work will be both productive and necessary.
xii On behalf of the World Economic Forum as well
as the project team, I extend thanks to all involved in
creating this Index for their tremendous contributions
to this work. Our Industry Partners have relayed their
enthusiasm not only for using this work as a basis for
discussions with policymakers, but also for engaging in
a broader dialogue about how all stakeholders can ensure
the stability and effectiveness of both national and global
capital markets.We therefore welcome feedback and
reactions from all interested in this work, and invite
your involvement in our future efforts.
Part 1.r3 10/14/09 2:21 PM Page xiii
Executive Summary
Executive Summary
NOURIEL ROUBINI, New York University and RGE Monitor
JAMES BILODEAU, World Economic Forum USA
The Financial Development Report and the Financial • At second place, Australia showed considerable
Development Index (FDI) on which it is based provide strength in the rankings. Canada, the smallest of the
a score and rank for 55 countries according to the level G-8 countries (by GDP), and countries that are
of their financial development. It analyzes the drivers of smaller than it fared better in this year’s Index,
financial system development that support economic comprising 7 out of the top 10 in overall rank.
growth in developed and developing countries to serve These include Australia (2nd), Singapore (4th),
as a tool for countries to benchmark themselves and Hong Kong SAR (5th), Canada (6th), Switzerland
prioritize areas for reform. (7th), the Netherlands (8th), and Denmark (10th).
The Report defines financial development as the factors,
policies, and institutions that lead to effective financial interme-
diation and markets, as well as deep and broad access to capital
and financial services. In accordance with this definition, Table 1: Top 10 in overall Index ranking
measures of financial development are captured across
2009 2008 2009 Change
seven pillars: rank rank score in score
Economy (1 to 55) (1 to 55) (1 to 7) (2009 vs. 2008)
Note: Some refinements have been made to this year's Index that may affect
Financial stability is thus an important component comparability with the previous year's results.
Executive Summary
1 Norway 5.73
2 Switzerland 5.66
3 Hong Kong SAR 5.63
4 Chile 5.62
5 Singapore 5.61
6 Saudi Arabia 5.60
7 Canada 5.57
8 Kuwait 5.49
9 Australia 5.48
10 Germany 5.34
11 Finland 5.27
12 France 5.27
13 Malaysia 5.14
14 Mexico 5.13
15 Brazil 5.13
16 Czech Republic 5.08
17 United Arab Emirates 5.07
18 Sweden 5.07
19 Denmark 4.99
20 Slovak Republic 4.92
Part 1
Findings from the Financial
Development Index
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The authors would especially like to thank Ibiye Harry for her extensive
contributions to this chapter and Report.
Part 1.r3 10/14/09 2:21 PM Page 4
of measures intended to capture different dimensions Financial intermediation and financial markets
of financial stability that have been highlighted in the contribute directly to increased economic growth and
current crisis. However, consistent with its purpose of aggregate economic welfare through their effect on capital
supporting the long-term development of financial accumulation (the rate of investment) and on techno-
systems and their central role in economic growth, it logical innovation. First, greater financial development
also encourages a broad analysis over a theoretical focus leads to greater mobilization of savings and its allocation
on a few specific areas.With this holistic view, decision to the highest-return investment projects.This increased
makers can develop a balanced perspective accumulation of capital enhances economic growth.
as to which aspects of their country’s financial system Second, by appropriately allocating capital to the right
are most important and empirically calibrate this view investment projects and promoting sound corporate
relative to other countries. governance, financial development increases the rate
of technological innovation and productivity growth,
further enhancing economic growth and welfare.
Financial development and economic growth Financial markets and intermediation benefit
A large body of economic literature supports the premise consumers and firms in many other ways that are not
that, in addition to many other important factors, the directly related to economic growth. Access to financial
performance and long-run economic growth and welfare markets for consumers and producers can reduce poverty,
of a country are related to its degree of financial devel- such as when the poor have access to banking services
opment. Financial development is measured by factors and credit.The importance of microfinance can be seen
such as size, depth, access, and the efficiency and stability in this context.This access allows consumers to smooth
of a financial system, which includes its markets, inter- consumption over time by borrowing and/or lending and
mediaries, range of assets, institutions, and regulations. stabilizes consumer welfare in the presence of temporary
The higher the degree of financial development, the shocks to wages and income. By contributing to the
wider the availability of financial services that allow diversification of savings and of portfolio choices, it can
the diversification of risks.This increases the long-run also increase the return on savings and ensure higher
growth trajectory of a country and ultimately improves income and consumption opportunities. Insurance serv-
4 the welfare and prosperity of producers and consumers ices can help mitigate a variety of risks that individuals
that have access to financial services.The link between and firms face, thus allowing better risk sharing of indi-
financial development and economic growth can be vidual or even macroeconomic risks.
traced back to the work of Joseph Schumpeter in the
early 20th century,2 and more recently to Ronald
McKinnon and Edward Shaw.This link is now well The seven pillars of financial development
established in terms of empirical evidence.3 To understand and measure the degree of financial
The current environment has highlighted the development, one must consider all of the different
potentially severe impact that financial crises can have factors that together contribute to the degree of depth
on economies, and in particular on those with fewer and efficiency of the provision of financial services.
resources with which to deal with financial adversity Conceptually, in thinking about an index that measures
(see Box 1).4 Yet research supports the idea that coun- the degree of financial development, the various aspects
tries that have experienced occasional financial crises of development can be seen as seven “pillars” grouped
have, on average, demonstrated higher economic growth into three broad categories, as indicated in Figure 1:
than countries that have exhibited more stable financial
conditions.5 Thus, although it is important to mitigate 1. Factors, policies, and institutions: the foundational
the short-term impact of crises, it is also important to characteristics that allow the development of financial
view financial development in terms inclusive of, but intermediaries, markets, instruments, and services.
broader than, financial stability.
Economic theory suggests that financial markets 2. Financial intermediation: the variety, size, depth,
and intermediaries exist mainly because of two types of and efficiency of the financial intermediaries and
market frictions: information costs and transaction costs. markets that provide financial services.
These frictions lead to the development of financial
intermediaries and financial markets, which perform 3. Financial access: access by individuals and businesses
multiple functions, such as facilitating the trading, hedging, to different forms of capital and financial services.
diversification, and pooling of risk; providing insurance
services; allocating savings and resources to the appro- The seven pillars are organized and described below
priate investment projects; monitoring managers and according to these three categories. (See Appendix A
promoting corporate control and governance; mobilizing for the detailed structure of the FDI and a list of all
savings efficiently; and facilitating the exchange of goods indicators).
and services.
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5
Factors, policies, and institutions effects on the real economy. Official supervisory power
This first category covers those foundational features can be an important component of this oversight, and
that support financial intermediation and the optimal can include the ability to declare the insolvency of
provision of financial services and includes the first three financial institutions, restructure them, and undertake
of the seven pillars: the institutional environment, the prompt corrective and enforcement actions.9 The
business environment, and the degree of financial stability. robustness of private monitoring of financial institu-
tions—incorporating such elements as the requirements
First pillar: Institutional environment for certified auditing, the percentage of banks rated by
The institutional environment encompasses the laws international rating agencies, and the quality of bank
and regulations that allow the development of deep and accounting—is also an essential aspect of regulation.10
efficient financial intermediaries, markets, and services A measure of the effectiveness of regulation of securities
as well as the macroprudential oversight of financial exchanges is also included.
systems.This includes the overall laws, regulations, and Better corporate governance is believed to encour-
supervision of the financial sector, as well as the quality age financial development, which in turn has a positive
of contract enforcement and corporate governance. impact on growth.11 Contract enforcement is also
Economic theory proposes that a strong institutional important because it limits the scope for default among
environment exists to alleviate information and transaction debtors, which in turn promotes compliance.Variables
costs.6 Much empirical work has tackled issues related capturing these measures as they relate to the formal
to the importance of institutions and their impact on transfer of funds from savers to investors are included
economic activity in general.The presence of legal insti- in the pillar.12 Inadequate investor protection leads to a
tutions that safeguard the interests of investors is an inte- number of adverse effects, which can be detrimental to
gral part of financial development.7 Reforms that bolster external financing and ultimately to the development of
a country’s legal environment and investor protection are well-functioning capital markets.13 In general, inadequate
likely to contribute to a more efficient financial sector.8 enforcement of financial contracts has been found to
Accordingly, we have included variables related to the augment the process of credit rationing, thus hindering
degree of judicial independence and judicial the overall process of growth.14
efficiency. Other important aspects of the institutional envi-
Additionally, the current crisis has clearly empha- ronment are a country’s capital account openness and
sized the importance of regulation at the institutional domestic financial sector liberalization. Financial
level as it relates to financial stability and corresponding liberalization generally permits a greater degree of
Part 1.r3 10/14/09 2:21 PM Page 6
financial depth, which translates into greater financial • other aspects of the business environment, including
intermediation among savers and investors.This in turn taxation policy and the costs of doing business for
increases the monetization of an economy, resulting in a financial intermediaries.
more efficient flow of resources.15 Empirically, however,
the impact of capital account liberalization delivers Measures taken to facilitate the creation and improvement
mixed evidence. Several studies have asserted that capital of human capital have been found to assist the process
account liberalization has no impact on growth while of economic growth.19 Empirical evidence supports this
others have found a positive, and statistically significant, relationship and shows positive correlations between
impact.16 At the same time, other work asserts that the human capital and the degree of financial development.20
relationship is undetermined. Our proxies for the amount of human capital are related
Given such ambiguity over the impact of capital to the enrollment levels of tertiary education.We also
account openness, it is best examined within the context include measures that reflect the quality of human capital,
of the legal environment.The better a country’s legal and such as the degree of staff training, the quality of man-
regulatory environment, the greater the benefits from agement schools and math and science education, and
capital account openness—and vice versa. Accordingly, the availability of research and training services.
within the FDI we try to capture the relationship Another key area is infrastructure.We capture a basic
between capital account openness and the level of legal measure of the quality of physical infrastructure, which
and regulatory development and have interacted the is important given its role in enhancing the process of
variables used to measure each (see Appendix A).The private capital accumulation and financial depth in
presence of both a robust legal and regulatory system countries by increasing the profitability of investment.21
and capital account openness provides a positive indica- Our analysis of infrastructure emphasizes measures of
tion of the financial development of a country.We have information and communication technologies, which
also interacted the capital account openness variable are particularly important to those firms operating
with the level of bond market development because of within a financial context because of their data-intensive
research that asserts the importance of developing nature.
domestic bond markets in advance of full liberalization Another integral aspect of the business environment
6 of the capital accounts.17 Assessments of commitment to is the cost of doing business in a country. Specifically,
WTO trade agreements as they relate to financial serv- research has shown that the cost of doing business is a
ices have also been included and interacted in a vital feature of the efficiency of financial institutions.
similar manner. The different costs of doing business are integral to
A similar analysis can be extended to the degree of assessing a country’s business environment as well as the
liberalization of the domestic financial sector.This degree type of constraints that businesses may be facing.22 As
of liberalization is based on whether a country exerts such, the better the business environment, the better the
interest rate controls (either ceilings or floors), whether performance of financial institutions and the higher the
credit ceilings exist, and whether foreign currency degree of financial development.Variables that capture
deposits are allowed. In general, the better a country’s such costs include the World Bank’s measures of the cost
legal and regulatory environment, the greater the impact of starting a business, the cost of registering property,
of domestic financial sector liberalization on a country’s and the cost of closing a business. Indirect or transaction
economic growth.Variables representing each of these costs are captured in variables such as time to start a
characteristics have been interacted to represent this business, time to register property, and time to close a
result. Recent research supports the importance of business.
advanced legal systems and institutions in this respect, Our analysis also considers taxes as another key
holding that the presence of such institutions is as vital constraint that businesses in the financial sector can face.
as having both a developed banking sector and equity The variables in this subpillar focus on issues related to
markets.18 distortionary and burdensome tax policies, reflecting
clearer consensus around the importance of these issues.
Second pillar: Business environment Because of less clarity in the academic literature around
The second pillar focuses on the business environment the effects of absolute rates of taxation and issues of data
and considers: comparability, we have not included measures related to
overall tax rates.
• the availability of human capital—that is, skilled
workers who can be employed by the financial Third pillar: Financial stability
sector and thus provide efficient financial services; The third pillar addresses the stability of the financial
system.The severe negative impacts of financial instability
• the state of physical capital—that is, the physical on economic growth can be profoundly seen in the
and technological infrastructure; and current financial crisis as well as pervasive past financial
crises.This instability can lead to significant losses to
Part 1.r3 10/14/09 2:21 PM Page 7
points of sale (POS), and microfinance penetration. Table 1: The Financial Development Index 2009
These measures capture access to capital by individuals rankings
and small enterprises that can be important contributors
2009
to growth in developing countries. 2009 2008 score Change
Country/Economy Rank Rank (1–7) in score
Accessibility, along with the size and depth of the
United Kingdom 1 2 5.28 –0.55
financial system as a whole captured in the previous
Australia 2 11 5.13 +0.15
pillars, has a significant effect on a country’s real activity,
United States 3 1 5.12 –0.73
economic growth, and overall welfare. Singapore 4 10 5.03 –0.12
Hong Kong SAR 5 8 4.97 –0.26
Canada 6 5 4.96 –0.30
Adjustments to the Financial Development Index Switzerland 7 7 4.91 –0.32
this year Netherlands 8 9 4.85 –0.37
The structure of the Financial Development Index Japan 9 4 4.64 –0.64
remains largely similar to that used in last year’s inaugural Denmark 10 n/a 4.64 n/a
report.While there are still seven pillars in the Index, France 11 6 4.57 –0.68
Germany 12 3 4.54 –0.74
we have improved several of them slightly.The 7th pillar
Belgium 13 17 4.50 –0.06
now focuses specifically on measures of access to finan-
Sweden 14 13 4.48 –0.27
cial services and capital, whereas last year it also included Spain 15 12 4.40 –0.50
measures of size and depth of the overall financial system. Ireland 16 14 4.39 –0.33
We have redistributed these size measures into the Norway 17 15 4.38 –0.28
appropriate financial intermediation pillars (the 4th, 5th, Austria 18 18 4.28 –0.27
and 6th pillars, specifically). Finland 19 21 4.24 –0.21
As noted previously, we have also expanded our United Arab Emirates 20 16 4.21 –0.40
Italy 21 22 3.98 –0.40
definition of financial access to include a new subpillar of
Malaysia 22 20 3.97 –0.51
retail measures that are applicable to individuals and small
Korea, Rep. 23 19 3.91 –0.64
enterprises.We considered that this was an important Saudi Arabia 24 27 3.89 –0.01
10 dimension to add to the Index in consideration of the Jordan 25 n/a 3.89 n/a
important role that this segment of the economy can China 26 24 3.87 –0.22
play in developing countries. Bahrain 27 28 3.85 –0.04
We have also made some refinements to the meas- Israel 28 23 3.69 –0.45
Panama 29 32 3.63 +0.03
ures within each of the seven pillars to better proxy
Kuwait 30 26 3.62 –0.31
for the components of financial development we are
Chile 31 30 3.60 –0.19
trying to capture.Within the 1st pillar (institutional South Africa 32 25 3.48 –0.51
environment), we have combined capital account and Czech Republic 33 35 3.48 +0.05
domestic financial sector liberalization measures with a Brazil 34 40 3.46 +0.18
new measure on commitment to the WTO agreement Thailand 35 29 3.35 –0.48
on trade in services to create a single subpillar called Egypt 36 37 3.33 +0.01
financial sector liberalization. We now interact this variable Slovak Republic 37 42 3.30 +0.05
India 38 31 3.30 –0.34
with bond market development in addition to the legal
Poland 39 41 3.27 0.00
and regulatory issues score, as noted previously.We have
Russian Federation 40 36 3.16 –0.24
also added measures related to corruption perceptions Hungary 41 33 3.08 –0.45
and legal rights. A couple of changes were made to the Peru 42 46 3.07 +0.01
2nd pillar (business environment) to better align cost of Mexico 43 43 3.06 –0.15
doing business measures with financial services compa- Turkey 44 39 3.03 –0.27
nies and to add indirect cost measures related to time Vietnam 45 49 3.00 –0.03
11th–20th by GDP
The Financial Development Index 2009 rankings 1,000
21st–30th by GDP
The overall ranking for this year’s Financial Development 31st–40th by GDP 41st–55th by GDP
Report can be seen in Table 1, along with the 2008 rank- 0.0
-0.7 -0.6 -0.5 -0.4 -0.3 -0.2 -0.1
ing, the Index score, and the change in score from last
Change in FDI score from 2008 to 2009
year. As noted above, there were some changes made to
the Index structure and variables this year; yet looking
across the overall rankings and scores, some general Note: The graph shows the change in overall Index score grouped by GDP
(US$ billions); GDP values shown are average for each tier. Some refine-
trends seem apparent. ments have been made to this year's Index that may affect comparability
with the previous year's results.
1st pillar: Institutional environment 2nd pillar: Business environment 3rd pillar: Financial stability
Country/Economy Rank Score Country/Economy Rank Score Country/Economy Rank Score Country/Economy Rank Score
Hong Kong SAR 1 5.39 United Kingdom 1 6.36 United States 1 5.65 Australia 1 5.19
United Kingdom 2 5.32 United States 2 5.93 United Kingdom 2 5.52 Austria 2 5.11
Japan 3 5.15 Australia 3 4.36 Singapore 3 5.10 Canada 3 4.75
Spain 4 5.07 Russian Federation 4 4.13 Switzerland 4 4.96 Belgium 4 4.73
Australia 5 5.01 Netherlands 5 4.10 Japan 5 4.81 Bahrain 5 4.73
Ireland 6 4.98 Japan 6 4.03 Australia 6 4.63 Denmark 6 4.59
Netherlands 7 4.90 Canada 7 3.99 Germany 7 4.45 United Arab Emirates 7 4.55
Canada 8 4.83 France 8 3.98 France 8 4.42 Switzerland 8 4.47
Belgium 9 4.79 Hong Kong SAR 9 3.74 Hong Kong SAR 9 4.40 Singapore 9 4.22
China 10 4.77 Germany 10 3.52 Netherlands 10 4.22 Saudi Arabia 10 4.21
Singapore 11 4.68 Singapore 11 3.37 Belgium 11 4.21 Egypt 11 4.19
Malaysia 12 4.66 China 12 3.31 Canada 12 4.02 United States 12 4.19
Sweden 13 4.61 Spain 13 3.25 Jordan 13 3.85 Hong Kong SAR 13 4.19
Switzerland 14 4.56 Ireland 14 3.21 Spain 14 3.81 Netherlands 14 4.16
Jordan 15 4.42 Brazil 15 3.20 Italy 15 3.74 Ireland 15 4.04
Norway 16 4.34 Switzerland 16 3.19 Sweden 16 3.64 United Kingdom 16 4.02
Denmark 17 4.34 India 17 3.12 Denmark 17 3.62 Panama 17 3.99
Austria 18 4.24 Korea, Rep. 18 3.02 Kuwait 18 3.53 Spain 18 3.95
Germany 19 4.23 Italy 19 2.82 Finland 19 3.37 France 19 3.86
United States 20 4.21 Kazakhstan 20 2.81 Korea, Rep. 20 3.35 Jordan 20 3.72
United Arab Emirates 21 4.17 Denmark 21 2.80 United Arab Emirates 21 3.07 Italy 21 3.72
Korea, Rep. 22 4.16 Sweden 22 2.67 India 22 2.96 Malaysia 22 3.71
France 23 4.05 Jordan 23 2.58 Austria 23 2.96 Norway 23 3.69
Panama 24 4.05 Belgium 24 2.48 Ireland 24 2.91 Israel 24 3.67
13
Italy 25 4.01 Malaysia 25 2.44 Pakistan 25 2.75 Chile 25 3.63
Israel 26 3.97 United Arab Emirates 26 2.40 China 26 2.74 Sweden 26 3.59
Czech Republic 27 3.85 Ukraine 27 2.39 Norway 27 2.73 Czech Republic 27 3.46
Kuwait 28 3.79 Argentina 28 2.28 Panama 28 2.64 Finland 28 3.44
Finland 29 3.78 Norway 29 2.26 Malaysia 29 2.47 Thailand 29 3.33
South Africa 30 3.75 Finland 30 2.26 South Africa 30 2.38 China 30 3.31
Saudi Arabia 31 3.58 Egypt 31 2.16 Saudi Arabia 31 2.33 Brazil 31 3.31
Bahrain 32 3.57 South Africa 32 2.13 Israel 32 2.28 Vietnam 32 3.30
Slovak Republic 33 3.50 Bahrain 33 2.10 Czech Republic 33 2.05 Slovak Republic 33 3.29
Thailand 34 3.49 Saudi Arabia 34 2.03 Egypt 34 2.04 Poland 34 3.14
Brazil 35 3.46 Mexico 35 2.01 Hungary 35 1.98 Peru 35 3.14
Chile 36 3.43 Indonesia 36 1.96 Thailand 36 1.96 Indonesia 36 3.11
Vietnam 37 3.29 Israel 37 1.89 Brazil 37 1.86 Japan 37 3.03
Poland 38 3.17 Austria 38 1.87 Poland 38 1.84 Turkey 38 3.01
India 39 3.12 Chile 39 1.87 Bahrain 39 1.77 Kuwait 39 2.98
Egypt 40 3.09 Turkey 40 1.83 Philippines 40 1.77 Bangladesh 40 2.97
Turkey 41 2.96 Philippines 41 1.81 Russian Federation 41 1.76 Germany 41 2.96
Argentina 42 2.78 Vietnam 42 1.73 Turkey 42 1.75 Hungary 42 2.95
Peru 43 2.77 Poland 43 1.73 Vietnam 43 1.71 Mexico 43 2.95
Indonesia 44 2.63 Colombia 44 1.65 Bangladesh 44 1.67 Colombia 44 2.90
Philippines 45 2.63 Peru 45 1.60 Venezuela 45 1.65 Ukraine 45 2.90
Pakistan 46 2.62 Panama 46 1.59 Slovak Republic 46 1.52 Kazakhstan 46 2.89
Colombia 47 2.57 Thailand 47 1.58 Chile 47 1.50 South Africa 47 2.89
Kazakhstan 48 2.52 Venezuela 48 1.52 Mexico 48 1.47 India 48 2.76
Venezuela 49 2.49 Hungary 49 1.48 Argentina 49 1.43 Russian Federation 49 2.73
Nigeria 50 2.45 Czech Republic 50 1.41 Peru 50 1.42 Pakistan 50 2.66
Bangladesh 51 2.44 Pakistan 51 1.40 Kazakhstan 51 1.38 Philippines 51 2.54
Ukraine 52 2.38 Nigeria 52 1.26 Indonesia 52 1.35 Korea, Rep. 52 2.50
Hungary 53 2.37 Slovak Republic 53 1.23 Nigeria 53 1.34 Nigeria 53 2.46
Mexico 54 2.37 Kuwait 54 1.13 Ukraine 54 1.33 Argentina 54 2.22
Russian Federation 55 1.80 Bangladesh 55 1.03 Colombia 55 1.27 Venezuela 55 2.14
Part 1.r3 10/14/09 2:21 PM Page 14
Table 3: Countries ranked within the top three of each Index pillar
Australia 2 2 — — — — 3 — 1
Austria 18 1 — — — — — — 2
Canada 6 1 — — — — — — 3
Denmark 10 2 2 1 — — — — —
Hong Kong SAR 5 2 — — 3 1 — — —
Japan 9 1 — — — 3 — — —
Norway 17 3 3 3 1 — — — —
Singapore 4 3 1 2 — — — 3 —
Switzerland 7 1 — — 2 — — — —
United Kingdom 1 3 — — — 2 1 2 —
United States 3 2 — — — — 2 1 —
in performance in the different dimensions of financial particularly by low scores in banking system and currency
systems represented. In Table 3 this finding is also appar- stability. At the same time, there is evidence of contin-
ent, as economies that are ranked in the top three spots ued strength across the financial intermediation pillars
in each pillar do not necessarily achieve a strong overall that capture such measures as the depth and efficiency of
score or high scores in other pillars. their banking systems (the United States is weaker than
A country such as Norway achieves very strong the United Kingdom here) the provision of important
performance across the more “foundational” pillars related non-banking financial services such as IPOs, M&A
to institutional environment, business environment, and activity, and insurance; and the size and activity of their
financial stability, yet is not as strong across the three financial markets.
14
financial intermediation pillars and the financial access If one believes that financial stability should take a
pillar. Austria achieves a first-place showing in financial more prominent role in the Index than factors such as
access, yet has scores that are not as strong in other pillars financial intermediation, what would that mean for the
with an overall ranking of 18th place in the Index. performance of countries like the United States and
Thus a strong performance in one or even several United Kingdom within the Index? Table 4 illustrates how
of the pillars does not necessarily translate to a strong the scores of the United States and the United Kingdom
performance for a country in the overall ranking.This would be affected by increased weighting of the financial
has important implications for how the Index should be stability pillar. All pillars are currently weighted equally
viewed in the context of the current global financial in the Index, which implies a weighting of approximately
crisis. Given the degree to which the current crisis has 14 percent for each. As the weighting of the financial
compromised the functioning of financial systems, stability pillar is increased, first by 20 percent and then
changed assumptions behind financial system governance, by 40 percent, one sees that the rankings for the United
and impacted the lives of many who have felt its effect States and the United Kingdom stay the same. It is only
in the real economy, it may be tempting to construe the when the weighting is increased by 60 percent (to an
Index as a proxy for how stable or unstable countries’ absolute weighting of 23 percent) that the ranking of
financial systems are. It may also be tempting to view the United States drops by one place.When the weight-
the Index as an indicator of how favorable an economy ing of the pillar is increased by 80 percent (representing
is for investment.These views are both inaccurate as the an absolute weighting of over 25 percent of the total
Index is both broader and longer term in scope: it looks Index), the United Kingdom still remains in the top
at many different and often complex factors that support position while the United States is still within the top 5.
the long-term development of the financial systems it Thus, even when increased weighting lends a greater
assesses. Financial stability is only part of the assessment of importance to financial stability, this appears to be offset
how well financial systems in these countries contribute by the other relative strengths of the financial systems in
to overall economic growth through the diversification these two countries.
of risks and the efficient allocation of capital to those
who most need it. Financial stability and access in developing countries
Consistent with the origins of the current financial This year’s Index points up some interesting findings
crisis in the United Kingdom and the United States, with respect to financial stability and access to financial
these countries show very low scores in the financial services in the developing economies covered. First, the
stability pillar (37th and 38th, respectively), driven rankings and scores within the financial stability pillar
Part 1.r3 10/14/09 2:22 PM Page 15
1 13.81 1 13.33 Note: Highlighted countries are developing countries as defined by Moody’s
2 13.81 2 13.33 Statistical Handbook (November 2008). Some refinements have been made
3 17.14 3 20.00 to this year's Index that may affect comparability with the previous year's
results.
4 13.81 4 13.33
5 13.81 5 13.33
6 13.81 6 13.33
7 13.81 7 13.33
Country/Economy Rank Score Country/Economy Rank Score financial fundamentals than they had in previous financial 15
United Kingdom 1 5.25 United Kingdom 1 5.23 crises.This included lower liability dollarization, lower
Australia 2 5.14 Australia 2 5.15 fiscal and private debt, and a better aggregate balance
United States 3 5.11 United States 3 5.09 sheet for the financial services sector. For many countries,
Singapore 4 5.05 Singapore 4 5.07
such as Brazil, this was the result of effective macro-
Hong Kong SAR 5 4.99 Hong Kong SAR 5 5.02
economic and financial policy in the wake of past crises
as well as generally favorable economic conditions that
1.60 x ORIGINAL WEIGHT 1.80 x ORIGINAL WEIGHT
included higher commodity prices and strong capital
Pillar Weight (%) Pillar Weight (%)
in-flows in the period preceding the crisis.
1 12.86 1 12.38
For some developing countries, which perform
2 12.86 2 12.38
3 22.86 3 25.71 relatively well in this pillar but poorly in others, this
4 12.86 4 12.38 result may represent the relative lack of integration and
5 12.86 5 12.38 development of their financial intermediaries, which
6 12.86 6 12.38 limited their exposure to the global financial turmoil. As
7 12.86 7 12.38
described previously, in some instances financial stability
Country/Economy Rank Score Country/Economy Rank Score may imply a tradeoff with healthy risk-taking or the
United Kingdom 1 5.21 United Kingdom 1 5.18 efficient allocation of capital to the highest-return
Australia 2 5.17 Australia 2 5.18
investments.
Singapore 3 5.09 Singapore 3 5.11
United States 4 5.07 Hong Kong SAR 4 5.06 The measures of retail access to financial services,
Hong Kong SAR 5 5.04 United States 5 5.05 new to the financial access pillar this year, illustrate some
potentially interesting findings with respect to developing
countries. Figure 3 shows average scores with respect
to commercial and retail access for developing and
illustrate the degree to which the financial systems in developed countries. Commercial access measures
many developing countries have been able to weather include access to equity markets, private credit, and
the current crisis.Table 5 presents the top 20 performers foreign investment that is generally more applicable to
in this pillar. A number of developing economies are larger enterprises.The retail access measures include the
represented here—among them Chile, Malaysia, Mexico, market penetration of bank accounts, number of bank
Brazil, and the Czech and Slovak Republics. branches, ATMs, and the penetration of microfinance—
Many developing economies entered the recent measures that are more applicable to individuals and
downturn with much stronger macroeconomic and small businesses. On average, one sees that developing
Part 1.r3 10/14/09 2:22 PM Page 16
4
Score (1–7)
Developing Developed
Note: Categorization of developing and developed countries is based on Moody's Statistical Handbook (November 2008).
16
countries perform nearly as well as developed countries
EUROPE AND NORTH AMERICA
in measures of commercial access. Figure 4 shows that
half of those that score within the top 10 in this category The United Kingdom takes 1st place in the
are developing countries.This may be attributable at Financial Development Index this year with a pronounced
least in part to the ease with which large companies in contrast of strengths and weaknesses across the seven
these economies are able to access foreign capital. pillars.The financial intermediation pillars shows the
By contrast, developing countries appear signifi- greatest strength, offsetting weaknesses in other areas,
cantly weaker with respect to the retail access measures most notably a very poor performance in financial
described above. In addition to a lower average score, stability.The United Kingdom scores high marks with
no developing country scores within the top 10 in this respect to the size of its banking system (1st) though it
category.This finding has important implications given delivers relatively weak performance in its efficiency
the significant role that small enterprises can play in the (24th), which includes measures of both operating effi-
economic growth and welfare of developing countries. ciency and profitability. Strength in financial markets
This may indicate the need for greater emphasis on (2nd) is evident particularly for foreign exchange and
distinct policy responses that address the “last mile” derivatives.The country comes in 1st with respect to
in providing capital and financial services to more insurance, scoring top rankings in indicators such as
distributed, less individually wealthy, yet nonetheless insurance density (1st) and insurance penetration (1st).
important agents within the economy. M&A activity is a clear competitive advantage (1st)
across measures of transaction value and number of
M&A deals; securitization is also strong (1st).
Regional analysis It is important to note that the impact of activities
While some high-level trends were highlighted in the such as securitization on financial stability are not cap-
previous section, it is also at the country level that some tured in the non-banking financial services pillar but in
of the potentially more useful findings from this Report the financial stability pillar.The United Kingdom scores
can be drawn.The country profiles contained in Part 2 very low in overall financial stability (37th), particularly
of this Report provide detailed information with which in currency stability (44th) and banking system stability
to undertake this analysis. A summary of highlights (45th). Aspects of its institutional environment (15th) are
drawn from these profiles is presented below by region. in need of improvement, especially across areas related to
regulation and oversight, including official supervisory
power (28th), centralization of economic policymaking
Part 1.r3 10/14/09 2:22 PM Page 17
ices (2nd) and financial markets (1st).The United States Hong Kong SAR 1 Australia 1
has deep and active financial markets across the four Singapore 2 Austria 2
Panama 3 Denmark 3
types of markets we have captured. Size is an important
Netherlands 4 Belgium 4
component of performance across these financial markets,
Bahrain 5 Canada 5
but indicators of activity such as stock market turnover
Switzerland 6 United States 6
(3rd), stock market value traded (4th), and spot foreign United Arab Emirates 7 Italy 7
exchange turnover (2nd) also signify strengths.The Chile 8 Spain 8
country performs well in measures of non-banking Jordan 9 Switzerland 9
financial services such as M&A activity (2nd) and secu- Canada 10 France 10
ritization (1st). However, as with the United Kingdom,
the impact of the systemic risk potentially created by
some of these activities is captured only in the financial Note: Highlighted countries are developing countries as defined in Moody's
Statistical Handbook (November 2008).
stability pillar; the United States achieves very low scores
in overall financial stability (38th). Particular disadvan-
tages are evident in currency stability (50th) and bank-
ing stability (36th) measures.The banking system in
general also exhibits signs of weakness, with relatively 17
lower scores in size (21st) and efficiency (26th). Potential the current crisis, it nonetheless has performed very well
areas of improvement in the institutional environment with respect to overall financial stability (2nd). Potential
include the strength of auditing and reporting require- areas of improvement in its institutional environment
ments (25th), the regulation of securities exchanges include contract enforcement and the strength of investor
(29th), and public trust of politicians (26th). protection.The size of its banking system as scaled by
Canada comes in 6th in the FDI, with a generally GDP is a source of strength (5th), although its efficiency
solid performance across all the pillars of the Index. (22nd) and degree of financial disclosure (40th) lowers
Financial access is a particular area of strength: Canada is its score in the banking pillar (14th overall in this pillar).
3rd in this pillar, with strong showings across the meas- A 4th place ranking in financial markets is driven by the
ures of both commercial and retail access.The country strength of its equity and foreign exchange markets.
demonstrates consistent strength across all three financial Similar to Switzerland, the Netherlands delivers
intermediation pillars: banking financial services (8th), solid results across most of the FDI pillars, which earns
non-banking financial services (7th), and financial mar- it 8th place in the rankings. However, the effects of the
kets (12th). Despite its high degree of economic inte- crisis seem to weigh a bit more heavily on its score, as
gration with the United States, Canada shows clear reflected in its 21st place ranking in the financial stability
divergence from its biggest trading partner with respect pillar. Good corporate governance (4th) is a particular
to financial stability, where it comes in 7th out of the strength, as is its infrastructure (5th).The size of the
FDI country sample.The stability of the banking system Dutch banking system is a clear advantage, coming in
(2nd) is a particular strength within this pillar. In terms 3rd place, contrasted by its score in banking efficiency
of its institutional environment, Canada shows consistent (31st). Consistent high marks across other areas of finan-
high marks across most measures of corporate gover- cial intermediation are also evident in a strong showing
nance, though official supervisory power (34th) emerges in non-banking financial services (5th) and financial
as a potential area for improvement. Other potential markets (10th). Neighboring Belgium has weaker
areas of improvement include the strength of legal rights scores in financial stability (33rd) and in the financial
(29th) and the cost of enforcing contracts (23rd).The intermediation pillars such as non-banking financial
distortive effects of taxation (25th) also represents a services (24th); its overall rank of 13th place is
potential development area in the business environment. bolstered by a strong score in financial access (4th).
Switzerland ranks 7th in the Index, with strong Denmark has been added to the countries covered
scores across its institutional environment.While the by the FDI this year and it takes 10th place, propelled
country has not been immune to distress as a result of by strong scores in its institutional environment (2nd)
Part 1.r3 10/14/09 2:22 PM Page 18
and business environment (1st). Consistent strengths corporate governance (52nd) and legal and regulatory
across areas such as legal and regulatory issues (3rd), issues (50th). Human capital (28th) emerges as a relative
human capital (2nd), and infrastructure contribute to the bright spot.
country’s good showing. Performance across the finan- The Russian Federation comes in 40th in the
cial intermediation pillars is less strong, although FDI, bolstered in large part by strength in non-banking
Denmark delivers solid scores in financial access (6th). financial services such as IPOs (3rd) and securitizations
Sweden (14th), Norway (17th), and Finland (19th) (3rd). Although a three-year average is used to smooth
showed a degree of similarity across their profiles, with out volatility in these types of transactions, the data may
strength in their institutional and business environments still reflect unusually high activity in this category. By
and contrasting relative weakness in their financial inter- contrast, Russia’s banking system scores poorly (53rd) and
mediation pillars. None of the Scandinavian countries there is room for improvement across most elements of
or Finland show particularly strong access to financial its institutional environment, such as corporate governance
services. (53rd), legal and regulatory issues (53rd), and contract
France takes 11th place in the overall FDI ranking, enforcement (35th).
with consistently solid scores across most of the pillars.
Its financial markets take 8th place, with advantages in
foreign exchange (9th), bonds (7th), and derivatives
(1st).The country comes in 8th in non-banking finan- ASIA AND THE PACIFIC
cial services but ranks a relatively weaker 23rd in bank- Countries in the Asia and Pacific region show a
ing, pulled down primarily by the relatively small size of high degree of variation across the FDI rankings, as they
its banking sector. Its banking system has shown a rela- did last year. Australia comes in 2nd in the overall
tively high degree of stability through the current crisis, rankings and leads the region through solid performance
with a 12th place ranking this year. Corporate gover- in both banking (5th) and non-banking (3rd) financial
nance (28th) emerges as a potential development area services.The efficiency of its banks, where it earns 1st
within France’s institutional environment, while taxation place in the rankings, is a key strength; the stability of its
(35th) and cost of doing business (29th) are areas of rel- banking system (10th) and a low risk of sovereign debt
18 ative weakness in the business environment. crisis (1st) underpins its relatively high degree of finan-
Similar to France, Germany (12th) shows relative cial stability through the current crisis. A less-developed
strength in its financial markets, with a 7th place ranking bond market is one of the country’s few weak spots,
in this pillar.The stability of its banking system (7th) also particularly in terms of public domestic bond market
bolsters its ranking. Although stable, banks in Germany capitalization (34th). Australia’s relative weakness in
score a relatively low 36th in terms of efficiency as commercial access to capital (21st) is offset by its high
measured across operational efficiency and profitability. level of retail access to capital (1st), enabling Australia to
In terms of its business environment, infrastructure is a achieve the highest level of overall financial access in the
particular area of strength (6th), while taxes and subsidies Index.
emerge as having a distortive effect on competition. Australia is followed closely by Singapore (4th)
Potential development areas include the need for greater and Hong Kong SAR (5th).These two economies
official supervisory power (28th) and stronger investor show consistent strength across their institutional and
protection (38th). Access to capital and financial services business environments, as well as high scores in financial
is a significant drag on the country’s ranking, with low stability (5th and 3rd, respectively).Within the banking
scores in both commercial (43rd) and retail (35th) access. pillar, both economies show room for improvement
Italy comes in 21st in the rankings, with its finan- with respect to financial information disclosure; however,
cial markets—particularly its bond markets (9th)—being this is offset by the efficiency of their banks (2nd
a relative strength. Financial access (21st) is consistent with and 4th, respectively).The size of Hong Kong’s banking
its overall ranking, although there is a stark contrast system (as scaled by GDP) is a particular competitive
between commercial access (52nd) and retail access advantage, with its 2nd place ranking. Non-banking
(7th). Key development areas within its institutional financial services are strong in both economies, a result
environment include corporate governance (54th) and that appears to translate into broad commercial access to
contract enforcement (52nd). capital. Singapore and Hong Kong place 2nd and 1st,
Of the Eastern European countries, the Czech respectively, in the Index for commercial access. And
Republic scores the highest, coming in at 33rd with a although they both exhibit healthy equity and foreign
generally even performance across the Index pillars. exchange markets, bond market development is an area
Financial stability, with a 16th place ranking, is a partic- for improvement in both economies, particularly Hong
ular strength. Ukraine (53rd) has the lowest ranking in Kong (34th); also some areas—such as securitization—
Eastern Europe, with a last-place finish in financial sta- appear relatively undeveloped, particularly in Hong
bility (55th) and room for improvement across most Kong (48th).
aspects of its institutional environment, including
Part 1.r3 10/14/09 2:22 PM Page 19
financial intermediation such as banking financial Financial stability is a key contributor to Brazil’s
services (44th) and the overall institutional (45th) and ranking of 34th in the overall Index, as the country
business environments (52nd). has exhibited stability across its banking system (25th)
Pakistan (49th), the Philippines (50th), and through the current crisis; its currency stability (3rd) is a
Bangladesh (54th) round out the representation of particular advantage. Although the country possesses the
Asian countries in the FDI, all falling within the bottom Index’s highest official supervisory power (1st), Brazil’s
10 countries of the Index. A high degree of political and institutional environment remains relatively weak in
economic instability are probably contributing to weak areas related to legal and regulatory issues (49th) and
scores across Pakistan’s institutional (52nd) and business contract enforcement (42nd).The country’s business
(50th) environments; likewise, the country shows a very environment is dragged down by an inefficient tax col-
high risk of sovereign debt crisis (54th).The stability lection system (55th), a high cost of doing business
of its banking system (29th) is relatively strong by con- (43rd), and less-developed human capital (42nd). A high
trast. Despite generally low levels of stability, the finan- degree of IPO activity (4th) contributes to the country’s
cial systems of Pakistan and the Philippines also provide relatively high scores in non-banking financial services.
some indications of strength.The Philippines benefits Peru’s placement at 42nd in the rankings is
from a relatively high degree of currency stability.The supported by the relative stability of its financial system
two countries also show relative advantages in their (22nd) and its banking system in particular (15th).
financial markets, as seen particularly in Pakistan’s fairly However, the country displays weaker performance
developed equity market (27th) and the Philippines’ across most other areas of its financial system, including
active bond market (23rd). Bangladesh’s clear competitive its institutional and business environments, its banking
advantage exists in its retail access to capital (16th).The and non-banking financial services, and, most signifi-
country’s solid performance here can be mainly attributed cantly, its financial markets (50th).Two bright spots are
to its achievement of the highest rate of microfinance seen in Peru’s non-distortionary tax system (16th) and
borrowers in the Index. the fairly good disclosure of financial information (21st)
within the country’s banking system.
Mexico (43rd) and Colombia (46th) demonstrate
20 lower levels of development in a number of areas of
LATIN AMERICA their respective financial systems. A stable currency and
A sound institutional environment and broad financial considerable stability in the banking system represent
access are the key drivers of Panama’s place as the advantages held by both countries. Additionally, Mexico’s
highest-ranked Latin American country on the Index non-banking financial services are boosted by a large
(29th).The country’s business environment is reasonably share of securitization deals (13th) and moderate M&A
developed with a fairly low cost of doing business. In activity (27th). Mexico’s strengths within financial stability
contrast, Panama’s stable banking system (9th) is offset and intermediation appear to translate into good retail
by an unstable currency (45th) and a fairly high risk access to capital (23rd) in the country. Colombia’s area
of a sovereign debt crisis (39th).The country’s banking of relative strength outside of financial stability is seen in
financial services are sizeable (19th) when scaled by the country’s lower cost of doing business (22nd).
GDP, and efficient (23rd). However, its non-banking Argentina (51st) and Venezuela (55th) round out
financial services (46th) are uniformly weak, with low the Latin American rankings and also place among the
IPO and M&A activity as well as limited securitization bottom five countries in the Index. Repeated episodes
and a less-robust insurance sector. Its financial markets of banking crises in Argentina, combined with a high
include a well-developed bond market (11th), which far risk of sovereign debt crisis, impact the overall stability
outpaces the development of its equity market (53rd). of the country’s financial system (53rd). A relative
Chile comes in two ranks below Panama at 31st strength of Argentina’s business environment is its
place this year.The high degree of overall stability in human capital (27th), which is driven by a high tertiary
the country’s financial system (4th) surpasses the level enrollment rate and good-quality management schools.
present in any other Latin American country included However, these advantages are more than countered by
in the FDI. Chile’s very stable banking system (3rd), a distortionary and inefficient tax system as well as the
fairly stable currency, and moderately low risk of a high cost of doing business in the country.Very strong
sovereign debt crisis all work to augment its financial financial information disclosure (2nd) is an advantage of
stability. Financial markets represent the least-developed its banking system, while a high degree of securitization
area of Chile’s financial system.This is particularly so in activity (6th) shows some robustness of non-banking
the case of the country’s bond market (40th). Commercial financial services. As an oil-producing nation,Venezuela
access to capital in the country (8th) is significant, while does show some areas of relative strength across the sta-
retail access is more constrained (28th), leading to a bility of its currency (2nd), a current account surplus
moderate level of overall financial access (25th). (8th), and a low level of external debt (6th).Yet these
few bright spots are not enough to lift Venezuela off of
Part 1.r3 10/14/09 2:22 PM Page 21
Notes
SUB-SAHARAN AFRICA 1 Khan and Senhadji 2000.
South Africa (32nd) displays sound performance 2 Schumpeter held that financial intermediaries select the firms
that utilize an economy’s savings. More formally, his view
in most of the FDI pillars. Its institutional environment
stipulated that financial intermediaries tend to adjust the process
features strong corporate governance practices (7th) of savings allocation rather than alter the savings rate itself. Thus,
complemented by world-class accounting and auditing Schumpeter’s notion of finance and development focuses on the
effect of financial intermediaries on productivity growth and the
standards (1st). Its insurance sector is also well developed, rates of technological change.
with a high degree of penetration (2nd).The country’s 3 For a detailed review of the literature on finance and growth, see
banking system has fared reasonably well through the Levine 2004.
current crisis, ranking 17th of all countries covered by 4 For further discussion of the impact of financial crises on the
the FDI. In contrast, its business environment continues poor, please see Chapter 1.3, “Financial Development, Financial
Crises, and the Millennium Development Goals” by Erik Feyen.
to be negatively impacted by its lower development of
5 Ranciere et al. 2008. This research does not suggest that financial
human capital (50th) and bottlenecks in infrastructure
crises are good for economic growth. Rather, it suggests that
(48th). Retail access to financial services (43rd) is also the systemic risk taking that overcomes financial bottlenecks to
constrained. economic growth is associated with occasional financial crises.
With an overall ranking of 52nd, Nigeria exhibits 6 For a detailed review of the literature on finance and growth, see
Levine 2004.
strength in the stability of its banking system (4th) with
a generally low incidence of crises.Yet such stability is not 7 La Porta et al. 1997, 1998, 1999; Levine 1998, 1999; and Barth et
al. 1999.
accompanied by robust financial intermediation; both
8 Bekaert and Harvey 2005 also held explicitly that reforms that
banking and non-banking financial services demonstrate strengthen a country’s legal environment and investor protection
significant limitations.The banking system is small even are most likely the true cause for better growth prospects.
when scaled by GDP, with low levels of bank deposits 9 Barth et al. 2007.
(54th) and private credit (51st).The development of the 10 Barth et al. 2007.
country’s non-banking financial services sector is nega-
11 La Porta et al. 1997; King and Levine 1993.
tively affected by a less-robust insurance sector as well as
12 Schleifer and Vishny 1997.
limited equity offerings and M&A activity. As in South
22 Africa, capital availability is greater for commercial use 13 Tavares 2002.
than through retail channels, and overall financial access 14 Galor and Zeira 1993.
remains low (53rd). 15 Fitzgerald 2007.
16 See Grilli and Milesi-Ferretti 1995; Kraay 1998; Rodrik 1998; and
Edison et al. 2002a for findings related to the positive relationship
Conclusion between liberalization and growth. The works of Quinn 1997; Klein
and Olivei 1999; and Quinn and Toyoda 2008 support the relation-
The scale of the current financial crisis has rightfully stim- ship. Research presented in Edison et al. 2002b; Chanda 2003;
ulated movements to design and implement coordinated and Arteta et al. 2003 found the relationship to be ambiguous.
to address the most pressing weaknesses and to cultivate 23 Loayza and Ranciere 2002.
existing strengths. 24 Rojas-Suarez 2003. The inaccuracy of these measures was found
Users of this Report are encouraged to explore the to be the result of poor accounting and regulatory frameworks and
an inability to establish the “real” worth of banks due to illiquid
wealth of data in the country profiles and data tables that markets for subordinated debt, bank shares and other liabilities
follow as a useful starting point to inform this analysis. and assets.
———. 2006. “Reaching Out: Access to and Use of Banking Services IMF (International Monetary Fund). 2009. Global Financial Stability
across Countries.” World Bank Policy Research Working Paper Report: Responding to the Financial Crisis and Measuring
No. 3754. Washington DC: World Bank. Systemic Risks. Washington, DC: IMF.
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Ito, H. and M. Chinn. 2007. “Price-based Measurement of Financial Quinn, .D. P. and A. M. Toyoda. 2008. “Does Capital Account
Globalization: A Cross-Country Study of Interest Rate Parity.” Liberalization Lead to Economic Growth? An Empirical
Pacific Economic Review 12 (4): 419–44. Investigation.” The Review of Financial Studies 21 (3): 1403–49.
Khan, M. S. and A. Senhadji. 2000. “Financial Development and Rajan, R. G. and L. Zingales. 2001. “The Great Reversals: The Politics
Economic Growth: An Overview.” IMF Working Paper 00/209. of Financial Development in the 20th Century.” NBER Working
Washington DC: IMF. Paper No. 8178. Cambridge: National Bureau of Economic
Research.
King, R. and R. Levine. 1993. “Finance and Growth: Schumpeter Might
Be Right.” The Quarterly Journal of Economics 108: 717–38. Rojas-Suarez, L. 2003. “Rating Banks in Emerging Markets: What
Credit Rating Agencies Should Learn from Financial Indicators.”
Klein, M. W. and G. Olivei. 1999. “Capital Account Liberalization, Institute for International Economics Working Paper No. 01-06.
Financial Depth and Economic Growth.” NBER Working Paper No. Washington DC: Institute for International Economics.
7384. Cambridge: National Bureau for Economic Research.
Ranciere, R., A. Tornell, and F. Westermann. 2008. “Systemic Crises
Kneiding C., E. Al-Hussayni, and I. Mas. 2009. “Multi-Country Data and Growth.” Quarterly Journal of Economics 123 (1): 359–406.
Sources for Access to Finance.” Washington DC: Consultative
Group to Assist the Poor, The World Bank. Rodrik, D. 1998. “Where Did All The Growth Go? External Shocks,
Social Conflict, and Growth Collapses.” NBER Working Paper
Kraay, A. 1998. “In Search of the Macroeconomic Effects of Capital No. 6350. Cambridge: National Bureau of Economic Research.
Account Liberalization.” Preliminary paper. Washington, DC:
World Bank. Available at http://siteresources.worldbank.org/ Schumpeter, J. A. 1912. Theorie der Wirtschaftlichen Entwicklung.
DEC/Resources/22237_CALMacroEffects_Manuscript.pdf. Leipzig: Dunker & Humblot; The Theory of Economic Development,
trans R. Opie. 1934. Cambridge: Harvard University Press.
La Porta, R., F. Lopez-de-Silanes, and A. Shleifer. 2000. “Government
Ownership of Banks.” NBER Working Paper No. 7620. Shaw, E. S. 1973. Financial Deepening in Economic Development. New
Cambridge: National Bureau of Economic Research. York: Oxford University Press.
La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. W. Vishny. 1997. Shleifer, A. and D. Wolfenzon. 2000. “Investor Protection and Equity
“Legal Determinants of External Finance.” Journal of Finance 52: Markets.” Harvard Institute of Economic Research Paper 1906.
1131–50. Cambridge: Harvard University.
———. 1998. “Law and Finance.” Journal of Political Economy 106: Shleifer, A. and R. Vishny. 1997. “A Survey of Corporate Governance.”
1113–55. Journal of Finance 52 (2): 737–83.
———. 1999. “Corporate Ownership Around the World.” Journal of Tavares, J. 2002. “Firms, Financial Markets and the Law: Institutions
Finance 54: 471–17. and Economic Growth in Portugal.” Paper presented at the
Desenvolvimento Económico Português No Espaço Europeu:
Levine, R. 1997. “Financial Development and Economic Growth: Views Determinantes E Political, sponsored by Banco de Portugal. May
and Agenda.” Journal of Economic Literature 35: 688–726. 24–25.
———. 1998. “The Legal Environment, Banks, and Long-Run Economic
24 Growth.” Journal of Money, Credit and Banking 30 (3): 598–13.
Vittas, D. 1998. “The Role of Non-Bank Financial Intermediaries (with
Particular Reference to Egypt).” Policy Research Working Paper
———. 1999. “Law, Finance, and Economic Growth.” Journal of Series 1892. Washington, DC: World Bank.
Financial Intermediation 8 (1/2): 8–36.
This appendix presents the structure of the Financial the equity and bond market subpillars, and a 20 percent
Development Index (FDI). weight was assigned to the foreign exchange and deriva-
The numbering of the variables matches the num- tives market subpillars.This was done to signify the rela-
bering of the data tables.The number preceding the tively greater importance of equity and bond market
period indicates to which pillar the variable belongs development.
(e.g., variable 1.01 belongs to the first pillar). For many variables, especially those related to the
The hard data indicators used in the FDI are nor- size and depth of the financial system, scaling by GDP
malized on a 1-to-7 scale in order to align them with was deemed necessary to control for country size.
the Executive Opinion Survey’s results.1 The Technical Scaling by GDP also allows for more relevant cross-
Notes and Sources at the end of this Report provide country comparisons.
detailed information on all the hard data indicators.
In some instances, the interaction among different
variables was also captured, because certain variables can Index structure
be considered more beneficial in the presence of others. The percentage next to each category in the list below
For instance, the effect of liberalizing the capital account represents the category’s weight within its immediate
and the domestic financial sector has been found in parent category.The computation of the FDI is based
empirical studies to be mixed, yielding both positive and on successive aggregations of scores, from the variable
negative results. However, the presence of a strong legal level (i.e., the lowest level) all the way up to the overall
and regulatory environment and a developed bond mar- FDI score (i.e., the highest level), using the weights
ket tends to mitigate the negative effects of the liberal- reported below. For example, the score a country
ization process.To account for this, the scores of the achieves on the bond market development subpillar
capital account liberalization, commitments to WTO comprises 30 percent of the country’s financial markets
agreement on trade in services within the financial serv- pillar (VI) score. Likewise, the score a country achieves
ices sector, and domestic financial sector liberalization in the 5th pillar accounts for 14.29 percent of the FDI
score. 25
indexes were adjusted. Any country above the average
standardized scores for the legal and regulatory environ- A dynamic weighting regime removes individual
ment and bond market development experienced posi- variables from the subpillar and pillar calculations when
tive effects as a result of the liberalization process, while no data are present.The weight normally attributed to a
the opposite is true for countries with scores lower than particular variable will be spread among variables for
these averages.2 which data are present.Therefore, the actual weight for
each variable by country may not be exactly as noted.
have taken a very conservative approach to the weight- B. Corporate governance ..................................25.00%
1.04 Extent of incentive-based compensation
ing of variables.We have generally weighted different
1.05 Efficacy of corporate boards
components of the Index equally. 1.06 Reliance on professional management
In some instances, there was sufficient cause to 1.07 Willingness to delegate
assign different weights to the subpillars within the 1.08 Strength of auditing and reporting standards
Index.Within the financial stability pillar, banking sys- 1.09 Ethical behavior of firms
tem stability is weighted more (40 percent) than curren- 1.10 Protection of minority shareholders’ interests
1.11 Official supervisory power
cy stability and risk of sovereign debt crisis (30 percent
1.12 Private monitoring of the banking industry
each).Within the banking financial services pillar there
C. Legal and regulatory issues .........................25.00%
are three subgroups: the size of the banking system, the 1.13 Burden of government regulation
efficiency of the banking system, and the role of finan- 1.14 Centralization of economic policymaking
cial information disclosure.The first two variables were 1.15 Regulation of securities exchanges
weighted 40 percent each in this pillar, while the last 1.16 Property rights
variable was weighted at 20 percent, thus placing more 1.17 Intellectual property protection
1.18 Diversion of public funds
importance on the size and efficiency of the banking
1.19 Public trust of politicians
system than on the role of disclosure.Within the finan- 1.20 Corruption perceptions index
cial markets pillar, a 30 percent weight was assigned to
Part 1.r3 10/14/09 2:22 PM Page 26
1.21 Strength of legal rights index 4th pillar: Banking financial services...............14.29%
A. Size index.......................................................40.00%
D. Contract enforcement...................................25.00% 4.01 Deposit money bank assets to GDP
1.22 Effectiveness of law-making bodies 4.02 Central bank assets to GDP
1.23 Judicial independence 4.03 Financial system deposits to GDP
1.24 Irregular payments in judicial decisions 4.04 M2 to GDP
1.25 Time to enforce a contract 4.05 Private credit to GDP
1.26 Number of procedures to enforce a contract 4.06 Bank deposits to GDP
1.27 Strength of investor protection 4.07 Money market instruments to GDP
1.28 Cost of enforcing contracts
B. Efficiency index..............................................40.00%
4.08 Aggregate profitability indicator
2nd pillar: Business environment ......................14.29% 4.09 Bank overhead costs
4.10 Public ownership of banks
A. Human capital ...............................................25.00%
4.11 Bank operating costs to assets
2.01 Quality of management schools
4.12 Non-performing bank loans to total loans
2.02 Quality of math and science education
2.03 Extent of staff training C. Financial information disclosure..................20.00%
2.04 Local availability of specialized research 4.13 Private credit bureau coverage
and training services 4.14 Public credit registry coverage
2.05 Brain drain and ease of hiring foreign labor
2.06 Tertiary enrollment
5th pillar: Non-banking financial services ......14.29%
B. Taxes ...............................................................25.00%
A. IPO activity.....................................................25.00%
2.07 Irregular payments in tax collection
5.01 IPO market share
2.08 Distortive effect on competition of taxes
5.02 IPO proceeds amount
and subsidies
5.03 Share of world IPOs
2.09 Marginal tax variation
2.10 Time to pay taxes B. M&A activity ..................................................25.00%
5.04 M&A market share
26 C. Infrastructure .................................................25.00%
5.05 M&A transaction value to GDP
2.11 Quality of overall infrastructure
5.06 Share of total number of M&A deals
2.12 Quality of telephone infrastructure
2.13 Internet users C. Insurance ........................................................25.00%
2.14 Broadband Internet subscribers 5.07 Insurance premiums, direct
2.15 Telephone lines 5.08 Insurance density
2.16 Mobile telephone subscribers 5.09 Real growth of direct insurance premiums
5.10 Insurance penetration
D. Cost of doing business .................................25.00%
5.11 Relative value-added of insurance to GDP
2.17 Cost of starting a business
2.18 Cost of registering property D. Securitization.................................................25.00%
2.19 Cost of closing a business 5.12 Securitization to GDP
2.20 Time to start a business 5.13 Share of total number of securitization deals
2.21 Time to register property
2.22 Time to close a business
6th pillar: Financial markets...............................14.29%
A. Foreign exchange markets...........................20.00%
3rd pillar: Financial stability...............................14.29% 6.01 Spot foreign exchange turnover
A. Currency stability ..........................................30.00% 6.02 Outright forward foreign exchange turnover
3.01 Change in real effective exchange rate 6.03 Foreign exchange swap turnover
3.02 External vulnerability indicator B. Derivatives markets ......................................20.00%
3.03 Current account balance to GDP 6.04 Interest rate derivatives turnover: Forward rate
3.04 Dollarization vulnerability indicator agreements
3.05 External debt to GDP (developing economies) 6.05 Interest rate derivatives turnover: Swaps
3.06 Net international investment position to GDP 6.06 Interest rate derivatives turnover: Options
(advanced economies) 6.07 Foreign exchange derivatives turnover: Currency
B. Banking system stability ..............................40.00% swaps
3.07 Frequency of banking crises 6.08 Foreign exchange derivatives turnover: Options
3.08 Financial strengths indicator C. Equity market development.........................30.00%
3.09 Manageability of private debt 6.09 Stock market turnover ratio
3.10 Aggregate measure of real estate bubbles 6.10 Stock market capitalization to GDP
C. Risk of sovereign debt crisis ........................30.00% 6.11 Stock market value traded to GDP
3.11 Local currency sovereign rating 6.12 Number of listed companies per 10,000 people
3.12 Foreign currency sovereign rating
3.13 Aggregate macroprudential indicator
3.14 Manageability of public debt (Cont’d.)
3.15 Credit default swap spreads
Part 1.r3 10/14/09 2:22 PM Page 27
Notes
1 See Browne et al. 2008. The standard formula for converting hard
data is the following:
27
(country score – sample minimum)
6 x + 1
(sample maximum – sample minimum)
2 The average score for the legal and regulatory environment was
4.07. The average score for the bond market development was
3.07.
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Part 1.r3 10/14/09 2:22 PM Page 29
The financial tsunami was associated with a dramatic for countries that entered the crisis with large current
increase in risk aversion; massive liquidity shortages in account deficits; these countries experienced sharp
global financial markets; plunging asset prices in both depreciation pressures on their currencies because of
advanced and developing economies; increased emerging their large and unsustainable external balances.
market spreads; the unraveling of carry trades, which
translated into a sizeable weakening of the high-yielding Financial and bank credit channel
emerging market currencies; downward pressures on The direct impact of the global financial crisis on banks
currencies; and a significant retrenchment of bank lend- in emerging markets depended on the amount of toxic
ing to emerging economies.Thus, the global financial assets they were holding.With very few exceptions, this
crisis was seen to hit emerging markets through several exposure was extremely limited in the financial institu-
channels of transmission and re-coupling that will be tions of emerging markets. Among the Asian countries,
considered in more detail in the next section for example, China’s financial sector is still largely con-
trolled by the government, and because of this it had
only limited exposure to the sub-prime mortgages in
Transmission channels the United States.
The global financial crisis hit emerging markets through However, the indirect financial effects of the crisis
(1) trade channels, (2) financial channels, and (3) com- were more significant for emerging markets despite
modity channels via the sharp drop in commodity prices. their sound macroeconomic and financial fundamentals.
Among the strongest transmission channels, however, Such effects were reflected in the significant plunges in
was the trade channel, as the recession sharply lowered the stock markets of emerging countries and a sharp
demand for emerging market exports. reduction in capital flows, which in some cases took the
form of a sudden stop of capital.The latter was apparent
Trade and commodity channels especially in countries with external imbalances, such as
An important factor in the impressive growth of emerg- those in emerging Europe. As increasingly risk-averse
ing markets since 2004 was the rapid increase in their and capital-losing investors and financial institutions in
export earnings; this was especially the case for those advanced economies pulled capital out from emerging
30 in Asia. However, when the recession hit the United market economies, the stock markets, bond markets, and
States and other G-7 countries, their demand for currencies of emerging countries contracted sharply.
exports from emerging market economies diminished Since the ample global liquidity prior to the global
sharply, leaving them vulnerable to declining export financial crisis left many emerging markets exceedingly
receipts. China, Korea, Malaysia, Singapore, and Thailand dependent on external sources of capital, they became
were particularly hard hit through the trade channel. increasingly vulnerable to a sudden stop of these capital
It is worth noting that in January 2009, exports flows.Thus, when banks and international investors in
of goods in emerging markets plunged by 25 percent advanced economies significantly decreased their exposure
compared to a year earlier.The fall in the US dollar to emerging markets, funding for sovereign debt and
value of exports was also the result of plunging com- corporate borrowing severely dried up. Consequently, the
modity prices: after peaking in mid 2008, prices fell cost of external financing soared for emerging markets
rapidly, reflecting the fall in external demand for the with widening spreads on sovereign external debt and
exports of goods and services of emerging markets. corporate borrowing.
For example, oil prices peaked above US$140 a barrel The emerging markets whose banking systems are
in the summer of 2008, but then plunged to US$30 mostly owned by foreign financial institutions—such as
by the first quarter of 2009.The sharp fall in world those in emerging Europe—were relatively hurt more
trade and in commodity prices was also a result of a by the global liquidity and credit crunch.This occurred
“blockage” of world commercial credit after the Lehman as the capital losses in the home countries of banks
collapse. Some estimates suggest that almost 80 percent with massive exposure to emerging markets led them
of world trade is fairly contingent upon credit; clearly to retrench and cut their exposures to their foreign sub-
the lack of access to trade credit contributed to the sharp sidiaries in emerging markets.Yet it should be noted
fall in world exports.2 The World Bank estimated that that, for the most part, the problems of emerging market
world trade, which was growing over 7 percent in 2007, banks were limited to liquidity issues rather than concerns
will contract by about 10 percent in 2009 and will be about insolvency.Thus, emerging market banks did not
practically flat in 2010.3 need bank recapitalization funds as much as they needed
The sharp fall in commodity prices severely dam- liquidity support. However, the credit crunch and
aged the export earnings of a large number of countries reduced bank lending led to lower levels of investment
that are major exporters of commodities. Even non- and lower growth rates in 2009.
energy commodity prices plunged significantly, with
detrimental effects for emerging markets that export such
goods.4 The contraction in trade is particularly serious
Part 1.r3 10/14/09 2:22 PM Page 31
Current account imbalances and capital flows to of the global financial system—that is, from advanced
emerging markets economies.
The whirl in global asset markets since 2007 set off
sizeable fluctuations in global capital flows.Within this Four differences in terms of domestic and international
context, highly tenacious imbalances have unpredictably policy response
lessened, and the sudden stop of capital flows into Not only were there differences in terms of the origins
emerging markets implied significant corrections in of the financial crisis, there were also significant differ-
those markets’ external imbalances. Most notable were ences in the way the domestic and international policy
the corrections in current account imbalances. After responses to the crisis took form.
reaching a peak at the end of 2007/early 2008, current
account imbalances—especially those between advanced International policy response
economies—narrowed. In the case of emerging markets, In 2007, the conventional wisdom held that the
however, current account corrections occurred when International Monetary Fund (IMF) itself was in a crisis
global commodity prices plunged. because it had almost no clients left for its emergency
Thus, US$300 billion was knocked out of the lending facilities after the crises of the 1990s and of
Gulf Cooperation Council’s (GCC) external surplus the first part of the current decade.This was the case
of GCC countries in 2008. Russia’s current account because most emerging economies improved their macro
surplus has fallen by US$80 billion. Latin America’s and financial fundamentals and graduated from the
deficit has risen as the impact of the recession has been IMF’s emergency lending. But the most recent global
felt.10 In the case of Central and Eastern Europe (CEE), financial crisis has restored the role of the IMF as a
corrections in current account imbalances gained pace at major international lender of last resort.
the start of 2009 because of large currency depreciations Specifically, countries with macro and financial
and plunging domestic demand, import demand being weaknesses had to rely on traditional IMF conditionality
no exception. Specifically, the severe credit constraints lending (loans in exchange for macro/financial reforms).
endured by households and businesses resulted in a severe At the same time, countries with stronger macro funda-
retrenchment in import demand, leading in turn to hefty mentals were also at risk of a liquidity run.Thus, the
32 drops in their current accounts. Changing current account IMF resorted to creating new facilities to provide large
dynamics may also occur in case when a default on capital liquidity support with no strings attached to countries
payments occurs, either through debt restructuring or with strong fundamentals, which were also at risk of a
capital controls, or both.11 The changing dynamics of liquidity run in light of the reversal of capital inflows.
external imbalances may also be reflected in the plum- Hence, since the summer of 2008, the IMF has
meting of the deficits of the private sector—in light of authorized at least US$50 billion in “standby arrange-
the collapse of private demand—in addition to the sky- ments” (SBAs) to 14 countries. SBAs are intended to
rocketing of public-sector deficits.12 address financing needs for countries with less sound
The global economy fell sharply in the fourth quarter economic fundamentals and are conditional on macro-
of 2008 and the first quarter of 2009. GDP in the three economic targets, mainly fiscal targets. Hungary, Pakistan,
largest economies—the United States, the Euro area, and and Ukraine made the biggest arrangements.What is
Japan (G-3)—fell by an average of 8.8 percent, seasonally even more significant is the fact that amounts provided
adjusted annual rate, over that six-month period—a rate were generally much larger—relative to quota—than
of decline not previously witnessed in the post-war the rescue packages provided to emerging market
period.This pattern of extreme weakness was shared economies in any of the crises in the 1990s.To give
across all economies, and was propagated by a collapse just one example: in 1997, a very large emerging market
in world trade and global industrial activity. economy, such as Korea, received an IMF package that
Emerging markets endured large portfolio outflows was less than US$10 billion. In 2008 a much smaller
at the end of 2008; there is a high likelihood that such economy, such as Romania, received a package of US$20
outflows will persist beyond 2009 because of prolonged billion.
pressures for leveraged investors to cast off assets and the The IMF has so far provided US$3.9 billion out
risk of further redemptions from emerging market of the US$7.4 billion loan approved to Pakistan. In
funds, in addition to crowding out from government- Hungary’s case, the IMF announced a US$15.7 billion
guaranteed mature market bonds.13 agreement for an economic rescue package under a
17-month SBA. Hungary obtained a total of US$25.5
billion in a loan package from the IMF, the European
Differences between then and now Union, and the World Bank as early as October 2008 to
In previous crisis episodes, financial pressures in emerging avoid an economic crisis caused by its high level of debt.
markets were triggered by macro and financial vulnera- The IMF also expanded the magnitude its “normal”
bilities internal to those markets. In the current crisis, loans, stretched the conditions under which it can allow
instead, shocks have instead originated from the center
Part 1.r3 10/14/09 2:22 PM Page 33
Emerging countries also implemented measures that countercyclical monetary easing, and the overall slow-
would guarantee financing to priority borrowers such as down of economic growth.
small- and medium-sized enterprises.These measures The currency policy response differed widely across
have successfully contributed to lowering the cost of the emerging markets. Some economies aggressively
financing and maintaining the flow of bank credit in intervened to prevent excessive currency depreciation,
emerging markets.21 thus losing a significant amount of their foreign reserves
The largest fiscal stimuli were implemented in in their attempt to minimize currency movements.These
China, Hong Kong, Kazakhstan, Kuwait, Russia, and countries include Malaysia and Peru. Other economies,
the United Arab Emirates; each economy’s stimulus such as Chile, kept the intervention to a minimum, and
amounted to at least 10 percent of GDP,22 with the aim thus experienced a greater depreciation of their currency.
of boosting expenditure to counterbalance the decline Others, such as Brazil, Croatia, and Korea, took the mid-
in demand. Policy measures that involved propping up dle road, both allowing the currency to depreciate from
the private sector of emerging markets were introduced the external pressures and also intervening to prevent
in cases of debt roll-over incapability—particularly with excess depreciation.Yet others, such as Russia, initially
regard to the foreign component of such debt obliga- intervened aggressively to prevent currency depreciation,
tions.This was clear in Latin America, where the size- but then allowed significant depreciation once the stock
able drop in public external debt provided governments of foreign reserves became dangerously low.
with additional scope to alleviate some of the stress in The differential currency and reserve response
the private sector. reflected the size of the shocks experienced by different
CEE countries have gone through a brutal liquidity countries as well as some of their individual structural
and credit crunch because of their banks’ dependence on features.The terms of trade shocks experienced by Chile
external funding.As a result of their limited fiscal ability— were larger than those of Peru, and thus warranted a
apart from Russia and Kazakhstan—the amount of stim- greater depreciation. Liability dollarization is much greater
ulus implemented by their governments has been trivial in in Peru than in Chile and Brazil; thus the Peruvian
the face of the recession they have endured. If anything, authorities are reluctant to let the currency depreciate,
the emerging European countries with fiscal weakness— given the risks of negative balance sheet effects. Russia
34 such as Latvia and Hungary—had to implement fiscal was concerned about the risk of a bank run (it has a
contractions in order to restore policy credibility. history of such runs during episodes of currency crisis)
Also, because of the better financial conditions of and about the balance sheet effects of a depreciation of
emerging market banks and the fact that their problems the foreign currency liabilities of financial institutions
were associated with liquidity rather than solvency, most and corporate firms; thus, the government’s massive
emerging market domestic policy responses did not intervention in the foreign exchange market allowed
include much recapitalization for banks. But given the economic agents who needed to hedge foreign currency
rising rate of defaults—which may jeopardize banking liabilities to do so. Once such hedging occurred, letting
stability—that could be expected in some weaker the currency sharply depreciate became less risky.
emerging markets, and given also the fact that asset quality Malaysia has been concerned about excessive currency
deterioration is a lagging indicator of an economic depreciation since it re-pegged to the US dollar in 1998,
slowdown,23 an increase in the non-performing loans but it allowed limited currency depreciation within its
in emerging market banks may require a reconsideration managed basket peg.
of the policy responses for banks. One new important element of policy response in
this crisis is that the IMF did not request those countries
Currency: No pressure to depreciate with a fixed exchange rate regime that were in distress
Generally, the global financial crisis shed light on the to depreciate their currency as a condition for the IMF’s
foreign exchange liquidity shortages with which emerg- financial support.The clearest example of this policy is
ing markets had to deal.With the collapse of Lehman that of Latvia, where, so far, the IMF has—however ten-
Brothers, emerging market currencies depreciated sharply; tatively—accepted the view of the country’s authorities
Latin America is one prominent example, as countries and the European Union that currency depreciation
in the region witnessed severe currency depreciations.24 should be avoided. Concerns about regional contagion,
Some governments have responded by boosting foreign the uncertainty about the impact devaluation would have
exchange liquidity to restrain currency depreciation, on Latvia’s exports in light of the global slowdown, and
depending on the amount of foreign exchange reserves about the effects of such depreciation on the foreign
accumulated by the respective governments.The currency banks operating in Latvia and the severe balance sheet
pressures of emerging countries were driven by a com- effects of such devaluation would have in a country
bination of factors: the outflow of foreign capital, the with a large stock of foreign currency liabilities are
sharp fall in commodity prices, the weakening of exter- behind this resistance to a depreciation. A devaluation in
nal balances following the fall in exports, the significant Latvia could put pressure on the currency boards of
Estonia and Lithuania, jeopardizing an already wobbly
Part 1.r3 10/14/09 2:22 PM Page 35
emerging markets as they become more cautious about ———. 2009b. “Fallout for the Emerging Market Economies.” BIS 79th
Annual Report. Available at http://www.bis.org/publ/arpdf/
the sequencing of financial sector liberalization, financial ar2009e5.pdf.
deepening,30 and financial development in general.
BNP Paribas. 2009. “Flexible Credit Lines and Emerging Markets.”
Available at www.rgemonitor.com/
redir.php?clid=13746&sid=1&tgid=0&cid=341280.
Notes Deutsche Bank Research. 2009. “Emerging Market Anti-Crisis
1 Truman 2009. Measures: Separating the Wheat from the Chaff.” Available at
www.dbresearch.com/PROD/DBR.../PROD0000000000242794.P
2 For further discussion of the effects of financial stress on DF.
economic activity, see La Caxia 2009.
Euromonitor. 2009. “The Global Financial Crisis: Eastern Europe and
3 For a comparison of world trade figures in goods and services for CIS Hit Hard.” Available at http://www.euromonitor.com/
the years 2007–10, see World Bank 2009a: Chapter 1, p. 24, The_global_financial_crisis_Eastern_Europe_and_CIS_hit_hard.
Figure 1.1.
IMF (International Monetary Fund). 2009a. Global Financial Stability
4 Commodity price index figures can be seen in Figure 1.2 of World Report: Responding to the Financial Crisis and Measuring
Bank 2009a, chapter 1, p. 26. Systemic Risks. Available at http://www.imf.org/external/pubs/ft/
gfsr/2009/01/index.htm.
5 Kato 2009b.
———. 2009b. “IMF Overhauls Lending Framework.” Press Release
6 Jara et al. 2009.
No. 09/85. March 24. Available at http://www.imf.org/external/np/
7 BIS 2009a. sec/pr/2009/pr0985.htm.
8 Morrison 2009. IIF (Institute of International Finance). 2009a. Capital Flows to Emerging
Markets. Available at http://www.iif.com/press/press+90.php.
9 Euromonitor 2009.
———. 2009b. Global Economic Monitor.
10 IIF 2009a.
———. 2009c. “2009 to See Sharp Declines in Capital Flows to
11 IIF 2009a. Emerging Markets, says IIF.” Press Release, January 27. Available
at http://www.iif.com/press/press+90.php.
12 For further discussion of emerging market economies’ external
financing, see IFF 2009a. Jara, A., R. Moreno, and C. E. Tovar. 2009. “The Global Crisis and Latin
America: Financial Impact and Policy Responses.” BIS Quarterly
13 IMF 2009a.
Review. June. Available at http://www.bis.org/publ/qtrpdf/
14 Kato 2009a. r_qt0906f.pdf?noframes=1.
15 BNP Paribas 2009. Kato, T. 2009a. “The IMF’s Response to the Global Crisis.” Available at
36 http://www.imf.org/external/np/speeches/2009/062509.htm.
16 IMF 2009b.
———. 2009b. “The Global Economic and Financial Outlook and
17 World Bank 2009b. Challenges for Emerging Economies.” IMF Keynote Speech at
the 21st Meeting of the Central Bank Governors’ Club,
18 World Bank 2009b.
Kazakhstan, May 28–31. Available at http://www.imf.org/external/
19 See World Bank 2009b for multilateral development banks’ np/speeches/2009/052809.htm.
planned 2009–11 financial response to the crisis.
La Caxia. 2009. “From Subprime Mortgage Crisis to Global Recession:
20 The CMI initiative has the goal of establishing a network of bilateral The Transmission to Emerging Economies.” Available at
swap arrangements among ASEAN+3 countries to deal with http://www.pdf.lacaixa.comunicacions.com/im/eng/
short-term liquidity difficulties and to aid the current international 200907box_eng.pdf.
financial arrangements.
Morrison, W. M. 2009. “China and the Global Financial Crisis:
21 BIS 2009b. Implications for the United States.” June. Available at
http://fpc.state.gov/documents/organization/125931.pdf
22 Deutsche Bank 2009.
RGE Monitor. 2009. “Global Economic Outlook: Q3 and Beyond.” July.
23 Deutsche Bank 2009. Available at www.rgemonitor.com.
24 Less than a month after the collapse of Lehman Brothers, the Roubini, N. 2009. “Latvi’s Currency Crisis Is a Rerun of Argentina’s.”
currencies of Brazil and Mexico depreciated by almost 30 percent. Available at www.rgemonitor.com/roubini-monitor/257052/
See Jara et al. 2009. latvias_currency_crisis_is_a_rerun_of_argentinas.
25 Roubini 2009. Truman, E. 2009. “The Global Financial Crisis: Lessons Learned
and Challenges for Developing Countries.” Available at
26 A bail-out is an injection of capital to prevent a situation of
www. rgemonitor.com/piie monitor/257209/the_global_financial_
bankruptcy, insolvency, or liquidation.
crisis_lessons_learned_and_challenges_for_developing_countries.
27 IMF 2009a.
World Bank. 2009a. Global Monitoring Report. Available at
28 World Bank 2009a. http://web.worldbank.org/WBSITE/EXTERNAL/EXTDEC/
EXTGLOBALMONITOR/EXTGLOMONREP2009/
29 Kato 2009b. 0,,contentMDK:22149019~enableDHL:True~menuPK:5924427~pa
gePK:64168445~piPK:64168309~theSitePK:5924405,00.html.
30 RGE Monitor 2009.
World Bank. 2009b. Global Development Finance 2009: Charting a
Global Recovery. Available at http://web.worldbank.org/WBSITE/
EXTERNAL/EXTDEC/EXTDECPROSPECTS/EXTGDF/EXTGDF2009/
References 0,,contentMDK:22218327~menuPK:5924239~pagePK:64168445~
piPK:64168309~theSitePK:5924232,00.html.
BIS (Bank for International Settlements). 2009a. “Global Financial Crisis:
Causes, Impact, Policy Responses and Lessons.” Speech by Dr.
Rakesh Mohan, Deputy Governor of the Reserve Bank of India, at
the 7th Annual India Business Forum Conference, London Business
School, London, April 23. Available at http://www.bis.org/review/
r090506d.pdf?noframes=1.
Part 1.r3 10/14/09 2:22 PM Page 37
1. Eradicate extreme poverty 1. Halve proportion of people who live on <$1 a day
Poverty
and hunger 2. Halve proportion of people who suffer from hunger
Gender 3. Promote gender equality and 4. Access for all genders to primary and secondary
Equality empower women schooling (2005) and all levels of education (2015)
MILLENNIUM DEVELOPMENT GOALS
there are several other channels through which financial countries over the period 1960–95, it would have
development contributes to the advancement of the enjoyed a boost to income per capita growth of 0.6
tightly interlinked MDGs.3 percentage points per year.5
In addition to the role played by domestic financial
Indirect benefits of finance-induced economic growth development in achieving the MDGs, international
A large literature shows that during normal times, financial integration can also contribute to growth by
both developed and developing countries with healthy allowing capital-constrained countries to tap into cheaper
banking and capital markets enjoy stronger per capita foreign savings, especially if capital comes in the form
income growth than countries without such markets of longer-term investments and is supported by sound
because they are able to allocate more of society’s savings macroeconomic and fiscal frameworks. For example,
to superior investment opportunities and also able to economic and domestic credit growth in many develop-
distribute and manage risks better.4 One study estimates ing countries has benefited from the large net private
that if India’s financial development—as measured by capital flows that reached over a trillion US dollars
the ratio of bank credit to the private sector as a fraction in 2007, amounting, for some countries, to almost 8
of GDP—had been at the average level of developing percent of GDP. However, the capital flows also left
Part 1.r3 10/14/09 2:22 PM Page 39
SHORT-TERM LONG-TERM
Investment opportunities to EFFECTS EFFECTS
Direct effects increase productivity
of access to the
financial system: Consumption smoothing
Credit
FINANCIAL DEVELOPMENT
Higher wages
Indirect effects of More business opportunities
general economic
growth Public investment in
• education
• healthcare
• infrastructure
many countries vulnerable, as discussed in the section services, which are better accessible when the financial
39
on the dark side of finance. sector is more developed, are:
Formal financial development not only spurs
growth, but it is also especially pro-poor. Recent studies • Credit for investments. Affordable credit gives
show that financial development results in fewer people households and entrepreneurs the opportunity to
living in poverty, since the poor indirectly benefit from improve their productivity by investing basic assets
economic growth from the subsequent increase in job such as in tractors, seeds, healthcare, or an educa-
and business opportunities and real wages, as well as tion—all of which contribute to future poverty
from investment in core healthcare and educational reduction. In particular, credit becomes more acces-
infrastructure (see Figure 2).6 In addition, research finds sible for the poor when financial development comes
that financial development leads to faster income with the opportunity to use their land as collateral.
growth for the poor than for the average person; that Evidence also suggests that access to credit has a
is why it reduces inequality. One study suggests, for large impact on hunger alleviation.8 Moreover, to
example, that the average real income of the poor in the extent that a more developed financial sector
Brazil would have grown at more than 1.5 percent cares only about the quality of an investment
annually instead of 0 percent over the period 1960–99 opportunity, talent is more important than family
if Brazil had had the same level of financial development wealth, gender, or the ethnicity of the prospective
as Korea.7 Economic growth and poverty alleviation borrower, thus helping to level the playing field.
have been shown to have beneficial effects on other
areas, including child mortality, nutrition, and schooling. • Savings, insurance, and consumer credit.
In this way, financial development contributes indirectly Savings services often provide the poor with more
to other MDGs (see Figure 1). attractive returns than those obtained by investing
in low-yielding livestock or in jewelry or cash that
Benefits of direct access to the financial system is at risk of theft, fire, or floods. In addition, savings,
Financial development can also help the poor by level- insurance, and consumer credit services can help
ing the playing field. Direct access to the financial system households smooth their income between harvests
helps people to better plan for their future, improve and reduce the impact of shocks such as job loss,
their diets, access healthcare, start a business, and provide drought, sickness, and death of a family member.
their children with an education (Figure 2). Examples of For example, weather insurance in Malawi helps
ways the poor benefit from different types of financial farmers cope with adverse weather conditions and
avoid hunger and inefficient sale of productive assets.
Part 1.r3 10/14/09 2:22 PM Page 40
Similarly, microinsurance programs in countries and liquidity spirals that lead to a credit crunch with
such as Nigeria have helped low-income house- negative spillover effects to the real sector. And although
holds to access basic health services, including credible currency pegs can help restore economic confi-
HIV/AIDS treatment. dence and reduce inflation in a developing country, they
can also suddenly become vulnerable to a run.
• Payment services. Payment services provided by Thus it is no wonder that systemic financial crises
the financial system are safer, cheaper, and easier have been pervasive: during the period 1970–2000,
than the traditional transfer methods used by the about 100 major currency, sovereign debt, and banking
poor, which are often cash based.These services cut crises were registered in emerging and developing mar-
out expensive middlemen, reduce traveling costs, kets.These crises can come at great economic costs in
encourage transactions between parties unfamiliar the form of (quasi)-fiscal expenditures, output drops,
with each other, and facilitate remittance flows that and long recovery times. For example, GDP contracted
in many developing countries represent a significant by 14 percent, 8 percent, and 6 percent, respectively,
portion of a household’s income. For example, the during the crises in Indonesia (1998), Malaysia (1998),
M-PESA system in countries such as Kenya enables and Mexico (1995). Overall, analysis suggests that during
users to transfer funds via mobile phones.9 the average crisis GDP contracts by 1.4 percent.16
Empirical analysis also supports the existence of How financial crises affect the poor
direct links between access to the formal financial system No two crises are the same, and specific circumstances
for the poor and other MDGs besides poverty reduction. ultimately determine how an economy is affected.
For example, one study shows that income shocks in Moreover, a crisis affects the various participants in an
Tanzania lead to fewer increases in child labor when economy differently and can produce both winners and
households have better access to credit.10 In addition, losers, even among the poor. For example, poor farmers
there is evidence that the incidence of child labor is can actually benefit from high food prices, while the
lower in countries with better-developed financial urban poor suffer.That said, a financial crisis likely has a
systems.11 Another study shows that Peruvian house- net negative effect on the most vulnerable people through
40 holds that face lower borrowing constraints experience a combination of the following private- , public- , and
higher primary school attendance.12 And there is abundant financial-sector channels:17
anecdotal evidence that the microfinance movement can
help the MDGs, especially the empowerment of women.13 • Lower income through employment shocks.
Microlending has increased women’s earning capacity The negative interaction between the financial
and “say” in their households, allowing them to take sector and the real economy slowdown triggers
their futures into their own hands.14 adverse labor market effects that first affect poor,
low-skilled workers. For example, Cote d’Ivoire’s
crisis in the early 1980s saw formal employment
The dark side of finance decline by almost 40 percent. As a consequence,
However, although the poor benefit disproportionately the poor can be forced to take pay cuts, work fewer
from financial development, they also tend to suffer dis- hours, or seek (informal) employment elsewhere—
proportionately from financial crises because they are less which can involve high relocation costs, often to
able to insulate themselves against shocks than wealthier rural areas where labor market pressures rise further
people. Note that typically the poor in wealthier coun- as a result. On average, unemployment increases by
tries are wealthier. In addition, wealthier countries have 1.4 percent during the crisis.18 Experience with
a better capacity absorb the shock. previous crises indicates that it takes at least four to
five years for employment to return to pre-crisis
The fragility of financial systems levels after economic recovery starts.
Financial systems are inherently fragile because they
spur growth by transforming liquid savings into long- • Potentially higher costs caused by relative
term investments that promise a return in an uncertain price changes. A weakening currency boosts
future. Some bankruptcies, job loss, and even an occa- import prices, particularly of imported foods.This
sional crisis can be a sign of healthy risk taking by hurts the urban poor, especially, although some
providers of capital.15 groups—such as poor farmers, for example—can
However, fragility has often been further exacerbated actually benefit from high food prices, as was the
by large inflows of volatile foreign capital, weak institu- case in Indonesia. In addition, currency deprecia-
tional arrangements, and irresponsible macroeconomic tions provoke a disruption in the labor dynamics
policy.This undermines the growth-enhancing function between the tradable and nontradable sectors and
of the financial system and can lead to public mistrust. can increase the debt burden of governments and
During crises, this fragility can induce adverse solvency
Part 1.r3 10/14/09 2:22 PM Page 41
Figure 3: The dark side: How a financial crisis affects the MDGs
Income loss
POTENTIAL POVERTY TRAPS
• Job loss
• Fewer hours
• Lower wages Short-term effects Long-term effects
FINANCIAL, PRIVATE- , AND PUBLIC-SECTOR SHOCKS
Higher costs
• Food prices
• Relocation costs
42
crisis complained that children were eating much The impact of the current global financial crisis
less and were less able to concentrate.27 The financial crisis that started in developed economies
and plunged them into recession has now spread around
• Education. Children’s education affects their the globe to developing countries.31 The impact is reflected
productivity as adults. However, in Thailand’s crisis, in sharp drops in average economic growth of developing
children were forced to find food on garbage sites countries to 1.6 percent, down precipitously from an
to support their families instead of going to school.28 average of over 8 percent in 2006–07.The shock comes
Research suggests that gross secondary enrollment on top of the effects of the 2007–08 spike in oil and food
in Mexico would have been 11 percentage points prices that had already left many countries vulnerable
higher in 1991 if the economy had grown in the and pushed as many as an additional 200 million people
1980s instead of remaining stagnant after the 1982 into poverty.
crisis.29 The Indonesia Family Life Survey recorded The crisis has triggered unprecedented policy
a decline in enrollment and an increase in dropouts actions around the world. Among these are liquidity
during the crisis. provision facilities between countries, bank capital
injections, the extension of deposit insurance schemes,
• Gender equality. Often girls are the first to be and the issuance of government guarantees on other
pulled out of school, and women are among the financial sector liabilities.The crisis has clearly shown
first to lose their jobs in a crisis.These conse- that rethinking the financial architecture is necessary,
quences can widen the gender gap over the long and much has already been written on this topic.32
term. Another manifestation of gender inequality Clearly, the global financial crisis will have far-reaching
is seen in one sobering study on child mortality in policy consequences as necessary improvements are
developing countries, which estimates that a large implemented in the areas of financial supervision,
GDP contraction results in an average increase in regulation, and market infrastructure.
girl infant mortality of 7.4 deaths per 1,000 births,
while the increase of boy mortality is 1.5 per Channels of transmission to developing countries
1,000.30 Some emerging countries had unsustainable macroeco-
nomic policies and financed credit booms with foreign
capital that left them exposed to a sudden deterioration
Part 1.r3 10/14/09 2:22 PM Page 43
remain inherently fragile and future financial crises will 22 Lustig 2000.
occur. International organizations such as the World 23 Lustig 2000.
Bank and the International Monetary Fund can play a 24 Frankenberg et al. 1999.
role in helping governments cope with the crisis and
25 See, for example, Ferreira and Schady 2008, which also studies
avoid poverty traps that can have lasting and damaging the impact of shocks on educational attainment.
effects on economic growth and the MDGs. 26 Lustig 2000.
In addition, countries should strengthen their safety
27 World Bank 1998, Chapter 5.
nets and pro-poor policies before a crisis hits.These
28 World Bank 1998, Chapter 5.
contingency plans should be comprehensive and include
public work programs, food for education programs, and 29 Lustig 2000.
targeted conditional cash transfers for schooling, health- 30 Baird et al. 2007.
care, and food. Prior planning will make continued 31 Many reports about the impact of the financial crisis have been
delivery of core social services during crises much written recently, from which most numbers in this section are
drawn. These publications include IMF 2009; World Bank 2008,
more likely, as past experience has shown that ad hoc 2009a; 2009b; and United Nations 2009a.
improvisations in the heat of the crisis are often much 32 For a short overview, see for example Stephanou 2009.
less effective or even have adverse effects on the poor
33 World Bank 2009a.
because they are poorly administered or even abused.
34 Lustig 2000.
Moreover, previous crises have also shown that distribu-
tive political conflicts can significantly reduce public
spending programs specifically targeted to the poor,
putting them even more at risk when they need support References
Baird, S., J. Friedman, and N. Schady. 2007. “Aggregate Income
the most. But well-thought-out safety nets and crisis Shocks and Infant Mortality in the Developing World.” World Bank
44 policies might cost as little 1 percent of GDP,34 and Policy Research Working Paper 4346. Washington, DC: World
Bank.
would do much to mitigate the worst effects of a crisis.
Baldacci, E., L. de Mello, and G. Inchauste. 2002. “Financial Crises,
Poverty, and Income Distribution.” IMF Working Paper 02/4.
Washington, DC: IMF.
Notes
Beck, T., A. Demirgüç-Kunt, and R. Levine. 2007. “Finance, Inequality,
1 Ranciere et al. 2008.
and the Poor.” Journal of Economic Growth 12 (1): 27–49.
2 See also the United Nations’ The Millennium Development Goals
Beck, T., R. Levine, and N. Loayza. 2000. “Finance and the Sources of
Report 2009.
Growth.” Journal of Financial Economics 58 (1–2): 261–300.
3 See Claessens and Feyen 2006a for an overview of the impact
Beegle, K., R. Dehejia, and R. Gatti. 2003. “Child Labor, Income Shocks
of financial sector development on the Millennium Development
and Access to Credit.” World Bank Policy Research Working
Goals.
Paper 3075. Washington, DC: World Bank.
4 See Levine 2005 and Demirgüç-Kunt and Levine 2008 for an
Claessens, C. and E. Feyen. 2006a. “Financial Sector Development and
overview of the academic finance and growth literature.
the Millennium Development Goals.” World Bank Policy Research
5 Beck et al. 2000. Working Paper 89. Washington, DC: World Bank.
6 See, for example, Beck et al. 2007. ———. 2006b. “Finance and Hunger: Empirical Evidence of the
Agricultural Productivity Channel.” World Bank Policy Research
7 See Demirgüç-Kunt and Levine 2009 and Claessens and Perotti Working Paper 4080. Washington, DC: World Bank.
2007 for an overview of the links between finance and inequality.
Claessens, C. and E. Perotti. 2007. “The Links between Finance and
8 Claessens and Feyen 2006b. Inequality: Channels and Evidence.” World Bank mimeo.
9 See Rosenberg 2008. Dehejia, R. H. and R. Gatti. 2002. “Child Labor: The Role of Income
Variability and Access to Credit in a Cross Section of Countries.”
10 Beegle et al. 2003.
World Bank Policy Research Working Paper 2767. Washington,
11 Dehejia and Gatti 2002. DC: World Bank.
United Nations. 2009a. “The World Financial and Economic Crisis and
Its Impact on Development.” Report of the Secretary-General for
the Conference on the World Financial and Economic Crisis and
Its Impact on Development. New York, June 24–26.
World Bank. 1998. “East Asia: The Road to Recovery.” World Bank
mimeo. Washington, DC: World Bank.
Part 2
Country/Economy Profiles
Part 1.r3 10/14/09 2:22 PM Page 48
Part 1.r3 10/14/09 2:22 PM Page 49
1 2 3 4 5 6 7
The first section of each Country/Economy Profile 1st pillar: Institutional environment .........................................50
Factors, policies, and institutions
3.2
INPUTS
• Population, GDP, and related data come from the 3rd pillar: Financial stability......................................................53
Currency stability..........................................................................24
3.7
4.4
Banking system stability..............................................................48 4.0
International Monetary Fund’s World Economic Risk of sovereign debt crisis ......................................................52 2.5
1 2 3 4 5 6 7
Financial intermediation
• Public debt figures are from the Economist Equity market development ........................................................54
Bond market development..........................................................32
1.2
2.0
1 2 3 4 5 6 7
in March 2009. Private debt data come from the Retail access.................................................................................41 2.0
1 2 3 4 5 6 7
OUTPUTS
Page 2
The Financial Development Index in detail Argentina
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
This page presents the rank achieved by a country on INDICATOR RANK/55 SCORE BEST PERFORMER SCORE
Contract enforcement
Multiple (2) ............................9.3
Multiple (3) ..........................10.0
Taxes
United Arab Emirates ............6.0
Finland .................................93.2
2.07 Irregular payments in tax collection ......................................49 .....■ .................2.8 Singapore ..............................6.5
List of Countries/Economies
List of Countries/Economies
2: Country/Economy Profiles
Argentina
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................39.7 US$ bn
27.7%
GDP (US$ billions), 2008 .........................................................326.5 ■ Public debt securities .......147.2
47.0%
GDP (current prices) per capita, 2008 ..............................8,214.1 ■ Private debt securities........20.6
GDP (PPP) as share (%) of world total, 2008 ........................0.83 ■ Banking deposits .................58.4
Average rate of real GDP growth (%), 2004–08....................8.46
18.7% ■ Equity securities ..................86.7
Total 312.9
6.6%
Total/GDP: 120.2%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 53
2: Country/Economy Profiles
Argentina
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................33 .....■ .................4.4 United States ........................5.4
1.05 Efficacy of corporate boards .................................................48 .....■ .................4.3 Sweden .................................5.9
1.06 Reliance on professional management .................................33 .....■ .................4.7 Sweden .................................6.5
1.07 Willingness to delegate.........................................................39 .....■ .................3.9 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................50 .....■ .................3.9 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................52 .....■ .................3.2 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................50 .....■ .................3.7 Sweden .................................6.0
1.11 Official supervisory power ....................................................20 .....■ ...............11.0 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................54 .....■ .................2.0 Singapore ..............................6.5
1.23 Judicial independence ...........................................................53 .....■ .................2.4 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................50 .....■ .................2.8 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................37 .....■ .............590.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................33 .....■ ...............36.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................43 .....■ .................4.7 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................14 .....■ ...............16.5 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................49 .....■ .................2.8 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......54 .....■ .................2.3 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................53 .....■ ...............32.2 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................44 .....■ .............453.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................47 .....■ .................3.2 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................45 .....■ .................5.5 Finland ...................................6.9
2.13 Internet users ........................................................................35 .....■ ...............25.9 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................30 .....■ .................6.6 Denmark..............................36.0
2.15 Telephone lines .....................................................................32 .....■ ...............24.0 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................28 .....■ .............102.2 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 54
2: Country/Economy Profiles
Argentina
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Argentina
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Australia
Key indicators Financial assets by major type, 2007
4.0%
Population (millions), 2008 .......................................................21.3 US$ bn
GDP (US$ billions), 2008 ......................................................1,010.7 36.8% ■ Public debt securities .......140.0
GDP (current prices) per capita, 2008 ............................47,400.4 32.9% ■ Private debt securities...1,160.7
GDP (PPP) as share (%) of world total, 2008 ........................1.16 ■ Banking deposits ...............926.8
Average rate of real GDP growth (%), 2004–08....................3.11 ■ Equity securities .............1,298.4
Total 3,525.9
26.3%
Total/GDP: 387.6%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 57
2: Country/Economy Profiles
Australia
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ................................4 .....■ .................5.1 United States ........................5.4
1.05 Efficacy of corporate boards ...................................................4 .....■ .................5.6 Sweden .................................5.9
1.06 Reliance on professional management ...................................6 .....■ .................6.0 Sweden .................................6.5
1.07 Willingness to delegate.........................................................11 .....■ .................5.0 Sweden .................................6.2
1.08 Strength of auditing and reporting standards..........................8 .....■ .................6.0 South Africa...........................6.2
1.09 Ethical behavior of firms..........................................................9 .....■ .................6.2 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................10 .....■ .................5.2 Sweden .................................6.0
1.11 Official supervisory power ......................................................5 .....■ ...............13.0 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry .............................2 .....■ .................8.0 South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .......................................4 .....■ .................5.6 Singapore ..............................6.5
1.23 Judicial independence .............................................................4 .....■ .................6.4 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ..................................9 .....■ .................6.0 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................16 .....■ .............395.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .........................8 .....■ ...............28.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................25 .....■ .................5.7 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................21 .....■ ...............20.7 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ........................................8 .....■ .................6.0 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......13 .....■ .................4.8 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................15 .....■ .................2.8 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................11 .....■ .............107.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................25 .....■ .................5.0 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................39 .....■ .................5.9 Finland ...................................6.9
2.13 Internet users ........................................................................12 .....■ ...............69.0 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................15 .....■ ...............23.3 Denmark..............................36.0
2.15 Telephone lines .....................................................................11 .....■ ...............47.1 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................27 .....■ .............102.5 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 58
2: Country/Economy Profiles
Australia
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Australia
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Austria
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................8.3 17.4% 16.7% US$ bn
GDP (US$ billions), 2008 .........................................................415.3 ■ Public debt securities .......220.6
GDP (current prices) per capita, 2008 ............................50,098.4 ■ Private debt securities......505.1
GDP (PPP) as share (%) of world total, 2008 ........................0.48 ■ Banking deposits ...............363.1
Average rate of real GDP growth (%), 2004–08....................2.72 ■ Equity securities ................228.7
27.6%
38.3% Total 1,317.5
Total/GDP: 354.9%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 61
2: Country/Economy Profiles
Austria
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................22 .....■ .................4.6 United States ........................5.4
1.05 Efficacy of corporate boards .................................................21 .....■ .................5.1 Sweden .................................5.9
1.06 Reliance on professional management .................................14 .....■ .................5.6 Sweden .................................6.5
1.07 Willingness to delegate.........................................................10 .....■ .................5.0 Sweden .................................6.2
1.08 Strength of auditing and reporting standards..........................9 .....■ .................6.0 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................10 .....■ .................6.2 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................11 .....■ .................5.2 Sweden .................................6.0
1.11 Official supervisory power ....................................................22 .....■ ...............10.5 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................19 .....■ .................4.3 Singapore ..............................6.5
1.23 Judicial independence ...........................................................11 .....■ .................6.1 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................15 .....■ .................5.8 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................17 .....■ .............397.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .........................4 .....■ ...............25.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................50 .....■ .................4.0 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................19 .....■ ...............18.0 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................15 .....■ .................5.8 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......17 .....■ .................4.7 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................33 .....■ .................9.9 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................19 .....■ .............170.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure ...............................................4 .....■ .................6.6 Switzerland............................6.8
2.12 Quality of telephone infrastructure .........................................3 .....■ .................6.9 Finland ...................................6.9
2.13 Internet users ........................................................................15 .....■ ...............67.0 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................19 .....■ ...............19.4 Denmark..............................36.0
2.15 Telephone lines .....................................................................20 .....■ ...............40.7 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................10 .....■ .............118.6 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 62
2: Country/Economy Profiles
Austria
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Austria
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Bahrain
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................0.8 9.9% US$ bn
GDP (US$ billions), 2008 ...........................................................21.2 ■ Public debt securities ...........5.3
10.3%
GDP (current prices) per capita, 2008 ............................27,247.8 ■ Private debt securities..........5.4
GDP (PPP) as share (%) of world total, 2008 ........................0.04 ■ Banking deposits .................14.0
53.2%
Average rate of real GDP growth (%), 2004–08....................6.87 ■ Equity securities ..................28.1
26.6% Total 52.9
Total/GDP: 286.7%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 65
2: Country/Economy Profiles
Bahrain
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................31 .....■ .................4.5 United States ........................5.4
1.05 Efficacy of corporate boards .................................................25 .....■ .................4.9 Sweden .................................5.9
1.06 Reliance on professional management .................................45 .....■ .................4.1 Sweden .................................6.5
1.07 Willingness to delegate.........................................................23 .....■ .................4.5 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................21 .....■ .................5.3 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................21 .....■ .................5.3 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................19 .....■ .................5.0 Sweden .................................6.0
1.11 Official supervisory power ....................................................13 .....■ ...............12.0 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry .............................2 .....■ .................8.0 South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................29 .....■ .................3.7 Singapore ..............................6.5
1.23 Judicial independence ...........................................................22 .....■ .................5.0 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................20 .....■ .................5.4 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................42 .....■ .............635.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................53 .....■ ...............48.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................25 .....■ .................5.7 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................13 .....■ ...............14.7 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................16 .....■ .................5.7 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ........4 .....■ .................5.7 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ..............................................................9 .....■ .................0.0 Germany ..............................–6.9
2.10 Time to pay taxes ....................................................................2 .....■ ...............36.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................18 .....■ .................5.4 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................27 .....■ .................6.3 Finland ...................................6.9
2.13 Internet users ........................................................................29 .....■ ...............33.2 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................25 .....■ .................9.1 Denmark..............................36.0
2.15 Telephone lines .....................................................................30 .....■ ...............26.3 Switzerland..........................65.9
2.16 Mobile telephone subscribers.................................................4 .....■ .............148.3 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 66
2: Country/Economy Profiles
Bahrain
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Bahrain
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Bangladesh
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .....................................................161.9 10.0% US$ bn
GDP (US$ billions), 2008 ...........................................................81.9 ■ Public debt securities .........25.0
36.8%
GDP (current prices) per capita, 2008 .................................506.1 ■ Private debt securities.........n/a
GDP (PPP) as share (%) of world total, 2008 ........................0.33 ■ Banking deposits .................36.2
Average rate of real GDP growth (%), 2004–08....................6.17 ■ Equity securities ....................6.8
Total/GDP: 92.3%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 69
2: Country/Economy Profiles
Bangladesh
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................55 .....■ .................2.8 United States ........................5.4
1.05 Efficacy of corporate boards .................................................52 .....■ .................3.9 Sweden .................................5.9
1.06 Reliance on professional management .................................51 .....■ .................3.9 Sweden .................................6.5
1.07 Willingness to delegate.........................................................55 .....■ .................2.9 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................55 .....■ .................3.6 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................54 .....■ .................3.1 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................51 .....■ .................3.6 Sweden .................................6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................42 .....■ .................2.9 Singapore ..............................6.5
1.23 Judicial independence ...........................................................44 .....■ .................3.5 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................54 .....■ .................2.2 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................55 .....■ ..........1,442.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................45 .....■ ...............41.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................13 .....■ .................6.7 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................54 .....■ ...............63.3 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................54 .....■ .................2.2 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......31 .....■ .................4.1 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................48 .....■ ...............17.7 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................35 .....■ .............302.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................54 .....■ .................2.5 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................55 .....■ .................4.4 Finland ...................................6.9
2.13 Internet users ........................................................................55 .....■ .................0.3 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................55 .....■ .................0.0 Denmark..............................36.0
2.15 Telephone lines .....................................................................55 .....■ .................0.7 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................54 .....■ ...............21.7 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 70
2: Country/Economy Profiles
Bangladesh
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Bangladesh
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Belgium
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................10.8 21.5% 21.4% US$ bn
GDP (US$ billions), 2008 .........................................................506.4 ■ Public debt securities .......384.5
GDP (current prices) per capita, 2008 ............................47,107.8 ■ Private debt securities......537.4
GDP (PPP) as share (%) of world total, 2008 ........................0.57 ■ Banking deposits ...............491.0
Average rate of real GDP growth (%), 2004–08....................2.33 ■ Equity securities ................386.4
27.3% 29.9%
Total 1,799.3
Total/GDP: 392.0%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 73
2: Country/Economy Profiles
Belgium
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................26 .....■ .................4.5 United States ........................5.4
1.05 Efficacy of corporate boards .................................................13 .....■ .................5.2 Sweden .................................5.9
1.06 Reliance on professional management .................................16 .....■ .................5.5 Sweden .................................6.5
1.07 Willingness to delegate.........................................................12 .....■ .................5.0 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................14 .....■ .................5.6 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................16 .....■ .................5.5 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................16 .....■ .................5.1 Sweden .................................6.0
1.11 Official supervisory power ....................................................11 .....■ ...............12.5 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ...........................22 .....■ .................6.0 South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................35 .....■ .................3.4 Singapore ..............................6.5
1.23 Judicial independence ...........................................................17 .....■ .................5.4 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................19 .....■ .................5.4 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................27 .....■ .............505.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .........................4 .....■ ...............25.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................11 .....■ .................7.0 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................16 .....■ ...............16.6 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................20 .....■ .................5.4 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......26 .....■ .................4.3 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................52 .....■ ...............28.1 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................18 .....■ .............156.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................13 .....■ .................5.8 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................21 .....■ .................6.5 Finland ...................................6.9
2.13 Internet users ........................................................................16 .....■ ...............67.0 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................10 .....■ ...............26.0 Denmark..............................36.0
2.15 Telephone lines .....................................................................15 .....■ ...............44.6 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................26 .....■ .............102.7 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 74
2: Country/Economy Profiles
Belgium
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Belgium
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Brazil
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .....................................................191.9 18.3% US$ bn
GDP (US$ billions), 2008 ......................................................1,572.8 ■ Public debt securities .......601.0
GDP (current prices) per capita, 2008 ..............................8,197.4 41.8% ■ Private debt securities......325.6
9.9%
GDP (PPP) as share (%) of world total, 2008 ........................2.86 ■ Banking deposits ...............984.3
Average rate of real GDP growth (%), 2004–08....................4.72 ■ Equity securities .............1,370.4
Total 3,281.3
30.0%
Total/GDP: 246.1%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 77
2: Country/Economy Profiles
Brazil
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................29 .....■ .................4.5 United States ........................5.4
1.05 Efficacy of corporate boards .................................................32 .....■ .................4.7 Sweden .................................5.9
1.06 Reliance on professional management .................................26 .....■ .................5.1 Sweden .................................6.5
1.07 Willingness to delegate.........................................................31 .....■ .................4.2 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................41 .....■ .................4.7 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................44 .....■ .................3.6 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................31 .....■ .................4.6 Sweden .................................6.0
1.11 Official supervisory power ......................................................1 .....■ ...............14.0 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................52 .....■ .................2.3 Singapore ..............................6.5
1.23 Judicial independence ...........................................................42 .....■ .................3.6 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................39 .....■ .................3.7 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................41 .....■ .............616.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................50 .....■ ...............45.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................34 .....■ .................5.3 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................14 .....■ ...............16.5 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................39 .....■ .................3.7 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......45 .....■ .................3.8 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................40 .....■ ...............12.7 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................55 .....■ ..........2,600.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................42 .....■ .................3.4 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................22 .....■ .................6.5 Finland ...................................6.9
2.13 Internet users ........................................................................28 .....■ ...............35.2 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................36 .....■ .................3.5 Denmark..............................36.0
2.15 Telephone lines .....................................................................37 .....■ ...............20.5 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................43 .....■ ...............63.1 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 78
2: Country/Economy Profiles
Brazil
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Brazil
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Canada
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................33.3 16.2% US$ bn
GDP (US$ billions), 2008 ......................................................1,511.0 ■ Public debt securities .......915.8
GDP (current prices) per capita, 2008 ............................45,428.2 38.7% ■ Private debt securities......822.1
14.5%
GDP (PPP) as share (%) of world total, 2008 ........................1.89 ■ Banking deposits ............1,730.9
Average rate of real GDP growth (%), 2004–08....................2.46 ■ Equity securities .............2,186.6
Total 5,655.4
30.6%
Total/GDP: 393.8%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 81
2: Country/Economy Profiles
Canada
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ................................3 .....■ .................5.2 United States ........................5.4
1.05 Efficacy of corporate boards ...................................................3 .....■ .................5.7 Sweden .................................5.9
1.06 Reliance on professional management ...................................8 .....■ .................6.0 Sweden .................................6.5
1.07 Willingness to delegate...........................................................9 .....■ .................5.1 Sweden .................................6.2
1.08 Strength of auditing and reporting standards..........................6 .....■ .................6.1 South Africa...........................6.2
1.09 Ethical behavior of firms..........................................................8 .....■ .................6.2 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests........................6 .....■ .................5.6 Sweden .................................6.0
1.11 Official supervisory power ....................................................34 .....■ .................7.0 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .......................................7 .....■ .................5.1 Singapore ..............................6.5
1.23 Judicial independence .............................................................9 .....■ .................6.2 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ..................................8 .....■ .................6.0 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................35 .....■ .............570.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................33 .....■ ...............36.0 Ireland..................................20.0
1.27 Strength of investor protection ...............................................4 .....■ .................8.3 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................23 .....■ ...............22.3 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................10 .....■ .................6.0 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......25 .....■ .................4.3 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ..............................................................2 .....■ ...............–6.0 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................13 .....■ .............119.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................11 .....■ .................5.9 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................11 .....■ .................6.8 Finland ...................................6.9
2.13 Internet users ..........................................................................8 .....■ ...............73.0 Norway ................................85.0
2.14 Broadband Internet subscribers ..............................................8 .....■ ...............27.6 Denmark..............................36.0
2.15 Telephone lines .......................................................................6 .....■ ...............55.5 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................45 .....■ ...............61.7 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 82
2: Country/Economy Profiles
Canada
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Canada
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Chile
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................16.8 1.9% US$ bn
10.3%
GDP (US$ billions), 2008 .........................................................169.6 ■ Public debt securities ...........6.7
GDP (current prices) per capita, 2008 ............................10,123.8 ■ Private debt securities........35.8
GDP (PPP) as share (%) of world total, 2008 ........................0.36 ■ Banking deposits .................92.1
26.5%
Average rate of real GDP growth (%), 2004–08....................4.81 ■ Equity securities ................212.9
61.3%
Total 347.6
Total/GDP: 212.1%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 85
2: Country/Economy Profiles
Chile
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................12 .....■ .................4.8 United States ........................5.4
1.05 Efficacy of corporate boards .................................................10 .....■ .................5.4 Sweden .................................5.9
1.06 Reliance on professional management .................................18 .....■ .................5.4 Sweden .................................6.5
1.07 Willingness to delegate.........................................................35 .....■ .................4.1 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................16 .....■ .................5.6 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................17 .....■ .................5.5 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................18 .....■ .................5.0 Sweden .................................6.0
1.11 Official supervisory power ....................................................20 .....■ ...............11.0 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ...........................22 .....■ .................6.0 South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................31 .....■ .................3.6 Singapore ..............................6.5
1.23 Judicial independence ...........................................................26 .....■ .................4.7 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................12 .....■ .................6.0 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................26 .....■ .............480.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................33 .....■ ...............36.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................21 .....■ .................6.0 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................39 .....■ ...............28.6 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................12 .....■ .................6.0 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ........5 .....■ .................5.5 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ..............................................................7 .....■ ...............–1.3 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................36 .....■ .............316.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................17 .....■ .................5.6 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................13 .....■ .................6.7 Finland ...................................6.9
2.13 Internet users ........................................................................31 .....■ ...............30.9 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................29 .....■ .................7.9 Denmark..............................36.0
2.15 Telephone lines .....................................................................36 .....■ ...............20.7 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................37 .....■ ...............83.7 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 86
2: Country/Economy Profiles
Chile
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Chile
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
China
Key indicators Financial assets by major type, 2007
Population (millions), 2008 ..................................................1,327.7 4.8% US$ bn
4.6%
GDP (US$ billions), 2008 ......................................................4,401.6 ■ Public debt securities .......598.6
GDP (current prices) per capita, 2008 ..............................3,315.3 ■ Private debt securities......583.3
GDP (PPP) as share (%) of world total, 2008 ......................11.40 ■ Banking deposits ............5,155.3
49.6%
Average rate of real GDP growth (%), 2004–08..................10.83 41.0% ■ Equity securities .............6,226.3
Total 12,563.5
Total/GDP: 371.4%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 89
2: Country/Economy Profiles
China
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................18 .....■ .................4.6 United States ........................5.4
1.05 Efficacy of corporate boards .................................................45 .....■ .................4.4 Sweden .................................5.9
1.06 Reliance on professional management .................................31 .....■ .................4.9 Sweden .................................6.5
1.07 Willingness to delegate.........................................................41 .....■ .................3.9 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................42 .....■ .................4.7 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................31 .....■ .................4.3 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................39 .....■ .................4.3 Sweden .................................6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................17 .....■ .................4.4 Singapore ..............................6.5
1.23 Judicial independence ...........................................................36 .....■ .................3.9 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................32 .....■ .................4.3 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................19 .....■ .............406.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................25 .....■ ...............34.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................38 .....■ .................5.0 Singapore ..............................9.3
1.28 Cost of enforcing contracts.....................................................5 .....■ ...............11.1 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................33 .....■ .................4.3 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......18 .....■ .................4.7 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................41 .....■ ...............13.0 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................46 .....■ .............504.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................36 .....■ .................4.0 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................40 .....■ .................5.8 Finland ...................................6.9
2.13 Internet users ........................................................................46 .....■ ...............16.0 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................32 .....■ .................5.0 Denmark..............................36.0
2.15 Telephone lines .....................................................................28 .....■ ...............27.5 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................48 .....■ ...............41.2 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 90
2: Country/Economy Profiles
China
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
China
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Colombia
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................48.3 US$ bn
GDP (US$ billions), 2008 .........................................................240.7 ■ Public debt securities .........90.8
38.6%
GDP (current prices) per capita, 2008 ..............................4,985.2 ■ Private debt securities..........4.2
GDP (PPP) as share (%) of world total, 2008 ........................0.58 43.4% ■ Banking deposits .................38.2
Average rate of real GDP growth (%), 2004–08....................5.48 ■ Equity securities ................102.0
1.8%
Total 235.1
16.2%
Total/GDP: 113.1%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 93
2: Country/Economy Profiles
Colombia
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................49 .....■ .................3.7 United States ........................5.4
1.05 Efficacy of corporate boards .................................................38 .....■ .................4.5 Sweden .................................5.9
1.06 Reliance on professional management .................................43 .....■ .................4.2 Sweden .................................6.5
1.07 Willingness to delegate.........................................................42 .....■ .................3.8 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................46 .....■ .................4.2 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................37 .....■ .................3.9 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................45 .....■ .................4.1 Sweden .................................6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................41 .....■ .................3.0 Singapore ..............................6.5
1.23 Judicial independence ...........................................................41 .....■ .................3.6 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................38 .....■ .................3.7 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................53 .....■ ..........1,346.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................25 .....■ ...............34.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................16 .....■ .................6.3 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................53 .....■ ...............52.6 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................38 .....■ .................3.7 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......46 .....■ .................3.8 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................46 .....■ ...............15.1 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................29 .....■ .............256.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................43 .....■ .................3.4 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................34 .....■ .................6.0 Finland ...................................6.9
2.13 Internet users ........................................................................34 .....■ ...............26.2 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................39 .....■ .................2.6 Denmark..............................36.0
2.15 Telephone lines .....................................................................41 .....■ ...............17.2 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................42 .....■ ...............73.5 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 94
2: Country/Economy Profiles
Colombia
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Colombia
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Czech Republic
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................10.3 16.0% US$ bn
25.8%
GDP (US$ billions), 2008 .........................................................217.1 ■ Public debt securities .........45.4
GDP (current prices) per capita, 2008 ............................21,027.5 9.0% ■ Private debt securities........25.5
GDP (PPP) as share (%) of world total, 2008 ........................0.38 ■ Banking deposits ...............139.8
Average rate of real GDP growth (%), 2004–08....................5.35 ■ Equity securities ..................73.4
Total 284.2
49.2%
Total/GDP: 163.4%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 97
2: Country/Economy Profiles
Czech Republic
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................20 .....■ .................4.6 United States ........................5.4
1.05 Efficacy of corporate boards .................................................15 .....■ .................5.2 Sweden .................................5.9
1.06 Reliance on professional management .................................20 .....■ .................5.3 Sweden .................................6.5
1.07 Willingness to delegate.........................................................25 .....■ .................4.4 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................26 .....■ .................5.3 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................38 .....■ .................3.8 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................46 .....■ .................4.1 Sweden .................................6.0
1.11 Official supervisory power ....................................................24 .....■ ...............10.0 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ...........................22 .....■ .................6.0 South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................39 .....■ .................3.2 Singapore ..............................6.5
1.23 Judicial independence ...........................................................35 .....■ .................4.0 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................28 .....■ .................4.4 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................46 .....■ .............820.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .........................7 .....■ ...............27.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................38 .....■ .................5.0 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................46 .....■ ...............33.0 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................31 .....■ .................4.4 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......36 .....■ .................4.1 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................45 .....■ ...............15.0 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................52 .....■ .............930.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................30 .....■ .................4.5 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................25 .....■ .................6.4 Finland ...................................6.9
2.13 Internet users ........................................................................26 .....■ ...............49.0 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................24 .....■ ...............12.9 Denmark..............................36.0
2.15 Telephone lines .....................................................................33 .....■ ...............23.6 Switzerland..........................65.9
2.16 Mobile telephone subscribers.................................................7 .....■ .............124.9 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 98
2: Country/Economy Profiles
Czech Republic
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Czech Republic
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Denmark
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................5.5 6.6% US$ bn
GDP (US$ billions), 2008 .........................................................342.9 22.6%
■ Public debt securities .........81.5
GDP (current prices) per capita, 2008 ............................62,625.6 ■ Private debt securities......613.2
GDP (PPP) as share (%) of world total, 2008 ........................0.30 ■ Banking deposits ...............257.8
Average rate of real GDP growth (%), 2004–08....................1.72 ■ Equity securities ................277.7
Total/GDP: 396.2%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 101
2: Country/Economy Profiles
Denmark
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................16 .....■ .................4.6 United States ........................5.4
1.05 Efficacy of corporate boards ...................................................8 .....■ .................5.5 Sweden .................................5.9
1.06 Reliance on professional management ...................................4 .....■ .................6.1 Sweden .................................6.5
1.07 Willingness to delegate...........................................................2 .....■ .................5.9 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................11 .....■ .................5.9 South Africa...........................6.2
1.09 Ethical behavior of firms..........................................................3 .....■ .................6.6 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests........................4 .....■ .................5.7 Sweden .................................6.0
1.11 Official supervisory power ....................................................24 .....■ ...............10.0 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .......................................2 .....■ .................6.0 Singapore ..............................6.5
1.23 Judicial independence .............................................................2 .....■ .................6.5 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ..................................4 .....■ .................6.4 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................14 .....■ .............380.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................25 .....■ ...............34.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................16 .....■ .................6.3 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................25 .....■ ...............23.3 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ........................................3 .....■ .................6.5 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......11 .....■ .................4.9 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................13 .....■ .................1.5 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................16 .....■ .............135.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure ...............................................8 .....■ .................6.3 Switzerland............................6.8
2.12 Quality of telephone infrastructure .........................................9 .....■ .................6.8 Finland ...................................6.9
2.13 Internet users ..........................................................................3 .....■ ...............81.0 Norway ................................85.0
2.14 Broadband Internet subscribers ..............................................1 .....■ ...............36.0 Denmark..............................36.0
2.15 Telephone lines .......................................................................9 .....■ ...............51.9 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................18 .....■ .............114.5 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 102
2: Country/Economy Profiles
Denmark
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Denmark
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Egypt
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................75.0 US$ bn
GDP (US$ billions), 2008 .........................................................162.2 35.9% 33.8% ■ Public debt securities .......131.1
GDP (current prices) per capita, 2008 ..............................2,160.9 ■ Private debt securities..........3.1
GDP (PPP) as share (%) of world total, 2008 ........................0.64 ■ Banking deposits ...............114.5
Average rate of real GDP growth (%), 2004–08....................5.93 ■ Equity securities ................139.3
0.8%
Total 388.0
29.5%
Total/GDP: 297.7%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 105
2: Country/Economy Profiles
Egypt
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................48 .....■ .................3.8 United States ........................5.4
1.05 Efficacy of corporate boards .................................................36 .....■ .................4.6 Sweden .................................5.9
1.06 Reliance on professional management .................................54 .....■ .................3.7 Sweden .................................6.5
1.07 Willingness to delegate.........................................................24 .....■ .................4.4 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................30 .....■ .................5.1 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................30 .....■ .................4.4 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................32 .....■ .................4.6 Sweden .................................6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................33 .....■ .................3.5 Singapore ..............................6.5
1.23 Judicial independence ...........................................................37 .....■ .................3.9 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................44 .....■ .................3.4 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................51 .....■ ..........1,010.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................48 .....■ ...............42.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................34 .....■ .................5.3 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................34 .....■ ...............26.2 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................44 .....■ .................3.4 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......30 .....■ .................4.1 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................24 .....■ .................6.4 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................49 .....■ .............711.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure .............................................31 .....■ .................4.4 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................18 .....■ .................6.6 Finland ...................................6.9
2.13 Internet users ........................................................................47 .....■ ...............14.0 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................49 .....■ .................0.6 Denmark..............................36.0
2.15 Telephone lines .....................................................................44 .....■ ...............14.9 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................49 .....■ ...............39.8 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 106
2: Country/Economy Profiles
Egypt
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Egypt
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Finland
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................5.3 12.2% US$ bn
GDP (US$ billions), 2008 .........................................................274.0 ■ Public debt securities .........87.8
GDP (current prices) per capita, 2008 ............................51,989.4 ■ Private debt securities......121.7
17.0%
GDP (PPP) as share (%) of world total, 2008 ........................0.28 51.4% ■ Banking deposits ...............139.3
Average rate of real GDP growth (%), 2004–08....................3.30 ■ Equity securities ................369.2
Total 717.9
19.4%
Total/GDP: 291.5%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 109
2: Country/Economy Profiles
Finland
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................30 .....■ .................4.5 United States ........................5.4
1.05 Efficacy of corporate boards ...................................................5 .....■ .................5.6 Sweden .................................5.9
1.06 Reliance on professional management ...................................3 .....■ .................6.2 Sweden .................................6.5
1.07 Willingness to delegate...........................................................6 .....■ .................5.4 Sweden .................................6.2
1.08 Strength of auditing and reporting standards..........................2 .....■ .................6.2 South Africa...........................6.2
1.09 Ethical behavior of firms..........................................................2 .....■ .................6.6 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests........................2 .....■ .................5.9 Sweden .................................6.0
1.11 Official supervisory power ....................................................28 .....■ .................9.0 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ...........................22 .....■ .................6.0 South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .......................................6 .....■ .................5.4 Singapore ..............................6.5
1.23 Judicial independence .............................................................3 .....■ .................6.5 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ..................................3 .....■ .................6.4 Singapore ..............................6.6
1.25 Time to enforce a contract ......................................................5 .....■ .............235.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................20 .....■ ...............32.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................25 .....■ .................5.7 Singapore ..............................9.3
1.28 Cost of enforcing contracts.....................................................4 .....■ ...............10.4 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ........................................4 .....■ .................6.5 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......15 .....■ .................4.7 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................31 .....■ .................9.0 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................32 .....■ .............269.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure ...............................................7 .....■ .................6.5 Switzerland............................6.8
2.12 Quality of telephone infrastructure .........................................1 .....■ .................6.9 Finland ...................................6.9
2.13 Internet users ..........................................................................5 .....■ ...............79.0 Norway ................................85.0
2.14 Broadband Internet subscribers ..............................................6 .....■ ...............30.6 Denmark..............................36.0
2.15 Telephone lines .....................................................................22 .....■ ...............33.0 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................15 .....■ .............115.2 United Arab Emirates ........176.5
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 110
2: Country/Economy Profiles
Finland
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Finland
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
France
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................62.3 17.8% US$ bn
GDP (US$ billions), 2008 ......................................................2,865.7 29.8%
■ Public debt securities ....1,655.3
GDP (current prices) per capita, 2008 ............................46,015.9 ■ Private debt securities...2,907.9
GDP (PPP) as share (%) of world total, 2008 ........................3.08 ■ Banking deposits ............1,958.2
Average rate of real GDP growth (%), 2004–08....................1.86 ■ Equity securities .............2,771.2
31.3%
Total 9,292.6
21.1%
Total/GDP: 358.3%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 113
2: Country/Economy Profiles
France
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ................................8 .....■ .................5.0 United States ........................5.4
1.05 Efficacy of corporate boards .................................................22 .....■ .................5.1 Sweden .................................5.9
1.06 Reliance on professional management .................................23 .....■ .................5.2 Sweden .................................6.5
1.07 Willingness to delegate.........................................................32 .....■ .................4.2 Sweden .................................6.2
1.08 Strength of auditing and reporting standards........................17 .....■ .................5.6 South Africa...........................6.2
1.09 Ethical behavior of firms........................................................20 .....■ .................5.4 Sweden .................................6.7
1.10 Protection of minority shareholders’ interests......................26 .....■ .................4.9 Sweden .................................6.0
1.11 Official supervisory power ....................................................28 .....■ .................9.0 Multiple (3) ..........................14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................12 .....■ .................4.7 Singapore ..............................6.5
1.23 Judicial independence ...........................................................25 .....■ .................4.8 Sweden .................................6.6
1.24 Irregular payments in judicial decisions ................................23 .....■ .................5.1 Singapore ..............................6.6
1.25 Time to enforce a contract ....................................................11 .....■ .............331.0 Singapore ..........................150.0
1.26 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Ireland..................................20.0
1.27 Strength of investor protection .............................................34 .....■ .................5.3 Singapore ..............................9.3
1.28 Cost of enforcing contracts...................................................18 .....■ ...............17.4 United States ........................9.4
Taxes
2.07 Irregular payments in tax collection ......................................23 .....■ .................5.1 Singapore ..............................6.5
2.08 Distortive effect on competition of taxes and subsidies ......22 .....■ .................4.5 Hong Kong SAR ....................6.1
2.09 Marginal tax variation ............................................................51 .....■ ...............26.1 Germany ..............................–6.9
2.10 Time to pay taxes ..................................................................15 .....■ .............132.0 United Arab Emirates ..........12.0
Infrastructure
2.11 Quality of overall infrastructure ...............................................5 .....■ .................6.6 Switzerland............................6.8
2.12 Quality of telephone infrastructure .......................................12 .....■ .................6.7 Finland ...................................6.9
2.13 Internet users ........................................................................25 .....■ ...............51.2 Norway ................................85.0
2.14 Broadband Internet subscribers ............................................12 .....■ ...............25.2 Denmark..............................36.0
2.15 Telephone lines .......................................................................5 .....■ ...............56.5 Switzerland..........................65.9
2.16 Mobile telephone subscribers...............................................32 .....■ ...............89.8 United Arab Emirates ........176.5
(Cont’d.)
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2: Country/Economy Profiles
France
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
France
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Germany
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................82.1 17.7% 18.1% US$ bn
GDP (US$ billions), 2008 ......................................................3,667.5 ■ Public debt securities ....2,155.5
GDP (current prices) per capita, 2008 ............................44,660.4 ■ Private debt securities...3,910.5
GDP (PPP) as share (%) of world total, 2008 ........................4.23 ■ Banking deposits ............3,740.5
Average rate of real GDP growth (%), 2004–08....................1.74 ■ Equity securities .............2,105.5
31.4% 32.8%
Total 11,911.9
Total/GDP: 358.7%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 117
2: Country/Economy Profiles
Germany
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ................................6 .....■ .................5.0 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................12 .....■ .................5.3 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................13 .....■ .................5.7 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate...........................................................8 .....■ .................5.2 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................12 .....■ .................5.8 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................11 .....■ .................5.9 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests........................8 .....■ .................5.4 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................28 .....■ .................9.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................15 .....■ .................4.6 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence .............................................................5 .....■ .................6.4 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................16 .....■ .................5.6 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................15 .....■ .............394.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................38 .....■ .................5.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................11 .....■ ...............14.4 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 118
2: Country/Economy Profiles
Germany
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Germany
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Total 1,896.7
Total/GDP: 916.2%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 121
2: Country/Economy Profiles
Hong Kong SAR
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ................................5 .....■ .................5.1 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................29 .....■ .................4.7 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................27 .....■ .................5.0 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................30 .....■ .................4.2 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards..........................7 .....■ .................6.0 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................13 .....■ .................5.8 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................22 .....■ .................5.0 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................25 .....■ .................4.1 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................12 .....■ .................6.0 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................11 .....■ .................6.0 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ......................................................2 .....■ .............211.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .........................3 .....■ ...............24.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection ...............................................2 .....■ .................9.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................12 .....■ ...............14.5 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
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2: Country/Economy Profiles
2: Country/Economy Profiles
Hong Kong SAR
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Hungary
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................10.1 20.3% US$ bn
GDP (US$ billions), 2008 .........................................................156.3 ■ Public debt securities .........93.2
39.7%
GDP (current prices) per capita, 2008 ............................15,542.3 ■ Private debt securities........21.7
GDP (PPP) as share (%) of world total, 2008 ........................0.29 ■ Banking deposits .................72.3
Average rate of real GDP growth (%), 2004–08....................2.91 ■ Equity securities ..................47.7
30.8% Total 234.8
9.2%
Total/GDP: 169.6%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 125
2: Country/Economy Profiles
Hungary
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................34 .....■ .................4.4 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................43 .....■ .................4.5 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................46 .....■ .................4.1 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................54 .....■ .................3.0 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................23 .....■ .................5.3 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................46 .....■ .................3.6 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................42 .....■ .................4.3 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ......................................................1 .....■ ...............14.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................48 .....■ .................2.5 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................31 .....■ .................4.1 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................33 .....■ .................4.3 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................12 .....■ .............335.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................23 .....■ ...............33.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................47 .....■ .................4.3 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts.....................................................7 .....■ ...............13.0 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 126
2: Country/Economy Profiles
Hungary
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Hungary
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
India
Key indicators Financial assets by major type, 2007
Population (millions), 2008 ..................................................1,190.5 US$ bn
20.8%
GDP (US$ billions), 2008 ......................................................1,209.7 ■ Public debt securities .......696.7
GDP (current prices) per capita, 2008 ..............................1,016.2 2.4% ■ Private debt securities........79.5
GDP (PPP) as share (%) of world total, 2008 ........................4.77 54.2% ■ Banking deposits ...............761.5
Average rate of real GDP growth (%), 2004–08....................8.70 ■ Equity securities .............1,819.1
22.7% Total 3,356.9
Total/GDP: 304.5%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 129
2: Country/Economy Profiles
India
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................28 .....■ .................4.5 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................35 .....■ .................4.6 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................22 .....■ .................5.3 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................28 .....■ .................4.3 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................18 .....■ .................5.5 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................33 .....■ .................4.1 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................24 .....■ .................4.9 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................24 .....■ ...............10.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................14 .....■ .................4.6 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................23 .....■ .................5.0 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................45 .....■ .................3.4 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................54 .....■ ..........1,420.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................51 .....■ ...............46.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................21 .....■ .................6.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................49 .....■ ...............39.6 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 130
2: Country/Economy Profiles
India
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
India
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Indonesia
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .....................................................227.8 US$ bn
GDP (US$ billions), 2008 .........................................................511.8 27.3%
■ Public debt securities .......146.5
GDP (current prices) per capita, 2008 ..............................2,246.3 39.4% ■ Private debt securities........22.2
GDP (PPP) as share (%) of world total, 2008 ........................1.31 ■ Banking deposits ...............156.3
Average rate of real GDP growth (%), 2004–08....................5.71 4.1% ■ Equity securities ................211.7
Total 536.7
29.1%
Total/GDP: 124.2%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 133
2: Country/Economy Profiles
Indonesia
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................24 .....■ .................4.5 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................23 .....■ .................5.0 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................35 .....■ .................4.7 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................21 .....■ .................4.5 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................43 .....■ .................4.6 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................48 .....■ .................3.5 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................29 .....■ .................4.7 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................32 .....■ .................3.5 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................38 .....■ .................3.8 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................47 .....■ .................3.1 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................35 .....■ .............570.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................41 .....■ ...............39.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................25 .....■ .................5.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................55 .....■ .............122.7 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 134
2: Country/Economy Profiles
Indonesia
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Indonesia
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Ireland
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................4.4 6.7% US$ bn
15.3%
GDP (US$ billions), 2008 .........................................................273.3 ■ Public debt securities .........62.8
GDP (current prices) per capita, 2008 ............................61,809.6 ■ Private debt securities......466.6
GDP (PPP) as share (%) of world total, 2008 ........................0.27 ■ Banking deposits ...............267.3
Average rate of real GDP growth (%), 2004–08....................4.11 ■ Equity securities ................144.0
28.4%
49.6%
Total 940.8
Total/GDP: 360.1%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 137
2: Country/Economy Profiles
Ireland
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................19 .....■ .................4.6 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................24 .....■ .................4.9 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................11 .....■ .................5.8 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................18 .....■ .................4.6 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................22 .....■ .................5.3 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................14 .....■ .................5.6 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................21 .....■ .................5.0 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ......................................................5 .....■ ...............13.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................16 .....■ .................4.4 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence .............................................................8 .....■ .................6.3 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ..................................6 .....■ .................6.1 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................31 .....■ .............515.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .........................1 .....■ ...............20.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection ...............................................4 .....■ .................8.3 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................36 .....■ ...............26.9 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 138
2: Country/Economy Profiles
Ireland
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Ireland
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Israel
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................7.1 US$ bn
24.3%
GDP (US$ billions), 2008 .........................................................201.8 ■ Public debt securities .......130.3
GDP (current prices) per capita, 2008 ............................28,365.4 44.1% ■ Private debt securities........10.2
GDP (PPP) as share (%) of world total, 2008 ........................0.29 1.9% ■ Banking deposits ...............158.7
Average rate of real GDP growth (%), 2004–08....................4.93 ■ Equity securities ................236.4
Total 535.6
29.6%
Total/GDP: 326.4%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 141
2: Country/Economy Profiles
Israel
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................17 .....■ .................4.6 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................30 .....■ .................4.7 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................19 .....■ .................5.4 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................33 .....■ .................4.1 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................27 .....■ .................5.2 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................22 .....■ .................5.2 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................20 .....■ .................5.0 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................22 .....■ .................4.2 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................13 .....■ .................6.0 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................17 .....■ .................5.4 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................49 .....■ .............890.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................29 .....■ ...............35.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection ...............................................4 .....■ .................8.3 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................30 .....■ ...............25.3 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 142
2: Country/Economy Profiles
Israel
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Israel
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Italy
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................59.3 15.4%
US$ bn
GDP (US$ billions), 2008 ......................................................2,313.9 31.5%
■ Public debt securities ....2,188.5
GDP (current prices) per capita, 2008 ............................38,996.2 ■ Private debt securities...2,180.9
GDP (PPP) as share (%) of world total, 2008 ........................2.64 ■ Banking deposits ............1,509.2
21.7%
Average rate of real GDP growth (%), 2004–08....................0.95 ■ Equity securities .............1,072.7
Total 6,951.3
31.4%
Total/GDP: 328.3%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 145
2: Country/Economy Profiles
Italy
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................44 .....■ .................4.1 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................53 .....■ .................3.9 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................55 .....■ .................3.5 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................53 .....■ .................3.0 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................48 .....■ .................4.0 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................42 .....■ .................3.6 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................53 .....■ .................3.4 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................33 .....■ .................7.5 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................46 .....■ .................2.6 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................46 .....■ .................3.1 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................37 .....■ .................3.9 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................52 .....■ ..........1,210.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................45 .....■ ...............41.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................25 .....■ .................5.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................40 .....■ ...............29.9 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 146
2: Country/Economy Profiles
Italy
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Italy
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Japan
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .....................................................127.7 US$ bn
19.8%
GDP (US$ billions), 2008 ......................................................4,923.8 33.3% ■ Public debt securities ....7,471.5
GDP (current prices) per capita, 2008 ............................38,559.1 ■ Private debt securities...2,069.6
GDP (PPP) as share (%) of world total, 2008 ........................6.37 ■ Banking deposits ............8,463.4
Average rate of real GDP growth (%), 2004–08....................1.69 ■ Equity securities .............4,453.5
37.7%
Total 22,457.9
9.2%
Total/GDP: 512.2%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 149
2: Country/Economy Profiles
Japan
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................32 .....■ .................4.4 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................18 .....■ .................5.1 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................15 .....■ .................5.6 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................13 .....■ .................4.8 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................24 .....■ .................5.3 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................19 .....■ .................5.4 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................23 .....■ .................4.9 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................13 .....■ ...............12.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry .............................2 .....■ .................8.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................20 .....■ .................4.3 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................16 .....■ .................5.5 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................13 .....■ .................6.0 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................10 .....■ .............316.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................11 .....■ .................7.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................24 .....■ ...............22.7 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 150
2: Country/Economy Profiles
Japan
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Japan
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Jordan
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................5.9 16.1% US$ bn
GDP (US$ billions), 2008 ...........................................................20.0 ■ Public debt securities .........11.5
GDP (current prices) per capita, 2008 ..............................3,421.4 ■ Private debt securities.........n/a
GDP (PPP) as share (%) of world total, 2008 ........................0.05 ■ Banking deposits .................18.7
57.7%
Average rate of real GDP growth (%), 2004–08....................7.45 26.2%
■ Equity securities ..................41.2
Total 71.4
Total/GDP: 432.1%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 153
2: Country/Economy Profiles
Jordan
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................52 .....■ .................3.5 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................33 .....■ .................4.7 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................41 .....■ .................4.2 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................37 .....■ .................4.0 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................19 .....■ .................5.4 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................23 .....■ .................5.0 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests........................9 .....■ .................5.3 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................22 .....■ .................6.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................30 .....■ .................3.7 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................21 .....■ .................5.0 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................22 .....■ .................5.1 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................45 .....■ .............689.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................41 .....■ ...............39.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................47 .....■ .................4.3 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................42 .....■ ...............31.2 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 154
2: Country/Economy Profiles
Jordan
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Jordan
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Kazakhstan
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................15.6 7.3% US$ bn
GDP (US$ billions), 2008 .........................................................132.2 ■ Public debt securities ...........8.1
GDP (current prices) per capita, 2008 ..............................8,502.1 37.4% ■ Private debt securities........29.5
26.6%
GDP (PPP) as share (%) of world total, 2008 ........................0.26 ■ Banking deposits .................31.8
Average rate of real GDP growth (%), 2004–08....................8.42 ■ Equity securities ..................41.4
Total 110.8
Total/GDP: 105.6%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 157
2: Country/Economy Profiles
Kazakhstan
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................45 .....■ .................4.0 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................47 .....■ .................4.3 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................53 .....■ .................3.9 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................48 .....■ .................3.4 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................47 .....■ .................4.1 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................43 .....■ .................3.6 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................49 .....■ .................3.7 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................28 .....■ .................3.7 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................49 .....■ .................3.1 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................42 .....■ .................3.4 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ......................................................3 .....■ .............230.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................38 .....■ ...............38.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................25 .....■ .................5.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................22 .....■ ...............22.0 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 158
2: Country/Economy Profiles
Kazakhstan
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Kazakhstan
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Korea, Rep.
Key indicators Financial assets by major type, 2007
11.2%
Population (millions), 2008 .......................................................48.6 US$ bn
GDP (US$ billions), 2008 .........................................................947.0 ■ Public debt securities .......308.4
GDP (current prices) per capita, 2008 ............................19,504.5 40.8%
25.9% ■ Private debt securities......713.5
GDP (PPP) as share (%) of world total, 2008 ........................1.85 ■ Banking deposits ...............608.0
Average rate of real GDP growth (%), 2004–08....................4.22 ■ Equity securities .............1,123.6
Total 2,753.5
22.1%
Total/GDP: 262.4%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 161
2: Country/Economy Profiles
Korea, Rep.
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................38 .....■ .................4.3 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................31 .....■ .................4.7 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................29 .....■ .................4.9 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................43 .....■ .................3.7 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................34 .....■ .................4.9 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................28 .....■ .................4.6 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................41 .....■ .................4.3 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................11 .....■ ...............12.5 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................47 .....■ .................2.6 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................32 .....■ .................4.1 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................27 .....■ .................4.8 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ......................................................3 .....■ .............230.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................29 .....■ ...............35.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................34 .....■ .................5.3 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts.....................................................3 .....■ ...............10.3 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
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2: Country/Economy Profiles
Korea, Rep.
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Korea, Rep.
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Kuwait
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................3.4 3.9% 1.3% US$ bn
GDP (US$ billions), 2008 .........................................................158.1 ■ Public debt securities .........10.9
GDP (current prices) per capita, 2008 ............................45,920.3
26.9% ■ Private debt securities..........3.6
GDP (PPP) as share (%) of world total, 2008 ........................0.20 ■ Banking deposits .................74.4
Average rate of real GDP growth (%), 2004–08....................6.97 ■ Equity securities ................188.0
67.9%
Total 276.9
Total/GDP: 247.7%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 165
2: Country/Economy Profiles
Kuwait
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................27 .....■ .................4.5 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................50 .....■ .................4.3 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................52 .....■ .................3.9 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................22 .....■ .................4.5 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................38 .....■ .................4.8 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................32 .....■ .................4.2 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................44 .....■ .................4.2 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................37 .....■ .................3.2 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................27 .....■ .................4.6 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................35 .....■ .................4.1 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................34 .....■ .............566.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................54 .....■ ...............50.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................16 .....■ .................6.3 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts.....................................................8 .....■ ...............13.3 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
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2: Country/Economy Profiles
Kuwait
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Kuwait
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Malaysia
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................27.3 10.0% US$ bn
GDP (US$ billions), 2008 .........................................................222.2 ■ Public debt securities .........77.6
GDP (current prices) per capita, 2008 ..............................8,140.7 18.6% ■ Private debt securities......144.0
42.2%
GDP (PPP) as share (%) of world total, 2008 ........................0.56 ■ Banking deposits ...............225.1
Average rate of real GDP growth (%), 2004–08....................5.78 ■ Equity securities ................325.7
Total 772.4
29.1%
Total/GDP: 413.7%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 169
2: Country/Economy Profiles
Malaysia
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................13 .....■ .................4.7 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................19 .....■ .................5.1 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................21 .....■ .................5.3 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................17 .....■ .................4.6 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................28 .....■ .................5.2 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................27 .....■ .................4.7 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................14 .....■ .................5.1 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ......................................................5 .....■ ...............13.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................10 .....■ .................4.7 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................28 .....■ .................4.2 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................34 .....■ .................4.2 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................38 .....■ .............600.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection ...............................................3 .....■ .................8.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................37 .....■ ...............27.5 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
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2: Country/Economy Profiles
Malaysia
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Malaysia
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Mexico
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .....................................................106.3 19.5% US$ bn
GDP (US$ billions), 2008 ......................................................1,088.1 ■ Public debt securities .......204.2
37.9%
GDP (current prices) per capita, 2008 ............................10,234.8 ■ Private debt securities......214.7
GDP (PPP) as share (%) of world total, 2008 ........................2.24 ■ Banking deposits ...............232.4
Average rate of real GDP growth (%), 2004–08....................3.40 20.5% ■ Equity securities ................397.7
Total 1,049.0
22.2%
Total/GDP: 102.3%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 173
2: Country/Economy Profiles
Mexico
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................46 .....■ .................4.0 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................49 .....■ .................4.3 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................47 .....■ .................4.1 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................45 .....■ .................3.6 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................40 .....■ .................4.7 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................45 .....■ .................3.6 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................40 .....■ .................4.3 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................18 .....■ ...............11.5 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry .............................2 .....■ .................8.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................45 .....■ .................2.6 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................45 .....■ .................3.2 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................40 .....■ .................3.6 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................20 .....■ .............415.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................38 .....■ ...............38.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................21 .....■ .................6.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................44 .....■ ...............32.0 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 174
2: Country/Economy Profiles
Mexico
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Mexico
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Netherlands
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................16.7 8.6% US$ bn
GDP (US$ billions), 2008 .........................................................868.9 23.6%
■ Public debt securities .......348.4
GDP (current prices) per capita, 2008 ............................52,019.0 ■ Private debt securities...1,694.7
GDP (PPP) as share (%) of world total, 2008 ........................0.98 ■ Banking deposits ............1,048.3
Average rate of real GDP growth (%), 2004–08....................2.63 ■ Equity securities ................956.5
41.9%
Total 4,047.9
25.9%
Total/GDP: 520.8%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 177
2: Country/Economy Profiles
Netherlands
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................23 .....■ .................4.6 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards ...................................................9 .....■ .................5.4 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management ...................................5 .....■ .................6.1 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate...........................................................3 .....■ .................5.8 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................10 .....■ .................5.9 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms..........................................................6 .....■ .................6.4 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................13 .....■ .................5.2 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry .............................2 .....■ .................8.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................13 .....■ .................4.7 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence .............................................................7 .....■ .................6.4 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ..................................7 .....■ .................6.1 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................30 .....■ .............514.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .........................4 .....■ ...............25.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................43 .....■ .................4.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................29 .....■ ...............24.4 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 178
2: Country/Economy Profiles
Netherlands
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Netherlands
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Nigeria
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .....................................................147.8 13.6% US$ bn
GDP (US$ billions), 2008 .........................................................214.4 0.3%
■ Public debt securities .........20.5
GDP (current prices) per capita, 2008 ..............................1,450.5 ■ Private debt securities..........0.5
GDP (PPP) as share (%) of world total, 2008 ........................0.46 ■ Banking deposits .................44.1
Average rate of real GDP growth (%), 2004–08....................6.78
57.0% ■ Equity securities ..................86.3
29.1%
Total 151.5
Total/GDP: 90.5%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 181
2: Country/Economy Profiles
Nigeria
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................51 .....■ .................3.6 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................42 .....■ .................4.5 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................37 .....■ .................4.5 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................36 .....■ .................4.0 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................49 .....■ .................3.9 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................49 .....■ .................3.5 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................38 .....■ .................4.4 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................34 .....■ .................3.4 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................33 .....■ .................4.1 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................49 .....■ .................2.8 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................23 .....■ .............457.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................41 .....■ ...............39.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................25 .....■ .................5.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................44 .....■ ...............32.0 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 182
2: Country/Economy Profiles
Nigeria
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Nigeria
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Norway
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................4.8 US$ bn
22.6%
GDP (US$ billions), 2008 .........................................................456.2 35.9% ■ Public debt securities .......225.0
GDP (current prices) per capita, 2008 ............................95,061.8 ■ Private debt securities......242.8
GDP (PPP) as share (%) of world total, 2008 ........................0.38 ■ Banking deposits ...............170.6
Average rate of real GDP growth (%), 2004–08....................2.81 ■ Equity securities ................357.4
24.4%
Total 995.9
17.1%
Total/GDP: 255.7%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 185
2: Country/Economy Profiles
Norway
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................39 .....■ .................4.3 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards ...................................................6 .....■ .................5.6 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management ...................................2 .....■ .................6.2 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate...........................................................4 .....■ .................5.7 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards..........................4 .....■ .................6.1 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms..........................................................7 .....■ .................6.3 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests........................3 .....■ .................5.8 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .......................................5 .....■ .................5.4 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................10 .....■ .................6.2 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ..................................5 .....■ .................6.2 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ......................................................9 .....■ .............310.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................23 .....■ ...............33.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................13 .....■ .................6.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts.....................................................2 .....■ .................9.9 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 186
2: Country/Economy Profiles
Norway
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Norway
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Pakistan
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .....................................................160.5 US$ bn
GDP (US$ billions), 2008 .........................................................167.6 35.3% 37.0% ■ Public debt securities .........73.7
GDP (current prices) per capita, 2008 ..............................1,044.5 ■ Private debt securities..........0.6
GDP (PPP) as share (%) of world total, 2008 ........................0.64 ■ Banking deposits .................54.6
Average rate of real GDP growth (%), 2004–08....................6.64 ■ Equity securities ..................70.3
0.3% Total 199.2
27.4%
Total/GDP: 138.3%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 189
2: Country/Economy Profiles
Pakistan
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................50 .....■ .................3.6 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................51 .....■ .................3.9 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................49 .....■ .................4.0 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................47 .....■ .................3.5 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................44 .....■ .................4.4 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................47 .....■ .................3.6 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................47 .....■ .................4.1 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................43 .....■ .................2.9 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................48 .....■ .................3.1 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................48 .....■ .................3.0 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................50 .....■ .............976.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................52 .....■ ...............47.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................16 .....■ .................6.3 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................27 .....■ ...............23.8 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 190
2: Country/Economy Profiles
Pakistan
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Pakistan
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Panama
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................3.4 18.2% US$ bn
GDP (US$ billions), 2008 ...........................................................23.1 30.6%
■ Public debt securities .........10.5
GDP (current prices) per capita, 2008 ..............................6,784.1 ■ Private debt securities..........1.3
GDP (PPP) as share (%) of world total, 2008 ........................0.06 ■ Banking deposits .................16.3
Average rate of real GDP growth (%), 2004–08....................8.79 3.7%
■ Equity securities ....................6.2
Total 34.2
47.6%
Total/GDP: 175.7%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 193
2: Country/Economy Profiles
Panama
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................21 .....■ .................4.6 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................27 .....■ .................4.8 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................38 .....■ .................4.4 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................27 .....■ .................4.3 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................29 .....■ .................5.1 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................34 .....■ .................4.0 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................34 .....■ .................4.5 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................13 .....■ ...............12.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................50 .....■ .................2.5 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................50 .....■ .................3.0 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................36 .....■ .................4.0 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................44 .....■ .............686.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................19 .....■ ...............31.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................43 .....■ .................4.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................52 .....■ ...............50.0 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 194
2: Country/Economy Profiles
Panama
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Panama
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Peru
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................28.7 18.4% US$ bn
GDP (US$ billions), 2008 .........................................................127.6 ■ Public debt securities .........31.9
GDP (current prices) per capita, 2008 ..............................4,452.5 4.2% ■ Private debt securities..........7.2
61.1%
GDP (PPP) as share (%) of world total, 2008 ........................0.35 ■ Banking deposits .................28.5
Average rate of real GDP growth (%), 2004–08....................7.65 ■ Equity securities ................106.0
16.4%
Total 173.5
Total/GDP: 161.5%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 197
2: Country/Economy Profiles
Peru
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................47 .....■ .................3.8 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................26 .....■ .................4.8 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................34 .....■ .................4.7 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................38 .....■ .................3.9 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................39 .....■ .................4.8 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................41 .....■ .................3.7 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................30 .....■ .................4.6 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................13 .....■ ...............12.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................30 .....■ .................5.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................53 .....■ .................2.2 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................51 .....■ .................2.9 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................31 .....■ .................4.4 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................24 .....■ .............468.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................45 .....■ ...............41.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................13 .....■ .................6.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................48 .....■ ...............35.7 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 198
2: Country/Economy Profiles
Peru
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Peru
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Philippines
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................90.3 US$ bn
29.8%
GDP (US$ billions), 2008 .........................................................168.6 ■ Public debt securities .........80.4
38.2%
GDP (current prices) per capita, 2008 ..............................1,866.0 ■ Private debt securities........11.2
GDP (PPP) as share (%) of world total, 2008 ........................0.46 ■ Banking deposits .................75.3
Average rate of real GDP growth (%), 2004–08....................5.71 4.1% ■ Equity securities ................103.2
Total 270.1
27.9%
Total/GDP: 187.5%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 201
2: Country/Economy Profiles
Philippines
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................43 .....■ .................4.1 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................34 .....■ .................4.7 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................32 .....■ .................4.8 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................29 .....■ .................4.2 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................36 .....■ .................4.9 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................51 .....■ .................3.3 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................43 .....■ .................4.3 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................49 .....■ .................2.5 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................47 .....■ .................3.1 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................53 .....■ .................2.4 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................48 .....■ .............842.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................36 .....■ ...............37.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................50 .....■ .................4.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................33 .....■ ...............26.0 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 202
2: Country/Economy Profiles
Philippines
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Philippines
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Poland
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................38.1 US$ bn
30.7%
GDP (US$ billions), 2008 .........................................................525.7 ■ Public debt securities .......181.7
35.1%
GDP (current prices) per capita, 2008 ............................13,798.9 ■ Private debt securities..........3.5
GDP (PPP) as share (%) of world total, 2008 ........................0.97 ■ Banking deposits ...............198.6
Average rate of real GDP growth (%), 2004–08....................5.33 0.6% ■ Equity securities ................207.3
Total 591.1
33.6%
Total/GDP: 139.2%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 205
2: Country/Economy Profiles
Poland
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................25 .....■ .................4.5 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................44 .....■ .................4.5 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................30 .....■ .................4.9 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................40 .....■ .................3.9 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................35 .....■ .................4.9 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................29 .....■ .................4.5 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................33 .....■ .................4.5 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................27 .....■ .................9.5 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................44 .....■ .................2.8 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................30 .....■ .................4.1 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................26 .....■ .................4.8 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................47 .....■ .............830.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................38 .....■ ...............38.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................21 .....■ .................6.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts.....................................................6 .....■ ...............12.0 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 206
2: Country/Economy Profiles
Poland
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Poland
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Russian Federation
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .....................................................142.0 3.3% 4.9% US$ bn
GDP (US$ billions), 2008 ......................................................1,676.6 ■ Public debt securities .........69.9
GDP (current prices) per capita, 2008 ............................11,806.9 20.3% ■ Private debt securities......102.2
GDP (PPP) as share (%) of world total, 2008 ........................3.30 ■ Banking deposits ...............427.3
Average rate of real GDP growth (%), 2004–08....................7.00 ■ Equity securities .............1,503.0
Total 2,102.4
71.5%
Total/GDP: 162.4%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 209
2: Country/Economy Profiles
Russian Federation
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................37 .....■ .................4.3 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................40 .....■ .................4.5 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................40 .....■ .................4.3 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................51 .....■ .................3.3 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................54 .....■ .................3.7 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................50 .....■ .................3.4 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................54 .....■ .................3.2 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................32 .....■ .................8.5 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................22 .....■ .................6.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................38 .....■ .................3.2 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................52 .....■ .................2.7 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................52 .....■ .................2.7 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ......................................................6 .....■ .............281.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................36 .....■ ...............37.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................38 .....■ .................5.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts.....................................................9 .....■ ...............13.4 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 210
2: Country/Economy Profiles
Russian Federation
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Russian Federation
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Saudi Arabia
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................24.9 11.7% US$ bn
GDP (US$ billions), 2008 .........................................................481.6 0.9%
■ Public debt securities .........95.2
GDP (current prices) per capita, 2008 ............................19,345.3 ■ Private debt securities..........7.1
GDP (PPP) as share (%) of world total, 2008 ........................0.87 23.8%
■ Banking deposits ...............192.7
Average rate of real GDP growth (%), 2004–08....................4.40 ■ Equity securities ................515.1
Total/GDP: 212.1%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 213
2: Country/Economy Profiles
Saudi Arabia
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................40 .....■ .................4.2 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................37 .....■ .................4.6 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................39 .....■ .................4.4 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................26 .....■ .................4.3 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................32 .....■ .................5.0 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................24 .....■ .................4.9 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................28 .....■ .................4.7 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ......................................................5 .....■ ...............13.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................24 .....■ .................4.1 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................20 .....■ .................5.0 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................25 .....■ .................5.0 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................42 .....■ .............635.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................49 .....■ ...............44.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................16 .....■ .................6.3 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................37 .....■ ...............27.5 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 214
2: Country/Economy Profiles
Saudi Arabia
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Saudi Arabia
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Singapore
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................4.7 US$ bn
20.4%
GDP (US$ billions), 2008 .........................................................181.9 ■ Public debt securities .......160.7
GDP (current prices) per capita, 2008 ............................38,972.1
44.8% ■ Private debt securities........80.0
GDP (PPP) as share (%) of world total, 2008 ........................0.35 10.1% ■ Banking deposits ...............194.9
Average rate of real GDP growth (%), 2004–08....................6.77 ■ Equity securities ................353.5
Total 789.1
24.7%
Total/GDP: 472.7%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 217
2: Country/Economy Profiles
Singapore
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ................................2 .....■ .................5.3 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards ...................................................7 .....■ .................5.6 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management ...................................7 .....■ .................6.0 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................16 .....■ .................4.8 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards..........................5 .....■ .................6.1 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms..........................................................4 .....■ .................6.5 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests........................5 .....■ .................5.7 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ......................................................4 .....■ ...............13.5 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry .............................2 .....■ .................8.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .......................................1 .....■ .................6.5 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................15 .....■ .................5.8 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ..................................1 .....■ .................6.6 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ......................................................1 .....■ .............150.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .........................2 .....■ ...............21.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection ...............................................1 .....■ .................9.3 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................32 .....■ ...............25.8 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:22 PM Page 218
2: Country/Economy Profiles
Singapore
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Singapore
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Slovak Republic
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................5.4 8.8% US$ bn
GDP (US$ billions), 2008 ...........................................................95.4 ■ Public debt securities .........26.7
33.7%
GDP (current prices) per capita, 2008 ............................17,630.1 ■ Private debt securities..........4.5
GDP (PPP) as share (%) of world total, 2008 ........................0.17 ■ Banking deposits .................41.0
Average rate of real GDP growth (%), 2004–08....................7.40 ■ Equity securities ....................7.0
Total/GDP: 105.3%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:22 PM Page 221
2: Country/Economy Profiles
Slovak Republic
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................11 .....■ .................4.9 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................16 .....■ .................5.1 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................24 .....■ .................5.2 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................19 .....■ .................4.6 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................37 .....■ .................4.8 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................39 .....■ .................3.8 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................37 .....■ .................4.4 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................40 .....■ .................3.2 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................43 .....■ .................3.5 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................30 .....■ .................4.4 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................33 .....■ .............565.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................43 .....■ .................4.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................31 .....■ ...............25.7 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 222
2: Country/Economy Profiles
Slovak Republic
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Slovak Republic
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
South Africa
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................48.7 7.5% US$ bn
GDP (US$ billions), 2008 .........................................................277.2 6.2%
■ Public debt securities .........89.6
GDP (current prices) per capita, 2008 ..............................5,693.3 ■ Private debt securities........74.0
GDP (PPP) as share (%) of world total, 2008 ........................0.72 16.2% ■ Banking deposits ...............192.2
Average rate of real GDP growth (%), 2004–08....................4.66 ■ Equity securities ................833.5
70.1% Total 1,189.4
Total/GDP: 419.7%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 225
2: Country/Economy Profiles
South Africa
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................10 .....■ .................5.0 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards ...................................................2 .....■ .................5.8 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................17 .....■ .................5.5 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................20 .....■ .................4.5 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards..........................1 .....■ .................6.2 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................26 .....■ .................4.7 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests........................7 .....■ .................5.5 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................22 .....■ ...............10.5 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry .............................1 .....■ .................9.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................18 .....■ .................4.3 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................24 .....■ .................5.0 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................29 .....■ .................4.4 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................38 .....■ .............600.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection ...............................................8 .....■ .................8.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................47 .....■ ...............33.2 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 226
2: Country/Economy Profiles
South Africa
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
South Africa
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Spain
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................45.6 7.5%
US$ bn
26.0%
GDP (US$ billions), 2008 ......................................................1,611.8 ■ Public debt securities .......520.1
GDP (current prices) per capita, 2008 ............................35,331.5 ■ Private debt securities...2,597.4
GDP (PPP) as share (%) of world total, 2008 ........................2.03 37.5% ■ Banking deposits ............2,017.8
Average rate of real GDP growth (%), 2004–08....................3.12 ■ Equity securities .............1,800.1
Total 6,935.3
29.1%
Total/GDP: 481.6%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 229
2: Country/Economy Profiles
Spain
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................35 .....■ .................4.4 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................28 .....■ .................4.7 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................28 .....■ .................5.0 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................34 .....■ .................4.1 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................33 .....■ .................5.0 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................25 .....■ .................4.9 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................36 .....■ .................4.4 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................18 .....■ ...............11.5 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry .............................2 .....■ .................8.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................27 .....■ .................3.9 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................34 .....■ .................4.1 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................24 .....■ .................5.1 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................31 .....■ .............515.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................41 .....■ ...............39.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................38 .....■ .................5.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................17 .....■ ...............17.2 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 230
2: Country/Economy Profiles
Spain
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Spain
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Sweden
Key indicators Financial assets by major type, 2007
12.2%
Population (millions), 2008 .........................................................9.2 US$ bn
GDP (US$ billions), 2008 .........................................................484.6 ■ Public debt securities .......189.4
39.5%
GDP (current prices) per capita, 2008 ............................52,789.6 ■ Private debt securities......494.6
GDP (PPP) as share (%) of world total, 2008 ........................0.50 31.9% ■ Banking deposits ...............254.4
Average rate of real GDP growth (%), 2004–08....................2.80 ■ Equity securities ................612.5
Total 1,550.9
16.4%
Total/GDP: 341.7%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 233
2: Country/Economy Profiles
Sweden
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................15 .....■ .................4.7 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards ...................................................1 .....■ .................5.9 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management ...................................1 .....■ .................6.5 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate...........................................................1 .....■ .................6.2 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards..........................3 .....■ .................6.1 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms..........................................................1 .....■ .................6.7 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests........................1 .....■ .................6.0 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................22 .....■ .................6.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .......................................3 .....■ .................5.6 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence .............................................................1 .....■ .................6.6 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ..................................2 .....■ .................6.5 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................28 .....■ .............508.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................25 .....■ .................5.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................43 .....■ ...............31.3 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 234
2: Country/Economy Profiles
Sweden
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Sweden
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Switzerland
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .........................................................7.3 7.2% US$ bn
GDP (US$ billions), 2008 .........................................................492.6 ■ Public debt securities .......187.3
GDP (current prices) per capita, 2008 ............................67,384.5 20.1% ■ Private debt securities......526.6
GDP (PPP) as share (%) of world total, 2008 ........................0.45 48.8% ■ Banking deposits ...............625.6
Average rate of real GDP growth (%), 2004–08....................2.68 ■ Equity securities .............1,274.5
Total 2,614.1
23.9%
Total/GDP: 612.1%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 237
2: Country/Economy Profiles
Switzerland
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ................................7 .....■ .................5.0 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................11 .....■ .................5.3 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management ...................................9 .....■ .................5.9 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate...........................................................7 .....■ .................5.3 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................13 .....■ .................5.7 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms..........................................................5 .....■ .................6.4 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................25 .....■ .................4.9 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ......................................................1 .....■ ...............14.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................22 .....■ .................6.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .......................................9 .....■ .................4.9 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence .............................................................6 .....■ .................6.4 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................10 .....■ .................6.0 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................21 .....■ .............417.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................20 .....■ ...............32.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................53 .....■ .................3.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................28 .....■ ...............24.0 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 238
2: Country/Economy Profiles
Switzerland
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Switzerland
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Thailand
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................66.4 16.1% US$ bn
GDP (US$ billions), 2008 .........................................................273.2 ■ Public debt securities .........92.7
34.1%
GDP (current prices) per capita, 2008 ..............................4,115.3 9.1% ■ Private debt securities........52.4
GDP (PPP) as share (%) of world total, 2008 ........................0.80 ■ Banking deposits ...............233.2
Average rate of real GDP growth (%), 2004–08....................4.74 ■ Equity securities ................196.0
Total 574.3
40.6%
Total/GDP: 233.4%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 241
2: Country/Economy Profiles
Thailand
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................42 .....■ .................4.1 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................39 .....■ .................4.5 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................36 .....■ .................4.6 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................44 .....■ .................3.6 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................31 .....■ .................5.0 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................36 .....■ .................4.0 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................27 .....■ .................4.8 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................13 .....■ ...............12.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry .............................2 .....■ .................8.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................36 .....■ .................3.4 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................29 .....■ .................4.2 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................41 .....■ .................3.5 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................25 .....■ .............479.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................29 .....■ ...............35.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................10 .....■ .................7.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................10 .....■ ...............14.3 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 242
2: Country/Economy Profiles
Thailand
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Thailand
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Turkey
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................69.7 US$ bn
GDP (US$ billions), 2008 .........................................................729.4 29.9% ■ Public debt securities .......252.8
33.9%
GDP (current prices) per capita, 2008 ............................10,471.7 ■ Private debt securities........12.2
GDP (PPP) as share (%) of world total, 2008 ........................1.35 ■ Banking deposits ...............294.8
Average rate of real GDP growth (%), 2004–08....................6.08 1.4% ■ Equity securities ................286.6
Total 846.4
34 8%
Total/GDP: 130.4%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 245
2: Country/Economy Profiles
Turkey
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................53 .....■ .................3.4 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................54 .....■ .................3.8 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................42 .....■ .................4.2 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................49 .....■ .................3.3 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................45 .....■ .................4.2 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................40 .....■ .................3.8 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................48 .....■ .................3.9 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................26 .....■ .................3.9 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................40 .....■ .................3.7 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................43 .....■ .................3.4 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................22 .....■ .............420.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................29 .....■ ...............35.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................25 .....■ .................5.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................20 .....■ ...............18.8 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 246
2: Country/Economy Profiles
Turkey
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Turkey
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Ukraine
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................45.8 8.7% US$ bn
2.7%
GDP (US$ billions), 2008 .........................................................179.7 ■ Public debt securities .........16.5
GDP (current prices) per capita, 2008 ..............................3,920.1 ■ Private debt securities..........5.2
GDP (PPP) as share (%) of world total, 2008 ........................0.50 ■ Banking deposits .................56.1
Average rate of real GDP growth (%), 2004–08....................6.42 59.0%
29.6% ■ Equity securities ................111.8
Total 189.6
Total/GDP: 132.4%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 249
2: Country/Economy Profiles
Ukraine
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................41 .....■ .................4.1 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................46 .....■ .................4.4 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................50 .....■ .................4.0 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................52 .....■ .................3.2 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................53 .....■ .................3.7 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................53 .....■ .................3.2 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................55 .....■ .................3.0 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................51 .....■ .................2.3 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................54 .....■ .................2.3 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................46 .....■ .................3.2 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................13 .....■ .............354.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................52 .....■ .................3.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................50 .....■ ...............41.5 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 250
2: Country/Economy Profiles
Ukraine
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Ukraine
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Total/GDP: 261.2%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 253
2: Country/Economy Profiles
United Arab Emirates
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................14 .....■ .................4.7 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................20 .....■ .................5.1 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................25 .....■ .................5.1 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................15 .....■ .................4.8 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................20 .....■ .................5.4 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................15 .....■ .................5.5 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................12 .....■ .................5.2 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................11 .....■ .................4.7 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................19 .....■ .................5.1 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................14 .....■ .................5.9 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................40 .....■ .............607.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................54 .....■ ...............50.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................47 .....■ .................4.3 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................34 .....■ ...............26.2 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 254
2: Country/Economy Profiles
2: Country/Economy Profiles
United Arab Emirates
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
United Kingdom
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................61.1 9.9% US$ bn
GDP (US$ billions), 2008 ......................................................2,674.1 ■ Public debt securities ....1,203.0
31.6%
GDP (current prices) per capita, 2008 ............................43,785.3 ■ Private debt securities...2,914.6
GDP (PPP) as share (%) of world total, 2008 ........................3.23 23.9% ■ Banking deposits ............4,228.9
Average rate of real GDP growth (%), 2004–08....................2.28 ■ Equity securities .............3,858.5
Total 12,205.0
Total/GDP: 435.4%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 257
2: Country/Economy Profiles
United Kingdom
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ................................9 .....■ .................5.0 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................17 .....■ .................5.1 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................12 .....■ .................5.7 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................14 .....■ .................4.8 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................15 .....■ .................5.6 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................12 .....■ .................5.9 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................15 .....■ .................5.1 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ....................................................28 .....■ .................9.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .......................................8 .....■ .................5.0 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................14 .....■ .................6.0 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................18 .....■ .................5.4 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................18 .....■ .............404.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection ...............................................8 .....■ .................8.0 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................26 .....■ ...............23.4 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 258
2: Country/Economy Profiles
United Kingdom
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
United Kingdom
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
United States
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .....................................................304.4 8.8% US$ bn
GDP (US$ billions), 2008 ....................................................14,264.6 ■ Public debt securities ....5,110.5
GDP (current prices) per capita, 2008 ............................46,859.1 34.3% ■ Private debt securities.22,302.0
GDP (PPP) as share (%) of world total, 2008 ......................20.69 ■ Banking deposits ..........10,759.4
38.4%
Average rate of real GDP growth (%), 2004–08....................2.50 ■ Equity securities ...........19,947.3
Total 58,119.1
Total/GDP: 420.9%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 261
2: Country/Economy Profiles
United States
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ................................1 .....■ .................5.4 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................14 .....■ .................5.2 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................10 .....■ .................5.9 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate...........................................................5 .....■ .................5.4 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................25 .....■ .................5.3 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................18 .....■ .................5.5 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................17 .....■ .................5.0 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ......................................................5 .....■ ...............13.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ...........................10 .....■ .................7.0 South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................21 .....■ .................4.2 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................18 .....■ .................5.3 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................21 .....■ .................5.2 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ......................................................8 .....■ .............300.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................20 .....■ ...............32.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection ...............................................4 .....■ .................8.3 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts.....................................................1 .....■ .................9.4 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 262
2: Country/Economy Profiles
United States
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
United States
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Venezuela
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................28.1 US$ bn
GDP (US$ billions), 2008 .........................................................319.4 36.8% ■ Public debt securities .........44.0
GDP (current prices) per capita, 2008 ............................11,388.3 ■ Private debt securities........11.9
GDP (PPP) as share (%) of world total, 2008 ........................0.52 53.3% ■ Banking deposits .................63.7
Average rate of real GDP growth (%), 2004–08..................10.43 ■ Equity securities....................n/a
Total 119.6
9.9%
Total/GDP: 52.5%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 265
2: Country/Economy Profiles
Venezuela
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................54 .....■ .................3.4 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................55 .....■ .................3.7 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................48 .....■ .................4.1 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................50 .....■ .................3.3 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................52 .....■ .................3.8 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................55 .....■ .................2.9 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................52 .....■ .................3.5 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power ......................................................5 .....■ ...............13.0 Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................55 .....■ .................1.5 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................55 .....■ .................1.4 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................55 .....■ .................2.1 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ....................................................29 .....■ .............510.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .........................9 .....■ ...............29.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................54 .....■ .................2.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................51 .....■ ...............43.7 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 266
2: Country/Economy Profiles
Venezuela
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Venezuela
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Vietnam
Key indicators Financial assets by major type, 2007
Population (millions), 2008 .......................................................86.3 16.2% US$ bn
GDP (US$ billions), 2008 ...........................................................89.8 28.4%
■ Public debt securities .........34.2
GDP (current prices) per capita, 2008 ..............................1,040.4 ■ Private debt securities..........0.2
GDP (PPP) as share (%) of world total, 2008 ........................0.35 ■ Banking deposits .................66.6
0.2%
Average rate of real GDP growth (%), 2004–08....................7.82 ■ Equity securities ..................19.5
Total 120.5
55.2%
Total/GDP: 169.5%
Financial intermediation
Financial access
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Part 1.r3 10/14/09 2:23 PM Page 269
2: Country/Economy Profiles
Vietnam
Financial Development Index in detail ■ Development Advantage ■ Development Disadvantage
Corporate governance
1.04 Extent of incentive-based compensation ..............................36 .....■ .................4.3 United States ........................5.4
. . . . . . . . . . . .5.4
1.05 Efficacy of corporate boards .................................................41 .....■ .................4.5 Sweden .................................5.9
. . . . . . . . . . . . . . . .5.9
1.06 Reliance on professional management .................................44 .....■ .................4.2 Sweden .................................6.5
. . . . . . . . . . . . . . . .6.5
1.07 Willingness to delegate.........................................................46 .....■ .................3.6 Sweden .................................6.2
. . . . . . . . . . . . . . . .6.2
1.08 Strength of auditing and reporting standards........................51 .....■ .................3.8 South Africa...........................6.2
Africa . . . . . . . . . . . . .6.2
1.09 Ethical behavior of firms........................................................35 .....■ .................4.0 Sweden .................................6.7
. . . . . . . . . . . . . . . .6.7
1.10 Protection of minority shareholders’ interests......................35 .....■ .................4.4 Sweden .................................6.0
. . . . . . . . . . . . . . . .6.0
1.11 Official supervisory power....................................................n/a .........................n/a Multiple (3) ..........................14.0
. . . . . . . . . . . . .14.0
1.12 Private monitoring of the banking industry ..........................n/a .........................n/a South Africa...........................9.0
Africa . . . . . . . . . . . . .9.0
Contract enforcement
1.22 Effectiveness of law-making bodies .....................................23 .....■ .................4.1 Singapore ..............................6.5
. . . . . . . . . . . . . . .6.5
1.23 Judicial independence ...........................................................39 .....■ .................3.8 Sweden .................................6.6
. . . . . . . . . . . . . . . .6.6
1.24 Irregular payments in judicial decisions ................................51 .....■ .................2.8 Singapore ..............................6.6
. . . . . . . . . . . . . . .6.6
1.25 Time to enforce a contract ......................................................7 .....■ .............295.0 Singapore ..........................150.0
. . . . . . . . . . . . .150.0
1.26 Number of procedures to enforce a contract .......................25 .....■ ...............34.0 Ireland . . . . . . . . . . . . . . . . .20.0
Ireland..................................20.0
1.27 Strength of investor protection .............................................54 .....■ .................2.7 Singapore ..............................9.3
. . . . . . . . . . . . . . .9.3
1.28 Cost of enforcing contracts...................................................41 .....■ ...............31.0 United States ........................9.4
. . . . . . . . . . . .9.4
(Cont’d.)
Part 1.r3 10/14/09 2:23 PM Page 270
2: Country/Economy Profiles
Vietnam
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
2: Country/Economy Profiles
Vietnam
Financial Development Index in detail (cont’d.) ■ Development Advantage ■ Development Disadvantage
Part 3
Data Tables
Part 2.r2 10/14/09 3:32 PM Page 274
Part 2.r2 10/14/09 3:32 PM Page 275
The following pages provide detailed data for all 55 Two types of data are presented in the tables:
economies included in The Financial Development Report
• Survey data: These data are the results drawn
2009. The data tables are organized into seven sections:
from the World Economic Forum’s Executive
Opinion Survey.
I. Institutional environment
II. Business environment • Hard data: These data are indicators obtained
III. Financial stability from a variety of sources.
IV. Banking financial services
V. Non-banking financial services
VI. Financial markets Survey data
VII. Financial access Data yielded from the World Economic Forum’s
Executive Opinion Survey are presented in blue-colored
The seven sections correspond to the seven pillars of the bar graphs. Survey questions asked for responses on a
Financial Development Index. scale of 1 to 7, where an answer of 1 corresponds to the
lowest possible score and an answer of 7 corresponds to
the highest possible score. For each Survey question,
individual responses are aggregated at the economy level 275
in order to produce country scores. For more informa-
1.05 1.06 tion on the Executive Opinion Survey and a detailed
Efficacy of corporate boards Reliance on professional management explanation of how country scores are computed, please
Corporate governance by investors and boards of directors in your Senior management positions in your country are (1 = usually held by
country is characterized by (1 = management has little accountability;
7 = investors and boards exert strong supervision of management
relatives; 7 = held by professional managers chosen for their superior
qualification) refer to Chapter 1.1.
decisions)
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.83 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.97 7
1 Sweden...........................5.87 1 Sweden...........................6.46
2
3
South Africa ....................5.78
Canada ............................5.68
2
3
Norway............................6.21
Finland.............................6.18
question and the two extreme answers are shown. Scores
4 Australia ..........................5.65 4 Denmark .........................6.08
5
6
Finland.............................5.64
Norway............................5.61
5
6
Netherlands.....................6.05
Australia ..........................6.01
are reported with a precision of two decimal points,
7 Singapore ........................5.59 7 Singapore ........................5.99
8
9
Denmark .........................5.53
Netherlands.....................5.44
8
9
Canada ............................5.96
Switzerland .....................5.86 although exact figures are used to determine rankings.
10 Chile ................................5.41 10 United States ..................5.85
11
12
13
Switzerland .....................5.30
Germany .........................5.26
Belgium...........................5.18
11
12
13
Ireland .............................5.77
United Kingdom ..............5.73
Germany .........................5.68
For example, in the case of the variable 1.13 on the
14 United States ..................5.18 14 Austria.............................5.61
15
16
Czech Republic ...............5.17
Slovak Republic...............5.13
15
16
Japan...............................5.56
Belgium...........................5.54
burden of government regulation, Kazakhstan’s score is
17 United Kingdom ..............5.12 17 South Africa ....................5.54
18
19
Japan...............................5.11
Malaysia ..........................5.10
18
19
Chile ................................5.42
Israel ...............................5.39
2.99784 and the United Kingdom’s score is 2.99663.
20 United Arab Emirates......5.08 20 Czech Republic ...............5.32
21
22
Austria.............................5.06
France .............................5.06
21
22
Malaysia ..........................5.26
India ................................5.26 These countries rank 30 and 31 respectively, although
23 Indonesia.........................4.98 23 France .............................5.24
24
25
26
Ireland .............................4.94
Bahrain ............................4.92
Peru.................................4.80
24
25
26
Slovak Republic...............5.19
United Arab Emirates......5.09
Brazil ...............................5.08
they are listed with the same rounded score of 3.00.
27 Panama ...........................4.80 27 Hong Kong SAR ..............5.03
28 Spain ...............................4.72 28 Spain ...............................4.96
29 Hong Kong SAR ..............4.71 29 Korea, Rep. .....................4.91
30 Israel ...............................4.69 30 Poland .............................4.87
31 Korea, Rep. .....................4.67 31 China ...............................4.86
32
33
Brazil ...............................4.67
Jordan .............................4.66
32
33
Philippines.......................4.85
Argentina.........................4.74 A dotted line on the graph indicates the mean
34 Philippines.......................4.65 34 Peru.................................4.70
35
36
37
India ................................4.63
Egypt...............................4.62
Saudi Arabia ....................4.59
35
36
37
Indonesia.........................4.70
Thailand...........................4.57
Nigeria.............................4.47
score across the 55 economies. Standard deviations,
38 Colombia .........................4.53 38 Panama ...........................4.45
39
40
Thailand...........................4.51
Russian Federation .........4.51
39
40
Saudi Arabia ....................4.41
Russian Federation .........4.27
which give an indication of how closely or widely the
41 Vietnam ...........................4.48 41 Jordan .............................4.23
42
43
Nigeria.............................4.48
Hungary...........................4.46
42
43
Turkey..............................4.20
Colombia .........................4.18
individual responses are spread around the mean country
44 Poland .............................4.45 44 Vietnam ...........................4.16
45
46
China ...............................4.41
Ukraine............................4.40
45
46
Bahrain ............................4.15
Hungary...........................4.10 score, can be provided upon request to the Global
47 Kazakhstan ......................4.33 47 Mexico ............................4.07
48
49
50
Argentina.........................4.28
Mexico ............................4.26
Kuwait .............................4.26
48
49
50
Venezuela........................4.07
Pakistan...........................4.02
Ukraine............................4.02
Competitiveness Network at the World Economic
51 Pakistan...........................3.91 51 Bangladesh .....................3.90
52
53
Bangladesh .....................3.91
Italy .................................3.88
52
53
Kuwait .............................3.87
Kazakhstan ......................3.86
Forum.
54 Turkey..............................3.80 54 Egypt...............................3.74
55 Venezuela........................3.66 55 Italy .................................3.47
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 276
1.01 1.02
Capital account liberalization Commitments to WTO agreement on trade in
services
This index measures the degree of capital account liberalization
within a country, standardized on a 1–7 scale | 2007 This index measures the extent of commitments to the WTO’s General
Agreement on Trade in Services (GATS) within the financial services
sector, standardized on a 0–7 (most liberalized) scale | 2008
SOURCE: Menzie Chinn and Hiro Ito. 2009. “Financial Openness Index.” SOURCE: The World Bank, World Trade Indicators 2008
Dataset available at http://www.ssc.wisc.edu/~mchinn/research.html.
Interaction results from World Economic Forum analysis.
278
Part 2.r2 10/14/09 3:32 PM Page 279
Data Tables
Section I
Institutional environment
279
Part 2.r2 10/14/09 3:32 PM Page 280
SOURCE: Menzie Chinn and Hiro Ito. 2009. “Financial Openness Index.” SOURCE: The World Bank, World Trade Indicators 2008
Dataset available at http://www.ssc.wisc.edu/~mchinn/research.html.
Interaction results from World Economic Forum analysis.
Part 2.r2 10/14/09 3:32 PM Page 281
1.03 1.04
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.83 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.97 7
1 Sweden...........................5.87 1 Sweden...........................6.46
2 South Africa ....................5.78 2 Norway............................6.21
3 Canada ............................5.68 3 Finland.............................6.18
4 Australia ..........................5.65 4 Denmark .........................6.08
5 Finland.............................5.64 5 Netherlands.....................6.05
6 Norway............................5.61 6 Australia ..........................6.01
7 Singapore ........................5.59 7 Singapore ........................5.99
8 Denmark .........................5.53 8 Canada ............................5.96
9 Netherlands.....................5.44 9 Switzerland .....................5.86
10 Chile ................................5.41 10 United States ..................5.85
11 Switzerland .....................5.30 11 Ireland .............................5.77
12 Germany .........................5.26 12 United Kingdom ..............5.73
13 Belgium...........................5.18 13 Germany .........................5.68
14 United States ..................5.18 14 Austria.............................5.61
15 Czech Republic ...............5.17 15 Japan...............................5.56
16 Slovak Republic...............5.13 16 Belgium...........................5.54
17 United Kingdom ..............5.12 17 South Africa ....................5.54
18 Japan...............................5.11 18 Chile ................................5.42
19 Malaysia ..........................5.10 19 Israel ...............................5.39
20 United Arab Emirates......5.08 20 Czech Republic ...............5.32
21 Austria.............................5.06 21 Malaysia ..........................5.26
282 22 France .............................5.06 22 India ................................5.26
23 Indonesia.........................4.98 23 France .............................5.24
24 Ireland .............................4.94 24 Slovak Republic...............5.19
25 Bahrain ............................4.92 25 United Arab Emirates......5.09
26 Peru.................................4.80 26 Brazil ...............................5.08
27 Panama ...........................4.80 27 Hong Kong SAR ..............5.03
28 Spain ...............................4.72 28 Spain ...............................4.96
29 Hong Kong SAR ..............4.71 29 Korea, Rep. .....................4.91
30 Israel ...............................4.69 30 Poland .............................4.87
31 Korea, Rep. .....................4.67 31 China ...............................4.86
32 Brazil ...............................4.67 32 Philippines.......................4.85
33 Jordan .............................4.66 33 Argentina.........................4.74
34 Philippines.......................4.65 34 Peru.................................4.70
35 India ................................4.63 35 Indonesia.........................4.70
36 Egypt...............................4.62 36 Thailand...........................4.57
37 Saudi Arabia ....................4.59 37 Nigeria.............................4.47
38 Colombia .........................4.53 38 Panama ...........................4.45
39 Thailand...........................4.51 39 Saudi Arabia ....................4.41
40 Russian Federation .........4.51 40 Russian Federation .........4.27
41 Vietnam ...........................4.48 41 Jordan .............................4.23
42 Nigeria.............................4.48 42 Turkey..............................4.20
43 Hungary...........................4.46 43 Colombia .........................4.18
44 Poland .............................4.45 44 Vietnam ...........................4.16
45 China ...............................4.41 45 Bahrain ............................4.15
46 Ukraine............................4.40 46 Hungary...........................4.10
47 Kazakhstan ......................4.33 47 Mexico ............................4.07
48 Argentina.........................4.28 48 Venezuela........................4.07
49 Mexico ............................4.26 49 Pakistan...........................4.02
50 Kuwait .............................4.26 50 Ukraine............................4.02
51 Pakistan...........................3.91 51 Bangladesh .....................3.90
52 Bangladesh .....................3.91 52 Kuwait .............................3.87
53 Italy .................................3.88 53 Kazakhstan ......................3.86
54 Turkey..............................3.80 54 Egypt...............................3.74
55 Venezuela........................3.66 55 Italy .................................3.47
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 283
1.07 1.08
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.32 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 5.08 7
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 284
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.72 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.68 7
1 Sweden...........................6.66 1 Sweden...........................6.01
2 Finland.............................6.61 2 Finland.............................5.86
3 Denmark .........................6.58 3 Norway............................5.81
4 Singapore ........................6.51 4 Denmark .........................5.71
5 Switzerland .....................6.37 5 Singapore ........................5.67
6 Netherlands.....................6.36 6 Canada ............................5.58
7 Norway............................6.35 7 South Africa ....................5.48
8 Canada ............................6.24 8 Germany .........................5.41
9 Australia ..........................6.20 9 Jordan .............................5.31
10 Austria.............................6.16 10 Australia ..........................5.22
11 Germany .........................5.93 11 Austria.............................5.21
12 United Kingdom ..............5.87 12 United Arab Emirates......5.20
13 Hong Kong SAR ..............5.82 13 Netherlands.....................5.19
14 Ireland .............................5.57 14 Malaysia ..........................5.13
15 United Arab Emirates......5.54 15 United Kingdom ..............5.12
16 Belgium...........................5.52 16 Belgium...........................5.08
17 Chile ................................5.47 17 United States ..................5.05
18 United States ..................5.46 18 Chile ................................5.03
19 Japan...............................5.39 19 Bahrain ............................5.01
20 France .............................5.38 20 Israel ...............................5.01
21 Bahrain ............................5.32 21 Ireland .............................4.98
284 22 Israel ...............................5.19 22 Hong Kong SAR ..............4.97
23 Jordan .............................4.97 23 Japan...............................4.93
24 Saudi Arabia ....................4.90 24 India ................................4.93
25 Spain ...............................4.85 25 Switzerland .....................4.88
26 South Africa ....................4.71 26 France .............................4.85
27 Malaysia ..........................4.68 27 Thailand...........................4.81
28 Korea, Rep. .....................4.59 28 Saudi Arabia ....................4.73
29 Poland .............................4.50 29 Indonesia.........................4.70
30 Egypt...............................4.37 30 Peru.................................4.58
31 China ...............................4.26 31 Brazil ...............................4.58
32 Kuwait .............................4.21 32 Egypt...............................4.56
33 India ................................4.11 33 Poland .............................4.54
34 Panama ...........................4.02 34 Panama ...........................4.50
35 Vietnam ...........................4.00 35 Vietnam ...........................4.40
36 Thailand...........................3.96 36 Spain ...............................4.37
37 Colombia .........................3.89 37 Slovak Republic...............4.36
38 Czech Republic ...............3.85 38 Nigeria.............................4.36
39 Slovak Republic...............3.84 39 China ...............................4.35
40 Turkey..............................3.77 40 Mexico ............................4.35
41 Peru.................................3.71 41 Korea, Rep. .....................4.33
42 Italy .................................3.64 42 Hungary...........................4.33
43 Kazakhstan ......................3.63 43 Philippines.......................4.31
44 Brazil ...............................3.62 44 Kuwait .............................4.16
45 Mexico ............................3.60 45 Colombia .........................4.10
46 Hungary...........................3.59 46 Czech Republic ...............4.09
47 Pakistan...........................3.58 47 Pakistan...........................4.07
48 Indonesia.........................3.52 48 Turkey..............................3.95
49 Nigeria.............................3.47 49 Kazakhstan ......................3.75
50 Russian Federation .........3.37 50 Argentina.........................3.71
51 Philippines.......................3.32 51 Bangladesh .....................3.65
52 Argentina.........................3.24 52 Venezuela........................3.51
53 Ukraine............................3.23 53 Italy .................................3.41
54 Bangladesh .....................3.08 54 Russian Federation .........3.17
55 Venezuela........................2.87 55 Ukraine............................2.97
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 285
1.11 1.12
SOURCE: James Barth, Gerard Caprio, and Ross Levine. 2007. “Bank SOURCE: James Barth, Gerard Caprio, and Ross Levine. 2007. “Bank
Regulations Are Changing: But for Better or Worse?” World Bank Regulations Are Changing: But for Better or Worse?” World Bank
Discussion Paper No. 4646, Washington, DC Discussion Paper No. 4646, Washington, DC
Part 2.r2 10/14/09 3:32 PM Page 286
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.21 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.33 7
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 287
1.15 1.16
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.75 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.97 7
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 288
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.29 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.19 7
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 289
1.19 1.20
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: Transparency International, Corruption Perceptions Index 2008
Part 2.r2 10/14/09 3:32 PM Page 290
SOURCE: The World Bank, Doing Business 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 291
1.23 1.24
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.56 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.58 7
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 292
SOURCE: The World Bank, Doing Business 2009 SOURCE: The World Bank, Doing Business 2009
Part 2.r2 10/14/09 3:32 PM Page 293
1.27 1.28
SOURCE: The World Bank, Doing Business 2009 SOURCE: The World Bank, Doing Business 2009
Part 2.r2 10/14/09 3:32 PM Page 294
Part 2.r2 10/14/09 3:32 PM Page 295
Data Tables
Section II
Business environment
295
Part 2.r2 10/14/09 3:32 PM Page 296
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.64 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.28 7
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 297
2.03 2.04
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.38 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.69 7
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 298
2.07 2.08
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.59 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.32 7
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 300
SOURCE: Top tax rate data from Heritage Foundation, 2009 Index of SOURCE: The World Bank, Doing Business 2009
Economic Freedom; profit tax data from The World Bank, Doing
Business 2009
Part 2.r2 10/14/09 3:32 PM Page 301
2.11 2.12
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.67 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 6.11 7
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 302
SOURCE: International Telecommunication Union, World SOURCE: International Telecommunication Union, World
Telecommunication Indicators 2008; national sources Telecommunication Indicators 2008; national sources
1
2005
Part 2.r2 10/14/09 3:32 PM Page 303
2.15 2.16
SOURCE: International Telecommunication Union, World SOURCE: International Telecommunication Union, World
Telecommunication Indicators 2008; national sources Telecommunication Indicators 2008; national sources
1
2006
Part 2.r2 10/14/09 3:32 PM Page 304
SOURCE: The World Bank, Doing Business 2009 SOURCE: The World Bank, Doing Business 2009
Part 2.r2 10/14/09 3:32 PM Page 305
2.19 2.20
SOURCE: The World Bank, Doing Business 2009 SOURCE: The World Bank, Doing Business 2009
Part 2.r2 10/14/09 3:32 PM Page 306
SOURCE: The World Bank, Doing Business 2009 SOURCE: The World Bank, Doing Business 2009
Part 2.r2 10/14/09 3:32 PM Page 307
Data Tables
Section III
Financial stability
307
Part 2.r2 10/14/09 3:32 PM Page 308
SOURCE: Moody’s Statistical Handbook (November 2008) SOURCE: Moody’s Statistical Handbook (November 2008)
Part 2.r2 10/14/09 3:32 PM Page 309
3.03 3.04
SOURCE: IMF, World Economic Outlook Database (April 2009) SOURCE: Moody’s Statistical Handbook (November 2008)
Part 2.r2 10/14/09 3:32 PM Page 310
SOURCE: Moody’s Statistical Handbook (November 2008) SOURCE: Moody’s Statistical Handbook (November 2008)
Part 2.r2 10/14/09 3:32 PM Page 311
3.07 3.08
SOURCE: Bank of International Settlements, Quarterly Review, SOURCE: Global Property Guide website, www.globalpropertyguide.com
September 2009, http://www.bis.org/statistics/secstats.htm; GDP
and inflation data from IMF, World Economic Outlook Database (April
2009)
Part 2.r2 10/14/09 3:32 PM Page 313
3.11 3.12
1 Australia...........................20.00 1 Australia...........................20.00
1 Austria .............................20.00 1 Austria .............................20.00
1 Canada.............................20.00 1 Canada.............................20.00
1 Denmark..........................20.00 1 Denmark..........................20.00
1 Finland .............................20.00 1 Finland .............................20.00
1 France..............................20.00 1 France..............................20.00
1 Germany..........................20.00 1 Germany..........................20.00
1 Netherlands .....................20.00 1 Netherlands .....................20.00
1 Norway ............................20.00 1 Norway ............................20.00
1 Singapore ........................20.00 1 Singapore ........................20.00
1 Sweden ...........................20.00 1 Sweden ...........................20.00
1 Switzerland......................20.00 1 Switzerland......................20.00
1 United States...................20.00 1 United States...................20.00
14 United Kingdom...............19.83 14 United Kingdom...............19.83
15 Spain................................19.08 15 Spain................................19.08
16 Belgium ...........................19.00 16 Belgium ...........................19.00
16 Hong Kong SAR ..............19.00 16 Hong Kong SAR ..............19.00
18 Ireland..............................18.37 18 Ireland..............................18.37
19 Chile ................................18.00 19 Japan ...............................18.00
19 Japan ...............................18.00 20 Kuwait .............................17.00
21 Israel................................17.00 20 Saudi Arabia.....................17.00
21 Kuwait .............................17.00 22 Chile ................................16.00
313
21 Saudi Arabia.....................17.00 22 China ...............................16.00
24 China ...............................16.00 22 Italy..................................16.00
24 Czech Republic................16.00 22 Slovak Republic ...............16.00
24 Italy..................................16.00 26 Bahrain ............................15.00
24 Korea, Rep.......................16.00 26 Czech Republic................15.00
24 Malaysia ..........................16.00 26 Israel................................15.00
24 Slovak Republic ...............16.00 26 Korea, Rep.......................15.00
30 Mexico.............................15.83 30 Malaysia ..........................14.00
31 South Africa.....................15.70 30 Poland..............................14.00
32 Bahrain ............................15.00 32 Mexico.............................12.83
32 Poland..............................15.00 33 South Africa.....................12.70
34 Thailand ...........................14.03 33 Thailand ...........................12.70
35 Brazil................................13.00 35 Russian Federation..........11.70
35 Colombia .........................13.00 36 Brazil................................11.00
35 Peru .................................13.00 36 Peru .................................11.00
38 Russian Federation..........12.70 38 Hungary ...........................10.95
39 Jordan..............................12.00 39 Kazakhstan ......................10.90
40 Kazakhstan ......................11.90 40 India.................................10.75
41 Egypt ...............................11.00 41 Colombia .........................10.00
42 Hungary ...........................10.95 41 Egypt ...............................10.00
43 India.................................10.75 41 Panama............................10.00
44 Indonesia .........................10.00 44 Jordan................................9.00
44 Panama............................10.00 45 Vietnam .............................8.70
44 Philippines .......................10.00 46 Indonesia ...........................8.00
47 Vietnam .............................9.70 46 Philippines .........................8.00
48 Turkey ................................8.70 48 Turkey ................................7.70
49 Nigeria ...............................8.21 48 Venezuela ..........................7.70
50 Venezuela ..........................7.70 50 Nigeria ...............................7.54
51 Ukraine ..............................5.28 51 Argentina ...........................5.00
52 Argentina ...........................5.00 51 Pakistan .............................5.00
52 Pakistan .............................5.00 53 Ukraine ..............................4.28
n/a Bangladesh ..........................n/a n/a Bangladesh ..........................n/a
n/a United Arab Emirates ..........n/a n/a United Arab Emirates ..........n/a
SOURCE: Standard and Poor’s, August 2009 SOURCE: Standard and Poor’s, August 2009
Part 2.r2 10/14/09 3:32 PM Page 314
SOURCE: GDP and inflation level data from IMF, World Economic SOURCE: Economist Intelligence Unit CountryData Database, data
Outlook Database (April 2009); deposit interest rate data from World retrieved August 2009
Bank Financial Development Indicators, retrieved June 2009; inflation
volatility data from Bloomberg, retrieved June 2009.
Part 2.r2 10/14/09 3:32 PM Page 315
3.15
1 Norway ............................32.50
2 Finland .............................37.50
3 Germany..........................37.79
4 France..............................40.00
5 United States...................44.50
6 Japan ...............................49.50
7 Australia...........................57.64
8 Netherlands .....................57.77
9 Denmark..........................62.14
10 Switzerland......................65.00
11 Belgium ...........................68.27
12 Hong Kong SAR ..............75.31
13 China ...............................87.65
14 Sweden ...........................88.25
15 United Kingdom...............90.43
16 Slovak Republic ...............91.75
17 Spain..............................104.33
18 Italy................................110.42
19 Malaysia ........................117.79
20 Austria ...........................119.47
21 Thailand .........................121.79
22 Chile ..............................127.85
315
23 Czech Republic..............127.95
24 Saudi Arabia...................150.84
25 Israel..............................175.00
26 Poland............................183.74
27 Brazil..............................189.83
28 Peru ...............................195.53
29 Korea, Rep.....................196.93
30 Colombia .......................224.65
31 South Africa...................225.45
32 Mexico...........................228.25
33 Panama..........................229.42
34 Ireland............................230.25
35 Philippines .....................240.00
36 Turkey ............................274.00
37 Russian Federation........319.59
38 Egypt .............................325.00
39 Vietnam .........................338.35
40 Indonesia .......................340.28
41 Bahrain ..........................356.54
42 Hungary .........................375.01
43 Kazakhstan ....................508.90
44 Ukraine .......................1,837.07
45 Argentina ....................2,135.89
n/a Bangladesh ..........................n/a
n/a Canada.................................n/a
n/a India .....................................n/a
n/a Jordan..................................n/a
n/a Kuwait..................................n/a
n/a Nigeria .................................n/a
n/a Pakistan ...............................n/a
n/a Singapore.............................n/a
n/a United Arab Emirates ..........n/a
n/a Venezuela ............................n/a
Data Tables
Section IV
Banking financial services
317
Part 2.r2 10/14/09 3:32 PM Page 318
4.01 4.02
3: Data Tables | Banking financial services
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000.
“A New Database on Financial Development and Structure.” World “A New Database on Financial Development and Structure.” World
Bank Economic Review 14: 597–605. Updated November 2008 Bank Economic Review 14: 597–605. Updated November 2008
1 1 2
2006 2005 2006
Part 2.r2 10/14/09 3:32 PM Page 319
4.03 4.04
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. SOURCE: Economist Intelligence Unit CountryData Database, data
“A New Database on Financial Development and Structure.” World retrieved April 2009
Bank Economic Review 14: 597–605. Updated November 2008
1
2006
Part 2.r2 10/14/09 3:32 PM Page 320
4.05 4.06
3: Data Tables | Banking financial services
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000.
“A New Database on Financial Development and Structure.” World “A New Database on Financial Development and Structure.” World
Bank Economic Review 14: 597–605. Updated November 2008 Bank Economic Review 14: 597–605. Updated November 2008
1 1
2006 2006
Part 2.r2 10/14/09 3:32 PM Page 321
4.07 4.08
SOURCE: Bank of International Settlements, Quarterly Review March SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000.
2009; GDP data from IMF, World Economic Outlook Database (April “A New Database on Financial Development and Structure.” World
2009) Bank Economic Review 14: 597–605. Updated November 2008
Part 2.r2 10/14/09 3:32 PM Page 322
4.09 4.10
3: Data Tables | Banking financial services
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. SOURCE: BankScope database, data retrieved June 2009
“A New Database on Financial Development and Structure.” World
Bank Economic Review 14: 597–605. Updated November 2008
Part 2.r2 10/14/09 3:32 PM Page 323
4.11 4.12
SOURCE: BankScope database, data retrieved June 2009 SOURCE: IMF, Global Financial Stability Report, April 2009
1
2007
Part 2.r2 10/14/09 3:32 PM Page 324
4.13 4.14
3: Data Tables | Banking financial services
SOURCE: The World Bank, Doing Business 2009 SOURCE: The World Bank, Doing Business 2009
Part 2.r2 10/14/09 3:32 PM Page 325
Data Tables
Section V
Non-banking financial services
325
Part 2.r2 10/14/09 3:32 PM Page 326
5.01 5.02
3: Data Tables | Non-banking financial services
SOURCE: Thomson Financial SDC Platinum, retrieved April 2009 SOURCE: IPO information from Thomson Financial SDC Platinum,
retrieved April 2009; GDP data from IMF, World Economic Outlook
Database (April 2009)
Part 2.r2 10/14/09 3:32 PM Page 327
5.03 5.04
SOURCE: Thomson Financial SDC Platinum, retrieved April 2009 SOURCE: Thomson Financial SDC Platinum, retrieved April 2009
Part 2.r2 10/14/09 3:32 PM Page 328
5.05 5.06
3: Data Tables | Non-banking financial services
SOURCE: Thomson Financial SDC Platinum, retrieved April 2009; GDP SOURCE: Thomson Financial SDC Platinum, retrieved April 2009
data from IMF, World Economic Outlook Database (April 2009)
Part 2.r2 10/14/09 3:32 PM Page 329
5.07 5.08
SOURCE: Swiss Re, World Insurance in 2007: Emerging Markets SOURCE: Swiss Re, World Insurance in 2007: Emerging Markets
Leading the Way Leading the Way
Part 2.r2 10/14/09 3:32 PM Page 330
5.09 5.10
3: Data Tables | Non-banking financial services
SOURCE: Swiss Re, World Insurance in 2007: Emerging Markets SOURCE: Swiss Re, World Insurance in 2007: Emerging Markets
Leading the Way Leading the Way
Part 2.r2 10/14/09 3:32 PM Page 331
5.11 5.12
SOURCE: Global Insight, World Industry Monitor, April 2009 Source: Dealogic Analytics, data retrieved April 2009; GDP data from
IMF, World Economic Outlook Database (April 2009)
Part 2.r2 10/14/09 3:32 PM Page 332
5.13
3: Data Tables | Non-banking financial services
1 United States...................60.29
2 Russian Federation............4.55
3 United Kingdom.................3.27
4 Argentina ...........................2.58
5 France................................1.98
6 Canada...............................1.95
7 Germany............................1.67
8 India...................................1.57
9 Ukraine ..............................1.56
10 Brazil..................................1.46
11 Japan .................................1.32
12 Spain..................................1.16
13 Mexico...............................1.11
14 Italy....................................0.99
15 Australia.............................0.98
16 Kazakhstan ........................0.90
17 Peru ...................................0.86
18 Netherlands .......................0.73
19 Indonesia ...........................0.72
20 Korea, Rep.........................0.38
20 Turkey ................................0.38
332 22 Chile ..................................0.35
23 China .................................0.34
24 Colombia ...........................0.32
25 Philippines .........................0.28
26 Belgium .............................0.28
27 Singapore ..........................0.24
28 Switzerland........................0.23
29 Malaysia ............................0.22
30 Ireland................................0.21
31 Sweden .............................0.21
32 South Africa.......................0.19
33 Vietnam .............................0.16
34 Pakistan .............................0.16
35 Denmark............................0.16
36 Norway ..............................0.15
37 Hong Kong SAR ................0.15
38 Thailand .............................0.13
39 Czech Republic..................0.13
40 United Arab Emirates ........0.12
41 Finland ...............................0.11
41 Slovak Republic .................0.11
43 Nigeria ...............................0.09
44 Austria ...............................0.08
45 Saudi Arabia.......................0.07
46 Hungary .............................0.07
47 Poland................................0.07
48 Egypt .................................0.06
49 Kuwait ...............................0.06
50 Bahrain ..............................0.05
50 Bangladesh........................0.05
52 Venezuela ..........................0.04
53 Panama..............................0.03
54 Jordan................................0.02
55 Israel..................................0.02
Data Tables
Section VI
Financial markets
333
Part 2.r2 10/14/09 3:32 PM Page 334
SOURCE: Bank of International Settlements, Triennial Central Bank SOURCE: Bank of International Settlements, Triennial Central Bank
Survey, December 2007 Survey, December 2007
Part 2.r2 10/14/09 3:32 PM Page 335
6.03 6.04
SOURCE: Bank of International Settlements, Triennial Central Bank SOURCE: Bank of International Settlements, Triennial Central Bank
Survey, December 2007 Survey, December 2007
Part 2.r2 10/14/09 3:32 PM Page 336
SOURCE: Bank of International Settlements, Triennial Central Bank SOURCE: Bank of International Settlements, Triennial Central Bank
Survey, December 2007 Survey, December 2007
Part 2.r2 10/14/09 3:32 PM Page 337
6.07 6.08
SOURCE: Bank of International Settlements, Triennial Central Bank SOURCE: Bank of International Settlements, Triennial Central Bank
Survey, December 2007 Survey, December 2007
Part 2.r2 10/14/09 3:32 PM Page 338
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000.
“A New Database on Financial Development and Structure.” World “A New Database on Financial Development and Structure.” World
Bank Economic Review 14: 597–605. Updated November 2008 Bank Economic Review 14: 597–605. Updated November 2008
1 2
2005 2006
Part 2.r2 10/14/09 3:32 PM Page 339
6.11 6.12
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000.
“A New Database on Financial Development and Structure.” World “A New Database on Financial Development and Structure.” World
Bank Economic Review 14 597–605. Updated November 2008 Bank Economic Review 14: 597–605. Updated May 2009
1 2
2005 2006
Part 2.r2 10/14/09 3:32 PM Page 340
SOURCE: Bank of International Settlements, Quarterly Review, SOURCE: Bank of International Settlements, Quarterly Review
September 2009, http://www.bis.org/statistics/secstats.htm; GDP September 2009, http://www.bis.org/statistics/secstats.htm; GDP
and inflation data from IMF, World Economic Outlook Database and inflation data from IMF, World Economic Outlook Database
(April 2009) (April 2009)
Part 2.r2 10/14/09 3:32 PM Page 341
6.15 6.16
1 Ireland............................279.13 1 Panama............................46.89
2 Spain..............................171.71 2 Austria .............................39.45
3 Netherlands ...................151.09 3 Belgium ...........................36.80
4 United Kingdom.............131.63 4 Finland .............................32.70
5 Switzerland....................130.16 5 Ireland..............................27.89
6 Belgium .........................125.16 6 Philippines .......................24.09
7 United States.................122.67 7 Hungary ...........................17.86
8 Germany........................118.06 8 Argentina .........................17.27
9 France............................102.11 9 Italy..................................15.01
10 Austria .............................93.20 10 Germany..........................12.68
11 Sweden ...........................77.95 11 Spain................................11.51
12 Australia...........................61.31 12 Poland................................9.21
13 Italy..................................60.48 13 Peru ...................................8.61
14 Norway ............................54.02 14 Venezuela ..........................8.13
15 Hong Kong SAR ..............50.39 15 Colombia ...........................7.16
16 Denmark..........................47.26 16 Slovak Republic .................7.03
17 Singapore ........................40.65 17 Turkey ................................6.25
18 Finland .............................32.53 18 Canada...............................6.07
19 Canada.............................27.38 19 Sweden .............................6.01
20 Thailand ...........................25.69 20 Denmark............................5.53
21 Malaysia ..........................24.21 21 Israel..................................4.91
22 Japan ...............................21.33 22 Mexico...............................4.04
23 Korea, Rep.......................13.30 23 South Africa.......................3.64 341
24 South Africa.....................12.83 24 Brazil..................................3.64
25 Hungary ...........................10.91 25 Malaysia ............................3.09
26 Philippines .......................10.03 26 France................................2.81
27 Panama..............................7.23 27 Indonesia ...........................2.46
28 Russian Federation............7.17 28 Netherlands .......................2.42
29 Israel..................................6.19 29 Thailand .............................2.15
30 Chile ..................................5.48 30 Russian Federation............1.87
31 Mexico...............................5.12 31 Chile ..................................1.81
32 Brazil..................................4.65 32 Australia.............................1.71
33 India...................................3.84 33 Hong Kong SAR ................1.26
34 Venezuela ..........................3.49 34 Korea, Rep.........................0.75
35 Indonesia ...........................3.43 35 United Kingdom.................0.54
36 Peru ...................................2.39 36 Switzerland........................0.37
37 Argentina ...........................2.37 37 Singapore ..........................0.24
38 Turkey ................................1.80 38 China .................................0.17
39 Colombia ...........................1.51 39 Japan .................................0.15
40 China .................................1.40 40 United States.....................0.08
41 Slovak Republic .................0.84 n/a Bahrain.................................n/a
42 Poland................................0.59 n/a Bangladesh ..........................n/a
n/a Bahrain.................................n/a n/a Czech Republic ....................n/a
n/a Bangladesh ..........................n/a n/a Egypt ...................................n/a
n/a Czech Republic ....................n/a n/a India .....................................n/a
n/a Egypt ...................................n/a n/a Jordan..................................n/a
n/a Jordan..................................n/a n/a Kazakhstan...........................n/a
n/a Kazakhstan...........................n/a n/a Kuwait..................................n/a
n/a Kuwait..................................n/a n/a Nigeria .................................n/a
n/a Nigeria .................................n/a n/a Norway ................................n/a
n/a Pakistan ...............................n/a n/a Pakistan ...............................n/a
n/a Saudi Arabia.........................n/a n/a Saudi Arabia.........................n/a
n/a Ukraine ................................n/a n/a Ukraine ................................n/a
n/a United Arab Emirates ..........n/a n/a United Arab Emirates ..........n/a
n/a Vietnam ...............................n/a n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Quarterly Review SOURCE: Bank of International Settlements, Quarterly Review
March 2009; GDP data from IMF, World Economic Outlook Database March 2009; GDP data from IMF, World Economic Outlook Database
(April 2009) (April 2009)
Part 2.r2 10/14/09 3:32 PM Page 342
Part 2.r2 10/14/09 3:32 PM Page 343
Data Tables
Section VII
Financial access
343
Part 2.r2 10/14/09 3:32 PM Page 344
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 5.08 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.26 7
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 345
7.03 7.04
RANK COUNTRY/ECONOMY SCORE 1 MEAN: 3.54 7 RANK COUNTRY/ECONOMY SCORE 1 MEAN: 4.18 7
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Part 2.r2 10/14/09 3:32 PM Page 346
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009 SOURCE: United Nations Conference on Trade and Development, 2008;
GDP data from IMF, World Economic Outlook Database (April 2009)
Part 2.r2 10/14/09 3:32 PM Page 347
7.07 7.08
SOURCE: CGAP. 2009. “Financial Access 2009” (forthcoming), SOURCE: CGAP. 2009. “Financial Access 2009” (forthcoming),
Washington, DC: CGAP 2009. Full results to be released by CGAP in Washington, DC: CGAP 2009. Full results to be released by CGAP in
October 2009. October 2009.
1
2007
Part 2.r2 10/14/09 3:32 PM Page 348
SOURCE: CGAP. 2009. “Financial Access 2009” (forthcoming), SOURCE: CGAP. 2009. “Financial Access 2009” (forthcoming),
Washington, DC: CGAP 2009. Full results to be released by CGAP in Washington, DC: CGAP 2009. Full results to be released by CGAP in
October 2009. October 2009.
Part 2.r2 10/14/09 3:32 PM Page 349
7.11
1 Bangladesh......................41.22
2 Vietnam ...........................29.03
3 Mexico.............................20.96
4 Indonesia .........................19.66
5 Peru .................................17.60
6 Chile ................................15.34
7 Jordan..............................12.45
8 Philippines .......................11.03
9 Malaysia ............................7.77
10 Egypt .................................7.16
11 Colombia ...........................6.46
12 India...................................4.80
13 South Africa.......................4.10
14 Kazakhstan ........................3.37
15 Nigeria ...............................3.00
16 Pakistan .............................2.61
17 Brazil..................................1.62
18 Panama..............................1.56
19 Argentina ...........................0.81
20 Ukraine ..............................0.64
21 Venezuela ..........................0.62
22 Russian Federation............0.54
23 Poland................................0.25 349
24 China .................................0.19
25 Korea, Rep.........................0.07
26 Thailand .............................0.06
27 Turkey ................................0.03
n/a Australia...............................n/a
n/a Austria .................................n/a
n/a Bahrain.................................n/a
n/a Belgium ...............................n/a
n/a Canada.................................n/a
n/a Czech Republic ....................n/a
n/a Denmark ..............................n/a
n/a Finland .................................n/a
n/a France..................................n/a
n/a Germany ..............................n/a
n/a Hong Kong SAR...................n/a
n/a Hungary ...............................n/a
n/a Ireland..................................n/a
n/a Israel ....................................n/a
n/a Italy ......................................n/a
n/a Japan ...................................n/a
n/a Kuwait..................................n/a
n/a Netherlands .........................n/a
n/a Norway ................................n/a
n/a Saudi Arabia.........................n/a
n/a Singapore.............................n/a
n/a Slovak Republic ...................n/a
n/a Spain....................................n/a
n/a Sweden ...............................n/a
n/a Switzerland ..........................n/a
n/a United Arab Emirates ..........n/a
n/a United Kingdom...................n/a
n/a United States.......................n/a
The following section complements the Data Tables by 1.03 Domestic financial sector liberalization
providing additional information and definitions for the This index measures the degree of domestic financial sector
liberalization within a country, standardized on a 1–7 scale |
hard data indicators that enter the composition of the 2009 or most recent year available
Financial Development Index 2009. In the following This index was calculated on the basis of whether or not
controls (ceilings and floors) on interest rates and credit exist,
pages, the number next to the variable corresponds to and whether or not deposits in foreign currency are allowed.
the number of the Data Table that shows the ranks and Schmukler and Kaminsky updated their results up to 2005 for
a subset of the sample countries. The World Economic Forum
scores for all countries on this particular indicator. used their methodology to update all of the countries for the
The data used in this Report represent the best avail- purposes of the calculations in this Report. National sources,
able estimates from various international agencies, private central banks, and IMF reports were the main sources of these
updates. The World Economic Forum then created an interaction
sources, and national authorities at the time the Report term among these data, the Legal and regulatory issues subpillar,
was prepared. It is possible that some data will have been and the Bond market development subpillar of the Financial
Development Index, and standardized the scores on a scale
updated or revised after publication. from 1 to 7.
Source: The World Bank, Doing Business 2009 2.10 Time to pay taxes
Time to prepare, file, and pay or withhold the corporate
income tax, the value-added tax, and social security
1.26 Number of procedures to enforce a contract
contributions (hours per year) | 2009
Number of procedures from the moment the plaintiff files Preparation time includes the time to collect all information nec-
a lawsuit in court until the moment of payment | 2008 essary to compute the tax payable. If separate accounting
A procedure is defined as any interaction between the parties, books must be kept for tax purposes, or separate calculations
or between them and the judge or court officer. This includes made, the time associated with these processes is included.
steps to file the case, steps for trial and judgment, and steps Filing time includes the time to complete all necessary tax
necessary to enforce the judgment. This year the Survey forms and make all necessary calculations. Payment time is the
allowed respondents to record procedures that exist in civil law hours needed to make the payment online or at the tax office.
but not common law jurisdictions, and vice versa. To indicate Where taxes and contributions are paid in person, the time
the overall efficiency of court procedures, one procedure is now includes delays while waiting.
subtracted for countries that have specialized commercial
352 courts and one procedure for countries that allow electronic Source: The World Bank, Doing Business 2009
filing of court cases.
Source: The World Bank, Doing Business 2009 2.13 Internet users
Internet users per 100 inhabitants | 2007
Internet users are people with access to the worldwide net-
1.27 Strength of investor protection
work.
This index assesses the strength of investor protection on a
0-to-10 (best) scale | 2008 Source: International Telecommunication Union, World
The Strength of Investor Protection Index is the average of the Telecommunication Indicators 2008; national sources
extent of disclosure index, the extent of director liability index,
and the ease of shareholder suits index. The index ranges from
0 to 10, with higher values indicating more investor protection. 2.14 Broadband Internet subscribers
Total broadband Internet subscribers per 100 inhabitants |
Source: The World Bank, Doing Business 2009 2007 or most recent year available
The International Telecommunication Union considers
broadband to be any dedicated connection to the Internet of
1.28 Cost of enforcing contracts
256 kilobits per second (kb/s) or faster, in both directions.
Cost of enforcing contracts as a percentage of claim | 2008 Broadband subscribers refers to the sum of DSL, cable modem,
This variable is recorded as a percentage of the claim, assumed and other broadband (for example, fiber optic, fixed wireless,
to be equivalent to 200 percent of income per capita. Only apartment LANs, satellite connections) subscribers.
official costs required by law are recorded, including court and
enforcement costs and average attorney fees where the use of Source: International Telecommunication Union, World
attorneys is mandatory or common. Telecommunication Indicators 2008; national sources
Source: The World Bank, Doing Business 2009 3.01 Change in real effective exchange rate
Average percentage change in real effective exchange rate
from year to year over the period 2003—07. Higher REER
2.18 Cost of registering property represents appreciation | as of 2007
Cost of registering property as a percentage of income per Real effective exchange rates (REERs) are available only for a
capita | 2008 subgroup of rated countries and come from two main sources:
This variable is a percentage of the property value, assumed to JP Morgan and the IMF. The JP Morgan REER index relies
be equivalent to 50 times income per capita. Only official costs on available measures of the prices of domestically produced 353
required by law are recorded; these include fees, transfer taxes, finished manufactured goods (excluding primary food and
stamp duties, and any other payment to the property registry, energy), while the IMF index is based on consumer prices.
notaries, public agencies, or lawyers. Other taxes, such as Cross-country comparisons are therefore difficult, but changes
capital gains tax or value-added tax, are excluded from the cost over time for individual countries still give a rough indication of
measure. Both costs borne by the buyer and those borne by the evolution of relative costs. This variable relies on available
the seller are included. If cost estimates differ among sources, measures of the prices of domestically produced finished
the median reported value is used. manufactured goods and consumer prices.
Source: The World Bank, Doing Business 2009 Source: Moody’s Statistical Handbook (November 2008)
3.05 External debt to GDP (developing economies) 3.11 Local currency sovereign rating
External debt as a percentage of GDP | 2007 This variable measures the probability that a country will
This variable measures the total debt held by nonresidents, pay its local currency borrowing in a full and timely manner
regardless of the currency in which the debt is denominated, | 2009
as a share of GDP for emerging markets only. Local currency sovereign credit ratings of Standard and Poor’s
were converted on a linear numerical scale from 0 (reflecting
Source: Moody’s Statistical Handbook (November 2008) SD) to 20 (reflecting AAA). Credit outlooks were given either a
positive 0.3 or a negative 0.3 to be added or taken off of the
actual rating of a country. Given that ratings action does not
3.06 Net international investment position to GDP
take place at regular intervals, calculating the ratings for one
(advanced economies) year would take into account the number of months that a
Net international investment position as a percentage of country was rated before a change in the rating. For instance,
GDP | 2007 if a country was upgraded one notch on February first, from a
For advanced economies only, this variable measures the role 16 to a 17, then a weighted average would be calculated (11
these countries play in the international movement of capital. months based on the new rating of 17 and 1 month based on
The estimate is based on the difference between the market the rating of 16). The same thing occurred for downgrades, and
value of a country’s foreign assets and that of its liabilities for credit outlook changes.
relative to GDP.
Source: Standard and Poor’s, August 2009
Source: Moody’s Statistical Handbook (November 2008)
where F is deposit money bank claims, P_e is end-of-period Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
CPI, and P_a is average annual CPI. 2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605.
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. Updated November 2008
2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605.
Updated November 2008 4.06 Bank deposits to GDP
This variable shows the demand, time, and savings deposits
in deposit money banks as a share of GDP | 2007 or most
4.02 Central bank assets to GDP recent year available
Claims on domestic real nonfinancial sector by the central The ratio is calculated using the following deflation method:
bank as a share of GDP | 2007 or most recent year
available
The ratio is calculated using the following deflation method: (0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
GDPt
P_at
where F is central bank claims, P_e is end-of-period CPI, and Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
P_a is average annual CPI. 2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605. 355
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. Updated November 2008
2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605.
Updated November 2008 4.07 Money market instruments to GDP
Total money market instruments ($US billions) as a
percentage of GDP | 2008
4.03 Financial system deposits to GDP Figures are based on residence of issuer.
Demand, time, and savings deposits in deposit money
banks and other financial institutions as a share of GDP | Source: Bank of International Settlements, Quarterly Review
2007 or most recent year available March 2009; GDP data from IMF, World Economic Outlook
The ratio is calculated using the following deflation method: Database (April 2009)
(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
4.08 Aggregate profitability indicator
Based on a three-year average of three measures of
profitability: net interest margin, bank return on assets,
GDPt
and bank return on equity | 2005–07 average
P_at
Net interest margin is the accounting value of bank’s net
where F is demand and time and savings deposits, P_e is interest revenue as a share of its interest-bearing (total earning)
end-of-period CPI, and P_a is average annual CPI. assets. Bank return on assets is calculated as net income as a
percentage of total assets. Bank return on equity is calculated
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. as net income as a percentage of total shareholders’ equity.
2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605. Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
Updated November 2008 2000. “A New Database on Financial Development and
Structure.” World Bank Economic Review 14: 597–605.
Updated November 2008
4.04 M2 to GDP
Money and quasi-money supply as a percentage of GDP |
4.09 Bank overhead costs
2008
Bank overhead costs as a percentage of total assets | 2007
This variables shows money and quasi-money as a percentage
of GDP, calculated using the following deflation method: This is calculated as an average for each country in 2007.
Approximately 90 percent of the banking sector assets in a
given country and year are covered in the sourced database.
(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
2000. “A New Database on Financial Development and
GDPt Structure.” World Bank Economic Review 14: 597–605.
P_at Updated November 2008
Source: Dealogic Analytics, data retrieved April 2009 6.06 Interest rate derivatives turnover: Options
VI: Financial markets Percentage share of world total of over-the-counter interest
rate options turnover | April 2007
Transactions are measured in US dollars and involve option
6.01 Spot foreign exchange turnover contracts that give the right to pay or receive a specific interest
Percentage share of world total of spot foreign exchange rate on a predetermined principal for a set period of time.
turnover | April 2007 Percentages are based on 55 economies included in the Index.
Transactions are measured in US dollars and involve the
Source: Bank of International Settlements, Triennial Central
exchange of two currencies at a rate agreed upon on the date
Bank Survey, December 2007
of the contract for value of delivery at a time less than two days
into the future. The spot legs of swaps were not included
among spot transactions but were treated as swap transactions
even when they were for settlement within two days (i.e.,
including “tomorrow/next day” transactions). Percentages are
based on 55 economies included in the Index.
6.07 Foreign exchange derivatives turnover: Currency swaps 6.12 Number of listed companies per 10,000 people
Percentage share of world total of over-the-counter foreign Number of publicly listed companies per 10,000 people |
exchange currency swaps turnover | April 2007 2007
Transactions are measured in US dollars and involve contracts
that commit two counterparties to exchange streams of interest Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
payments in different currencies for an agreed period of time 2000. “A New Database on Financial Development and
and to exchange principal amounts in different currencies at a Structure.” World Bank Economic Review 14: 597–605.
pre-agreed exchange rate at maturity. Percentages are based Updated May 2009
on 55 economies included in the Index.
Source: Bank of International Settlements, Triennial Central 6.13 Private domestic bond market capitalization to GDP
Bank Survey, December 2007 Domestic debt securities issued by financial institutions
and corporations as a share of GDP | 2008
Ratio is calculated using the following deflation method:
6.08 Foreign exchange derivatives turnover: Options
Percentage share of world total of over-the-counter foreign
exchange options turnover | April 2007
Transactions are measured in US dollars and involve contracts
(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
that give the right to buy or sell a currency with another currency GDPt
at a specified exchange rate during a specified period. This P_at
category also includes exotic foreign exchange options such as
average rate options and barrier options. Percentages are based where F is amount outstanding of private domestic debt
on 55 economies included in the Index. securities, P_e is end-of-period CPI, and P_a is average annual
CPI.
Source: Bank of International Settlements, Triennial Central
Bank Survey, December 2007 Source: Bank of International Settlements, Quarterly Review,
September 2009, http://www.bis.org/statistics/secstats.htm;
GDP and inflation data from IMF, World Economic Outlook
6.09 Stock market turnover ratio Database (April 2009)
Ratio of the value of total shares traded to average real
market capitalization | 2007
The denominator is deflated using the following method: 6.14 Public domestic bond market capitalization to GDP
Domestic debt securities issued by government as a share
Tt of GDP | 2008
P_at Ratio is calculated using the following deflation method:
,
358
(0.5) × [ Mt
P_et
+
Mt –1
P_et –1 ] (0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
where T is total value traded, M is stock market capitalization, GDPt
P_e is end-of-period CPI, and P_a is average annual CPI. P_at
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine.
where F is amount outstanding of public domestic debt
2000. “A New Database on Financial Development and
securities, P_e is end-of-period CPI, and P_a is average annual
Structure.” World Bank Economic Review 14: 597–605.
CPI.
Updated November 2008
Source: Bank of International Settlements, Quarterly Review,
September 2009, http://www.bis.org/statistics/secstats.htm;
6.10 Stock market capitalization to GDP GDP and inflation data from IMF, World Economic Outlook
This indicator is the value of listed shares as a percentage Database (April 2009)
of GDP | 2007 or most recent year available
The ratio is calculated using the following deflation method:
6.15 Private international bonds to GDP
(0.5) × [ Ft
P_et
+
Ft –1
P_et –1 ] ,
International debt securities issued by financial institutions
and corporations as a share of GDP | 2008
International debt securities issued by financial institutions and
GDPt corporate issuers. This is based on the nationality of the issuer.
P_at Ratio is calculated using the following deflation method:
Nouriel Roubini
Nouriel Roubini is an internationally renowned expert
in the field of international macroeconomics. He is a
Professor of Economics at New York University’s
Stern School of Business and is also the Co-Founder
and Chairman of RGE Monitor (www.rgemonitor.com).
From 1998 to 2000, Professor Roubini served as the
Senior Economist for International Affairs at the White
House Council of Economic Advisers and then the
Senior Adviser to the Under Secretary for International
Affairs at the US Treasury Department, helping to resolve
the Asian and global financial crises, among other issues.
The International Monetary Fund, the World Bank, and
numerous other prominent public and private institutions
have also drawn upon his consulting expertise. He has
published more than 70 theoretical and empirical policy
papers on international macroeconomic issues and co-
authored the books Political Cycles: Theory and Evidence
(MIT Press, 1997) and Bailouts or Bail-ins? Responding
to Financial Crises in Emerging Markets (Institute for
International Economics, 2004). Professor Roubini’s
views on global economics issues are widely cited by
the media, and his blog was named one of 20 “must-
read” sources by the Wall Street Journal. Professor
Roubini received an undergraduate degree from Bocconi
University in Milan, Italy, and a PhD in Economics from
Harvard University. Prior to joining Stern, he was a faculty
member of the Economics Department at Yale University.
Ayah El Said
Ayah El Said is a Lead Analyst at RGE Monitor working
362 on financial development and emerging markets issues,
with a particular focus on the Middle East and North
Africa. Her areas of expertise include international finance
and monetary economics. Prior to joining RGE Monitor,
she worked in the Monetary Policy Unit of the Central
Bank of Egypt, the World Bank office in Cairo, and
as a Teaching Associate/Adjunct at New York University.
Ms. El Said holds a BA with highest honors from the
American University in Cairo, and a Master’s degree from
New York University, where she was a Fulbright scholar
for two years. Both degrees were in Economics.
Part 2.r2 10/14/09 3:32 PM Page 363
Partner Institutes
Partner Institutes
Partner Institutes
Finland Jordan
ETLA—The Research Institute of the Finnish Economy Ministry of Planning & International Cooperation
Petri Rouvinen, Research Director Jordan National Competitiveness Team
Pasi Sorjonen, Head of the Forecasting Group Hiba Abu Taleb, Primary Researcher
Pekka Ylä-Anttila, Managing Director Hussein Abwini, Primary Researcher
Kawthar Al-Zou’bi, Primary Researcher
France
HEC School of Management, Paris Kazakhstan
Bertrand Moingeon, Professor and Deputy Dean JSC “National Analytical Centre of the Government and the
Bernard Ramanantsoa, Professor and Dean National Bank of the Republic of Kazakhstan”
Ayana Manasova, Chairperson
Germany
Aibek Baisakalov, Expert Analyst
WHU - Otto Beisheim School of Management, Vallendar
Ralf Fendel, Professor of Monetary Economics Korea, Republic of
Michael Frenkel, Professor, Chair of Macroeconomics College of Business School, Korea Advanced Institute of
and International Economics Science and Technology – KAIST
Ingoo Han, Senior Associate Dean and Professor
Hong Kong SAR
Ravi Kumar, Dean and Professor
Hong Kong General Chamber of Commerce
Youjin Sung, Manager, Exchange Programme
David O’Rear, Chief Economist
Kuwait
Federation of Hong Kong Industries Economics Department, Kuwait University
Alexandra Poon, Director Abdullah Alsalman, Assistant Professor
Mohammed El-Sakka, Professor
The Chinese General Chamber of Commerce Reyadh Faras, Assistant Professor
Hungary Malaysia
KOPINT-TÁRKI Economic Research Ltd. Institute of Strategic and International Studies (ISIS)
Ágnes Nagy, Project Manager Tan Sri Mohamed Jawhar Hassan, Chairman and
Éva Palócz, Chief Executive Officer Chief Executive Officer
Mahani Zainal Abidin, Director-General
India
Steven C.M. Wong, Assistant Director-General
Confederation of Indian Industry (CII)
Chandrajit Banerjee, Director General
Malaysia Productivity Corporation (MPC)
Tarun Das, Chief Mentor
Dato’ Nik Zainiah Nik Abd. Rahman, Director General
Virendra Gupta, Head, International and Trade Fairs
Lee Saw Hoon, Senior Director
364
Indonesia
Mexico
Center for Industry, SME & Business Competition Studies,
Center for Intellectual Capital and Competitiveness
University of Trisakti
Erika Ruiz Manzur, Executive Director
Tulus Tambunan, Professor and Director
René Villarreal Arrambide, President and Chief Executive Officer
Ireland Jesús Zurita González, General Director
Competitiveness Survey Group, Department of Economics,
University College Cork Instituto Mexicano para la Competitividad (IMCO)
Eleanor Doyle, Professor, Department of Economics Gabriela Alarcon Esteva, Economist
Niall O’Sullivan Manuel J. Molano Ruiz, Deputy General Director
Bernadette Power Roberto Newell Garcia, General Director
Partner Institutes
Pakistan Sweden
Competitiveness Support Fund Center for Strategy and Competitiveness,
Arthur Bayhan, Chief Executive Officer Stockholm School of Economics
Stephen Manuel, Manager Media & Communication Christian Ketels, Senior Research Fellow
Imran Naeem Ahmad, Communication Specialist Örjan Sölvell, Professor
Panama Switzerland
INCAE Business School, Latin American Center for University of St. Gallen, Executive School of Management,
Competitiveness and Sustainable Development (CLACDS) Technology and Law (ES-HSG)
Arturo Condo, Rector Franz Jaeger, Professor
Lawrence Pratt, Director, CLACDS Beat Bechtold, Project Manager
Luis Reyes, Project Manager, CLACDS
Thailand
Marlene de Estrella, Director of External Relations
Sasin Graduate Institute of Business Administration,
Peru Chulalongkorn University
Centro de Desarrollo Industrial (CDI), Sociedad Nacional Pongsak Hoontrakul, Senior Research Fellow
de Industrias Toemsakdi Krishnamra, Director of Sasin
Néstor Asto, Project Director Piyachart Phiromswad, Faculty of Economics
Luis Tenorio, Executive Director
Thailand Development Research Institute (TDRI)
Philippines
Somchai Jitsuchon, Research Director
Makati Business Club
Chalongphob Sussangkarn, Distinguished Fellow
Alberto A. Lim, Executive Director
Yos Vajragupta, Senior Researcher
Michael B. Mundo, Chief Economist
Mark P. Opulencia, Deputy Director Turkey
TUSIAD Sabanci University Competitiveness Forum
Poland
Dilek Cetindamar, Director and Professor
The Economic Institute, The National Bank of Poland
Funda Kalemci, Project Specialist
Mateusz Pipien, Director
Zbigniew Zólkiewski, Deputy Director Ukraine
Piotr Boguszewski, Advisor CASE Ukraine, Center for Social and Economic Research
Dmytro Boyarchuk, Executive Director
Management Observatory Vladimir Dubrovskiy, Leading Economist
Monika Nowacka, Projects Director
United Arab Emirates
Ireneusz Tomczak, Chairman of the Board
Economic & Policy Research Unit (EPRU), Zayed University
Warsaw School of Economics
Nico Vellinga, Professor 365
Bogdan Radomski, Associate Professor
Dubai Competitiveness Council
Russian Federation Adel Alfalasi, Executive Director
Bauman Innovation Khawla Belqazi, Special Projects Manager
Alexei Prazdnitchnykh, Principal, Associate Professor
United Kingdom
Katerina Marandi, Consultant
LSE Enterprise Ltd, London School of Economics
and Political Science
Stockholm School of Economics, Russia
Adam Austerfield, Project Director
Igor Dukeov, Area Principal
Jane Lac, Project Coordinator
Carl F. Fey, Associate Dean of Research
Robyn Klingler, Graduate Researcher
Saudi Arabia
Venezuela
National Competitiveness Center (NCC)
CONAPRI - Venezuelan Council for Investment Promotion
Awwad Al-Awwad, Deputy Governor for Investment
Gladis Genua, Executive Director
Khaldon Mahasen, Manager, Investment Performance Assessment
Litsay Guerrero, Manager, Economic Affairs
Singapore
Vietnam
Economic Development Board
Central Institute for Economic Management (CIEM)
Lim Hong Khiang, Director Planning 2
Dinh Van An, President
Chua Kia Chee, Head, Research and Statistics Unit
Phan Thanh Ha, Deputy Director, Department of
Cheng Wai San, Head, Planning
Macroeconomic Management
Slovak Republic Pham Hoang Ha, Senior Researcher, Department of
Business Alliance of Slovakia (PAS) Macroeconomic Management
Robert Kicina, Executive Director
Martin Toth, Researcher Institute for Development Studies in HCMC (HIDS)
Nguyen Trong Hoa, Professor and President
South Africa
Du Phuoc Tan, Head of Department
Business Leadership South Africa
Trieu Thanh Son, Researcher
Friede Dowie, Director
Michael Spicer, Chief Executive Officer
Spain
IESE Business School, International Center for Competitiveness
Antoni Subirà, Professor
María Luisa Blázquez, Research Associate
Alessandro Cembalo, Research Assistant
Part 2.r2 10/14/09 3:32 PM Page 366
fdr.cover.mech.r2 10/14/09 2:15 PM Page 1
The importance of financial systems as a key factor in economic growth has become
even more pronounced in recent years, yet there is still surprisingly little agreement
about how to define and measure their development. To address this gap, the World
Economic Forum has undertaken an ongoing initiative that aims to provide business
The Financial Development Report 2009, the second edition since its first publication in
2008, measures and analyzes the factors enabling the development of financial systems
in 55 economies. The Report aims to provide a comprehensive means for countries to
benchmark the various aspects of their financial systems and establish priorities for
improvement. It is published annually so that countries can continue to benchmark
themselves and track their progress over time.
The Report presents the rankings of the second Financial Development Index (FDI)
developed by the World Economic Forum in collaboration with the academic community,
multilateral organizations, and business leaders. The FDI assembles a vast amount of
data to create a holistic assessment of the different aspects of complex financial
systems, including the institutional environment, the business environment, financial
stability, banks, capital markets, and overall capital availability and access. Essay
contributions elaborate on specific effects of the current crisis on emerging markets
and on the achievement of the Millennium Development Goals. The Report contains
detailed profiles for the 55 economies covered by the FDI this year. Data used in the
calculation of the Index are fully annotated and clearly presented.
Written in a nontechnical language and style, the Report appeals to a large audience of
policymakers, business leaders, academics, and different organizations of civil society. It
2009
aims to provide policymakers with a balanced perspective as to which aspects of their
country’s financial system are most important and the ability to empirically calibrate this
view relative to other countries.
The Financial
Development Report
ISBN-13: 978-92-95044-27-2