Endnotes

1 Zysman (1983).

2 Allen and Gale (2000).

3 Goldsmith (1969).

4 Demirguc-Kunt and Levine (2001).

5 See BIS (2002), box 2, for a discussion on “why equity markets may exist where bond markets fail to thrive.”

6 See Herring and Chatusripitak (2000), esp. pp. 14-24.

7 Hausler et al (2003).

8 See, for example, ESCAP (1998); Kim (2001); Yoshitomi and Shirai (2001).

9 Dowers and Masci (2003).

10 See, for example, United Nations (1999); BIS (2002); Dowers and Masci (2003); Litan, Pomerleano, and Sundararajan (2003).

11 On the relationship between banks and the capital markets, see Hawkins (2002).

12 There are very significant data problems in this kind of exercise, so the numbers should be taken as approximations, although I believe that the trends are accurate. Different sources produce different figures for the same variables, and the same source can even produce different estimates in different publications! Problems also arise since the data are aggregated in U.S. dollars, which introduces distortions in GDP figures due to exchange rate variations.

13 Based on data calculated from IMF (2003, pp. 75-78).

14 Data are from BIS Website.

15 Of course, China is by far the largest economy in the Asian region. It is not included for two main reasons. On the one hand, there are very serious data problems for China. On the other hand, including China in weighted averages would overwhelm the rest of the Asian region, making comparisons with Latin America quite difficult.

16 Some public-sector firms have also listed a part of their shares on local stock markets.

17 The fifth country is Argentina, which had a relatively high turnover earlier, but was in the midst of a severe financial crisis by 2001.

18 Clarke et al (2001); Crystal, Dages, and Goldberg (2001); Litan, Masson, and Pomerleano (2001); Montgomery (2003).

19 World Bank (2001).

20 Indeed, there is evidence of financial markets becoming overly exuberant in good times, with finance being offered to risky borrowers who would not be able to get it in “normal” times.

21 On the East Asian Miracle, see World Bank (1993); critiques include Amsden (1994) and Fishlow (1994).

22 For example, after financial liberalization, Asia’s banks lacked the skills to carry out credit analysis of potential borrowers, and they experienced great difficulty in pressing delinquent clients to service their debts.

23 On the role of regional development patterns, see Stallings (1995).

24 Some of these same steps were taken in Chile, the only Latin American country that pushed capital markets in a major way.

25 Reuters, June 22, 2003; see general discussion in Rajan (2003).

26 Park (2002).

27 For an analysis of the impact of the pension reforms on the capital markets, see Uthoff (2001).

28 A recent analysis of these problems can be found in Ffrench-Davis and Griffith-Jones (2003).

29 On the recent literature that finds a strong link between finance and growth, see Levine (1997); Levine, Loayza, and Beck (2001); and Wachtel (2001); for a critique, see Favara (2003).

30 Data are from the BIS Website.

31 For example, see Stallings (2003) on the growing similarities between the financial sectors in Chile and South Korea.

32 An excellent recent collection of articles pertaining to capital markets in emerging economies and the policy issues involved is Litan, Pomerleano, and Sundararajan (2003).

33 See, for example, Bergsten and Park (2002); Henning (2002); for the views of he architect of the proposed AMF, see Sakakibara (2002).

34 Ghymers (2001).

35 On Chilean capital controls, see Agosin and Ffrench-Davis (2001). For a critique, see De Gregorio, Edwards, and Valdes (2000).