April 1998 Asian countries should consider the benefits of opening their financial service sectors more quickly-at the same time that they are liberalizing capital accounts and deregulating domestic financial markets. The internationalization of financial services-eliminating discrimination between the treatment of foreign and domestic providers of financial services and removing barriers to the cross-border provision of financial services-is of global interest, especially in Asia. Most of Asia limits the entry of foreign financial firms much more than otherwise comparable countries do. Empirical evidence for Asia and elsewhere suggests that this slows down institutional development and that, as a result, it costs more to provide financial services. Asian countries could benefit from accelerating the opening of the financial services sector, in conjunction with the further liberalization of capital accounts and domestic deregulation of financial markets. Apart from other benefits, internationalization helps build more robust, efficient financial systems by introducing international practices and standards; by improving the quality, efficiency, and breadth of financial services; and by allowing more stable sources of funds. The ongoing WTO negotiation of financial services under GATS gives countries the opportunity to commit to opening their financial sectors. Safeguards can be built into the process, and the liberalization can be phased in gradually. This paper-a product of the Economic Policy Division, Poverty Reduction and Economic Management Network-is part of a larger effort in the network to study financial reform in developing countries. The paper was written during the summer of 1997, before the East Asia financial crisis and before the conclusion of the WTO negotiations in December 1997.

The internationalization of financial services is an important issue for the strengthening and liberalizing of financial systems in developing countries. There has been considerable support for the view that internationalization can assist countries

IFC Technical Paper No. 3. Inflation plagues many of the developing countries in which the International Finance Corporation (IFC) operates. To date, however, little is known about the impact of inflation on the financial statements of firms in developing countries. The authors of this study have developed a simple algorithm, based on the method of inflation accounting used in Brazil, and have applied it to the accounts of listed companies in Turkey for the period 1982-90. The paper documents an inflation-induced bias in financial statements and introduces a methodology for adjusting corporate financial statements for inflation effects.

A Brookings Institution Press, the World Bank, and the International Monetary Fund publication The extensive reforms and liberalization of financial services in emerging markets worldwide call for cutting-edge strategies to capture the benefits of new investment opportunities. In Open Doors, a volume of papers from the third annual Financial Markets and Development conference, multidisciplinary financial sector experts analyze current economic and political trends and prescribe practical advice to the financial development community. The book addresses the key issues of concern regarding the emerging markets, including the trends, motivations, and scope of FDI in finance; policy options that will best capture the opportunities of foreign entry; and the role of foreign institutions in e-finance innovation. The authors focus on specific topics such as foreign participation in emerging market banking systems and securities industries, WTO policies and enforcement, the role of foreign banks, liberalization of insurance markets, the need for capital markets, and the policy, regulatory, and legal issues associated with e-finance. For policymakers and financial practitioners affected by the WTO's Financial Services Agreement, this timely book should be of particular interest. Contributors include Donald Mathieson (International Money Fund), Pierre Sauvé (Trade Directorate, OECD), George J. Vojta (formerly with Bankers Trust and Citibank), Harold D. Skipper (J. Mack Robinson College of Business, Georgia State University), Benn Steil (Council on Foreign Relations), Morris Goldstein and Edward M. Graham (Institute for International Economics), Nicolas Lardy (Brookings Institution), Phillip Turner (Bank of International Settlements), and Robert Ledig (Fried, Frank, Shriver & Jacobson).

Rapid globalisation has brought substantial benefits to developing Asia, but it has also heightened the risks associated with policy mistakes, weak financial institutions, and problems in corporate and public governance. The 1997 Asian crisis has ...

In light of the Asian financial crisis of 1997, Lai examines whether East Asian economies converged onto the liberal market model by studying the evolution of the financial sectors of Korea, Malaysia and Thailand. This includes sectoral diversification, the nature of competition, and the regulatory and supervisory frameworks.

This study analyzes the key issues and constraints -- in terms of efficiency, access and safety and soundness -- faced by East Asian countries in developing their financial markets which are at different stages of development, drawing on global experience. The study takes stock of the initiatives being undertaken at the regional level to foster greater financial integration as a means of deepening and diversifying financial markets, and on the policy issues that need to be addressed at the domestic level to deepen and diversify financial markets and to actually benefit from the actions that are being taken at the regional level.

This book demonstrates some of the pitfalls associated with services liberalisation but recommends perseverance and even acceleration of the reforms. Contributors call for orderly and rapid progress towards regional integration of the services ...

This comprehensive Research Handbook provides an in-depth analysis of the different financial law approaches, legal systems and trends throughout Asia. It considers how reforms following the crises have been critical for the development and growth of the region and explores a broad range of post-crisis financial regulatory issues. This timely book also examines how inconsistent and divergent approaches to financial market regulation are curtailing the region’s potential.