3. Sustaining Financial Development in Emerging Europe
Author:
International Monetary Fund. European Dept.
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Language:
English
Print Publication Date:
15 Nov 2007
Keywords:
REO; market; economy; financial system; Europe's financial systems; market liquidity; bank credit; term structure; EU integration process; government securities market; Financial sector development; Securities; Stock markets; Europe

Abstract

Financial development has advanced to varying degrees in emerging Europe. Macroeconomic stability and good institutional quality and law enforceability appear to have been key forces. Building on recent progress, further reforms are needed to complete the establishment of deep, liquid, diversified, and stable financial markets. This will yield benefits in terms of efficiency, risk diversification, and resilience in the face of possibly volatile external capital flows. Going forward, the EU integration process is likely to drive reforms in EU members. In non-EU emerging economies, the focus should be on reinforcing the foundations of financial development, including the rule of law, creating a well-functioning government securities market, establishing stronger corporate governance and creditor rights protection, and promoting a favorable environment for the emergence of institutional investors. Reforms need to be tailored to specific country circumstances as illustrated in the boxes presented in this chapter.

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Cover Regional Economic Outlook, November 2007, Europe
Regional Economic Outlook, November 2007, Europe
Strengthening Financial Systems
ISBN:
9781589066748
ISSN:
2071-4157
Publication Date:
15 Nov 2007
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781589066748.086
Pages:
73

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