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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
The Financial Development Report 2009
Economic Forum has undertaken an ongoing initiative that aims to provide business leaders and policymakers with a common framework to identify and discuss the drivers of the development of global financial systems and markets.
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
The Financial Development Report
country’s financial system are most important and the ability to empirically calibrate this view relative to other countries.
ISBN-13: 978-92-95044-27-2
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World Economic Forum Geneva, Switzerland
World Economic Forum USA Inc. New York, USA
The Financial Development Report 2009
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The terms country and nation as used in this report do not in all cases refer to a territorial entity that is a state as understood by international law and practice. The terms cover well-defined, geographically selfcontained economic areas that may not be states but for which statistical data are maintained on a separate and independent basis.
World Economic Forum USA Inc. Copyright Š 2009 by the World Economic Forum USA Inc. All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, or otherwise without the prior permission of the World Economic Forum. ISBN-10: 92-95044-27-4 ISBN-13: 978-92-95044-27-2 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. A catalogue record for this book is available from the British Library. A catalogue record for this book is available from the Library of Congress.
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Contents
Contributors
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Part 2: Country/Economy Profiles
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How to Read the Country/Economy Profiles ..............................49
Academic Advisors
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List of Countries/Economies ........................................................51 Country/Economy Profiles............................................................52
Preface
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by Klaus Schwab
Foreword
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by Kevin Steinberg
Part 3: Data Tables
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How to Read the Data Tables ...................................................275 Index of Data Tables...................................................................277
Executive Summary
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Data Tables.................................................................................279
by Nouriel Roubini and James Bilodeau
Part 1: Findings from the Financial Development Index
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1.1 The Financial Development Index: Taking Stock of Financial System Strength in a Time of Crisis
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by Nouriel Roubini and James Bilodeau
1.2 This Time It’s Different: Transmission of the Global Financial Crisis to Emerging Market Economies and the Domestic and International Policy Response
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by Nouriel Roubini and Ayah El Said
1.3 Financial Development, Financial Crises, and the Millennium Development Goals by Erik Feyen
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Technical Notes and Sources
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About the Authors
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Partner Institutes
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Contributors
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Contributors
LEAD ACADEMIC AND CO-AUTHOR Nouriel Roubini Professor of Economics and International Business, New York University and Chairman, RGE Monitor EDITOR AND CO-AUTHOR James Bilodeau Associate Director and Head of Emerging Markets Finance World Economic Forum USA
STEERING COMMITTEE* Sir David Wright Vice-Chairman, Barclays Capital Yasser El Mallawany Chief Executive Officer, EFG-Hermes Andrew Crockett President, JPMorgan Chase International Peter Sands Group Chief Executive, Standard Chartered Bank
PROJECT TEAM Ibiye Harry Project Associate, World Economic Forum USA
Kevin Steinberg Chief Operating Officer, World Economic Forum USA
Ayah El Said Economist, RGE Monitor
OPERATING COMMITTEE* Michael Drexler Head of Strategy and Planning, Barclays Capital
Toopan Bagchi Project Manager, World Economic Forum USA (on secondment from McKinsey & Co.) PROJECT ADVISORS Margareta Drzeniek Hanouz Director, Senior Economist, World Economic Forum Thierry Geiger Associate Director, Economist, Global Leadership Fellow, World Economic Forum CONTRIBUTOR Erik Feyen, The World Bank
Nick O’Donohoe Global Head of Research, JPMorgan Chase Gerard Lyons Chief Economist and Group Head of Research, Standard Chartered Bank Andrei Sharonov Managing Director, Troika Dialog Wael Ziada Head of Research, EFG-Hermes
We would like to thank Dealogic and Thomson Reuters for their generous contribution of data for this Report.
FROM THE WORLD ECONOMIC FORUM Financial Institutions Team Kevin Steinberg, Chief Operating Officer and Head of the Centre for Global Industries (New York), World Economic Forum USA† Max von Bismarck, Director and Head of Investors Industry† Giancarlo Bruno, Director and Head of Financial Services Industry† Anuradha Gurung, Associate Director† Trudy Di Pippo, Associate Director† Kerry Wellman, Senior Community Manager† Abel Lee, Senior Community Manager† Lisa Donegan, Community Manager† Tom Watson, Project Manager† Isabella Reuttner, Project Manager† Nadia Guillot, Senior Coordinator Michal Richardson, Coordinator† Takae Ishizuka, Coordinator† Elisabeth Bremer, Coordinator†
Global Competitiveness Network Jennifer Blanke, Director, Senior Economist, Head of Global Competitiveness Network Margareta Drzeniek Hanouz, Director, Senior Economist Irene Mia, Director, Senior Economist Thierry Geiger, Associate Director, Economist, Global Leadership Fellow Ciara Browne, Associate Director Pearl Samandari, Community Manager Eva Trujillo Herrera, Research Assistant Carissa Sahli, Coordinator We thank Hope Steele for her superb editing work and Neil Weinberg for his excellent graphic design and layout.
* 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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Academic Advisors
Academic Advisors
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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 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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Preface
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Preface KLAUS SCHWAB Executive Chairman, World Economic Forum
In the time since the first Financial Development Report was published, global leaders have mounted an unprecedented response to a financial crisis, the effects of which have rippled across all regions and levels of society.The urgency of the threat to the global economy and our collective prosperity has required pragmatic and at times inventive responses that transcended the conventions of recent history. Now, with the publication of this, the second Financial Development Report, as leaders take stock of the efficacy of their actions, thoughts turn to the implications of this crisis, to the assumptions on which our global financial system is based, and to the legacy of this response. As with past crises and episodes of dramatic change, decisions made now have the potential to impact generations to come. New models for global governance and cooperation are needed that are commensurate with the realities of increasing financial integration and economic interdependence. As dialogue and consensus develop on new models for global financial governance, it is vital to bring a balanced and rich perspective to bear on these decisions. It is in this spirit that the World Economic Forum offers this year’s Financial Development Report as a transparent, analytical tool to help promote richness of dialogue and comprehensiveness of debate. It is not only the more visible decisions at the global level that matter but also those taken at the regional and local levels, which have the potential to build stronger financial systems that help extend prosperity to all. The Financial Development Report, in providing a depth of information across a number of economies, serves to 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 figures, 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
which the Report is based. Other complementary publications from the World Economic Forum include The Global Competitiveness Report,The Global Enabling Trade Report,The Global Gender Gap Report,The Global Information Technology Report, and The Travel & Tourism Competitiveness Report. We would like to express our gratitude to the lead academic on the project, Nouriel Roubini of New York University, for his thought leadership in the design of the Financial Development Index and contributions to this Report. We are grateful to our industry partners who served on the project Steering and Operating Committees, including Barclays Capital, EFG-Hermes, JP Morgan Chase & Co., Standard Chartered Bank, and Troika Dialog Group.We are appreciative of our academic advisors who generously contributed their time and ideas in helping shape this Report. We would also like to thank James Bilodeau at the World Economic Forum USA, editor and co-author of the Report, for his energy and commitment to the project, as well as the other members of the project team, including Ibiye Harry, Ayah El Said, and Toopan Bagchi.We are grateful to Margareta Drzeniek Hanouz and Thierry Geiger for their guidance as Project Advisors. Appreciation also goes to the Global Competitiveness Team, including Jennifer Blanke, Irene Mia, Ciara Browne, Pearl Samandari, Eva Trujillo Herrera, and Carissa Sahli. Finally, we would like to thank our network of Partner Institutes, without whose enthusiasm and hard work the annual administration of the Executive Opinion Survey and this Report would not be possible.
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Foreword
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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 Financial Development Report 2009, the second edition since its inaugural publication last year.The Report represents a key initiative undertaken as part of the Forum’s Industry Partnership Programme for Financial Services. The Programme provides a platform for CEOs and senior executives to engage with their peers and an extended community of academics, leaders from government, and experts from civil society to tackle key issues on the global agenda. Certainly, the ongoing financial crisis ranks as one of the most pressing issues to confront the global community in generations.
Implications of the financial crisis The current crisis has revealed the extent of global interconnectedness, exposing an underappreciated set of linkages between players as diverse as homeowners in the United States, asset-backed securities traders in London, manufacturing firms in Asia, and agricultural exporters in Latin America. Now a variety of stakeholders across many national and international platforms are 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 poses a breadth of questions that must be considered by these different stakeholders as well. It is our hope that the dimensions captured by the Financial Development Index will inform this view and serve as a valuable tool for those most closely involved in the reform process to address both short- and long-term considerations. For regulators with macroprudential oversight, how do they ensure that they have adequately addressed elements of systemic risk without undermining the vital role that financial development plays as a driver of economic growth? Will proposed solutions adversely impact the development of robust and sizeable financial intermediaries? A key challenge is to balance careful regulatory oversight while promoting innovation and entrepreneurship. As indicated by some results within the Index, countries with a high degree of stability do not necessarily have deep and active financial intermediation that has been correlated with economic growth. Ongoing economic development may therefore depend on being able to promote both simultaneously. For financial intermediaries, the need to consider systemic issues in their investment and operational
decisions was highlighted in the current crisis. As financial services firms weigh where to base and then manage their operations in different regions, what are the elements that should be considered? How should they think about the different risks and tradeoffs associated with different operating environments? The stability of financial systems must certainly be a central factor, but effective corporate governance, robust legal regimes promoting contract enforcement, availability of human capital, and other factors are also critical to nurturing competitive and resilient financial systems. For policymakers charged with the overall economic welfare of the broader population, how do they ensure that the financial system serves all constituencies, including those that are less privileged? The measures of financial access we capture in the Index illustrate that even while large corporations may have relatively easy availability of capital in particular markets, small enterprises and individuals in the same countries may not. Governments need to be quite nuanced in their approaches to ensure that financial markets can support innovation and growth at all levels of society.
The Financial Development Report 2009 In light of these far-reaching questions, this year’s Report strives to move beyond an updated Index to a broader examination of the global impact of the crisis on financial development. Part 1: Findings from the Financial Development Index, begins with Chapter 1.1 outlining the methodology for the Index, the academic theory and assumptions supporting it, and some of the key findings from the Index results. Chapters 1.2 and 1.3, which complete Part 1, include some thoughtful contributions to provide context on how the current crisis has impacted both emerging economies and, more specifically, the achievement of the Millennium Development Goals.The effects of the crisis on several emerging markets have been tempered by the sound macroeconomic policy and external conditions of recent years. However, the effects of financial crises do in general tend to fall disproportionately upon the poor. It is therefore important for countries to craft policy responses with these effects in mind. We encourage readers to delve into the detail of Part 2: Country/Economy Profiles and Part 3: Data Tables of the Report. In light of the complexity of
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financial systems and of the current problems we face, the richness and breadth of the data paint a balanced picture of the challenges and opportunities faced by different countries. By design, this Report necessarily relies on available data to proxy for key elements of financial development. It is with a degree of humility that we put forth this Report given some of the inherent limitations of these data, the rapidly changing environment, and the unique circumstances of some the economies covered.Yet, in its attempt to establish a comprehensive framework and a means for benchmarking, we feel it provides a useful starting point from which to ensure a rich and broad perspective at this critical juncture.
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. 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.
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Executive Summary
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Executive Summary NOURIEL ROUBINI, New York University and RGE Monitor JAMES BILODEAU, World Economic Forum USA
The Financial Development Report and the Financial Development Index (FDI) on which it is based provide a score and rank for 55 countries according to the level of their financial development. It analyzes the drivers of financial system development that support economic growth in developed and developing countries to serve as a tool for countries to benchmark themselves and prioritize areas for reform. The Report defines financial development as the factors, policies, and institutions that lead to effective financial intermediation and markets, as well as deep and broad access to capital and financial services. In accordance with this definition, measures of financial development are captured across seven pillars: 1. 2. 3. 4. 5. 6. 7.
Institutional environment Business environment Financial stability Banking financial services Non-banking financial services Financial markets Financial access
Financial stability is thus an important component of the FDI, but a breadth of additional factors is also considered in this assessment of the long-term development of financial systems. Although some refinements were made to this year’s FDI, a high-level comparison with last year’s Index seems to indicate some general trends: • The world’s largest economies exhibited the largest drop in absolute scores as compared with last year. The size and global nature of these economies may have led to greater exposure to the current financial turmoil, as captured in some of the more recent data in this year’s FDI. • While the United Kingdom came in 1st and the United States came in 3rd, both experienced a sharp drop in their overall scores that significantly decreased the margin with which they lead other countries in the Index. Financial instability weighed heavily on both, a factor that was offset by strength in some measures of financial intermediation.
• At second place, Australia showed considerable strength in the rankings. Canada, the smallest of the G-8 countries (by GDP), and countries that are smaller than it fared better in this year’s Index, comprising 7 out of the top 10 in overall rank. These include Australia (2nd), Singapore (4th), Hong Kong SAR (5th), Canada (6th), Switzerland (7th), the Netherlands (8th), and Denmark (10th).
Table 1: Top 10 in overall Index ranking
Economy
United Kingdom Australia United States Singapore Hong Kong SAR Canada Switzerland Netherlands Japan Denmark
2009 rank (1 to 55)
2008 rank (1 to 55)
1 2 3 4 5 6 7 8 9 10
2 11 1 10 8 5 7 9 4 n/a
2009 Change score in score (1 to 7) (2009 vs. 2008)
5.28 5.13 5.12 5.03 4.97 4.96 4.91 4.85 4.64 4.64
–0.55 0.15 –0.73 –0.12 –0.26 –0.3 –0.32 –0.37 –0.64 n/a
Note: Some refinements have been made to this year's Index that may affect comparability with the previous year's results.
This year’s FDI also illustrates some interesting findings with respect to developing countries: • Within the FDI’s financial stability pillar, a number of developing countries—such as Brazil, Chile, and Malaysia—achieve strong scores. • A comparison of commercial financial access and retail financial access measures illustrate that larger enterprises in developing countries appear to enjoy access to financial services (such as equity offerings and private credit) that rivals access seen in developed countries. • However, developing countries did not score nearly as well in terms of retail financial services provided to individuals (such as savings and demand accounts, micro credit, and point-of-sale financial services) despite the importance of these agents to the economies of many developing countries.
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Table 2: Top 20 in the financial stability pillar 2009 rank
Economy
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Norway Switzerland Hong Kong SAR Chile Singapore Saudi Arabia Canada Kuwait Australia Germany Finland France Malaysia Mexico Brazil Czech Republic United Arab Emirates Sweden Denmark Slovak Republic
Score
5.73 5.66 5.63 5.62 5.61 5.60 5.57 5.49 5.48 5.34 5.27 5.27 5.14 5.13 5.13 5.08 5.07 5.07 4.99 4.92
There is necessarily a lag in some of the data used to calculate the FDI, so it is important not to view it as having captured the full effects of the current financial crisis. As successive iterations of the Report are published, the long-term effects of the crisis on financial system development will become increasingly clear. The findings with respect to specific countries and variables covered in this Report can be found in the country profiles and data tables contained in Parts 2 and 3.
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Part 1 Findings from the Financial Development Index
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CHAPTER 1.1
The Financial Development Index: Taking Stock of Financial System Strength in a Time of Crisis NOURIEL ROUBINI, New York University and RGE Monitor JAMES BILODEAU, World Economic Forum USA
The global financial crisis that has unfolded over the past 18 months has underlined the central role that financial systems play in the economic development of countries. In particular, the importance of financial stability as a key aspect of financial systems that has implications extending well beyond a country’s border and deep into the real economy has been made painfully clear.The sheer scale of the response required by policymakers to avert a deepening of the crisis has led countries to rethink the mechanisms for governance and oversight of financial systems at the global and local levels. As countries continue to examine their response to the current crisis to minimize the possibility of similar occurrences in the future, as well as to ensure the efficacy of their actions, it is crucial to take a longer-term perspective on the role and nature of financial systems. Specifically, it is imperative to consider all the different factors that are important in facilitating the central role of financial systems in furthering economic prosperity for all participants in the global economy. Empirical studies concerning financial development and growth have generally found that cross-country differences in the levels of financial development explain a considerable portion of the cross-country differences in growth rates of economies.1 It is against this backdrop that the second annual Financial Development Report aims to provide policymakers with a common framework to identify and discuss this range of factors that are central to the development of global financial systems and markets. It provides the Financial Development Index (FDI), which ranks 55 of the world’s leading financial systems against which countries can benchmark themselves and with which they can establish priorities for financial system improvement. The Financial Development Report is published annually so that countries can continue to benchmark themselves against their peers and track their progress over time. In recognition of the diversity of countries covered in the FDI and the variety of financial activities that are vital to economic growth, the FDI provides a holistic view of financial systems. For the purposes of this Report and the FDI we have defined financial development as the factors, policies, and institutions that lead to effective financial intermediation and markets, as well as deep and broad access to capital and financial services. This definition thus spans the foundational supports of a financial system, including the institutional and business environments; the financial intermediaries and markets through which efficient risk diversification and capital allocation occur; and the results of this financial intermediation process, which include the availability of, and access to, capital. The FDI relies upon current academic research in both selecting the factors that are included and in determining its overall structure.This encompasses a variety
The authors would especially like to thank Ibiye Harry for her extensive contributions to this chapter and Report.
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of measures intended to capture different dimensions of financial stability that have been highlighted in the current crisis. However, consistent with its purpose of supporting the long-term development of financial systems and their central role in economic growth, it also encourages a broad analysis over a theoretical focus on a few specific areas.With this holistic view, decision makers can develop a balanced perspective as to which aspects of their country’s financial system are most important and empirically calibrate this view relative to other countries.
Financial development and economic growth A large body of economic literature supports the premise that, in addition to many other important factors, the performance and long-run economic growth and welfare of a country are related to its degree of financial development. Financial development is measured by factors such as size, depth, access, and the efficiency and stability of a financial system, which includes its markets, intermediaries, range of assets, institutions, and regulations. The higher the degree of financial development, the wider the availability of financial services that allow the diversification of risks.This increases the long-run growth trajectory of a country and ultimately improves the welfare and prosperity of producers and consumers that have access to financial services.The link between financial development and economic growth can be 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 established in terms of empirical evidence.3 The current environment has highlighted the potentially severe impact that financial crises can have on economies, and in particular on those with fewer resources with which to deal with financial adversity (see Box 1).4 Yet research supports the idea that countries that have experienced occasional financial crises have, on average, demonstrated higher economic growth than countries that have exhibited more stable financial conditions.5 Thus, although it is important to mitigate the short-term impact of crises, it is also important to view financial development in terms inclusive of, but broader than, financial stability. Economic theory suggests that financial markets and intermediaries exist mainly because of two types of market frictions: information costs and transaction costs. These frictions lead to the development of financial intermediaries and financial markets, which perform multiple functions, such as facilitating the trading, hedging, diversification, and pooling of risk; providing insurance services; allocating savings and resources to the appropriate investment projects; monitoring managers and promoting corporate control and governance; mobilizing savings efficiently; and facilitating the exchange of goods and services.
Financial intermediation and financial markets contribute directly to increased economic growth and aggregate economic welfare through their effect on capital accumulation (the rate of investment) and on technological innovation. First, greater financial development leads to greater mobilization of savings and its allocation to the highest-return investment projects.This increased accumulation of capital enhances economic growth. Second, by appropriately allocating capital to the right investment projects and promoting sound corporate governance, financial development increases the rate of technological innovation and productivity growth, further enhancing economic growth and welfare. Financial markets and intermediation benefit consumers and firms in many other ways that are not directly related to economic growth. Access to financial markets for consumers and producers can reduce poverty, such as when the poor have access to banking services and credit.The importance of microfinance can be seen in this context.This access allows consumers to smooth consumption over time by borrowing and/or lending and stabilizes consumer welfare in the presence of temporary shocks to wages and income. By contributing to the diversification of savings and of portfolio choices, it can also increase the return on savings and ensure higher income and consumption opportunities. Insurance services can help mitigate a variety of risks that individuals and firms face, thus allowing better risk sharing of individual or even macroeconomic risks.
The seven pillars of financial development To understand and measure the degree of financial development, one must consider all of the different factors that together contribute to the degree of depth and efficiency of the provision of financial services. Conceptually, in thinking about an index that measures the degree of financial development, the various aspects of development can be seen as seven “pillars� grouped into three broad categories, as indicated in Figure 1: 1. Factors, policies, and institutions: the foundational characteristics that allow the development of financial intermediaries, markets, instruments, and services. 2. Financial intermediation: the variety, size, depth, and efficiency of the financial intermediaries and markets that provide financial services. 3. Financial access: access by individuals and businesses to different forms of capital and financial services. The seven pillars are organized and described below according to these three categories. (See Appendix A for the detailed structure of the FDI and a list of all indicators).
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Figure 1: Composition of the Financial Development Index
Financial Development Index
Factors, policies, and institutions
Financial intermediation
1. Institutional environment
4. Banking financial services
2. Business environment
5. Non-banking financial services
3. Financial stability
6. Financial markets
Policymakers
Financial intermediaries
Financial access
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7. Financial access
End users of capital
Source: World Economic Forum
5 Factors, policies, and institutions This first category covers those foundational features that support financial intermediation and the optimal provision of financial services and includes the first three of the seven pillars: the institutional environment, the business environment, and the degree of financial stability. First pillar: Institutional environment
The institutional environment encompasses the laws and regulations that allow the development of deep and efficient financial intermediaries, markets, and services as well as the macroprudential oversight of financial systems.This includes the overall laws, regulations, and supervision of the financial sector, as well as the quality of contract enforcement and corporate governance. Economic theory proposes that a strong institutional environment exists to alleviate information and transaction costs.6 Much empirical work has tackled issues related to the importance of institutions and their impact on economic activity in general.The presence of legal institutions that safeguard the interests of investors is an integral part of financial development.7 Reforms that bolster a country’s legal environment and investor protection are likely to contribute to a more efficient financial sector.8 Accordingly, we have included variables related to the degree of judicial independence and judicial efficiency. Additionally, the current crisis has clearly emphasized the importance of regulation at the institutional level as it relates to financial stability and corresponding
effects on the real economy. Official supervisory power can be an important component of this oversight, and can include the ability to declare the insolvency of financial institutions, restructure them, and undertake prompt corrective and enforcement actions.9 The robustness of private monitoring of financial institutions—incorporating such elements as the requirements for certified auditing, the percentage of banks rated by international rating agencies, and the quality of bank accounting—is also an essential aspect of regulation.10 A measure of the effectiveness of regulation of securities exchanges is also included. Better corporate governance is believed to encourage financial development, which in turn has a positive impact on growth.11 Contract enforcement is also important because it limits the scope for default among debtors, which in turn promotes compliance.Variables capturing these measures as they relate to the formal transfer of funds from savers to investors are included in the pillar.12 Inadequate investor protection leads to a number of adverse effects, which can be detrimental to external financing and ultimately to the development of well-functioning capital markets.13 In general, inadequate enforcement of financial contracts has been found to augment the process of credit rationing, thus hindering the overall process of growth.14 Other important aspects of the institutional environment are a country’s capital account openness and domestic financial sector liberalization. Financial liberalization generally permits a greater degree of
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financial depth, which translates into greater financial intermediation among savers and investors.This in turn increases the monetization of an economy, resulting in a more efficient flow of resources.15 Empirically, however, the impact of capital account liberalization delivers mixed evidence. Several studies have asserted that capital account liberalization has no impact on growth while others have found a positive, and statistically significant, impact.16 At the same time, other work asserts that the relationship is undetermined. Given such ambiguity over the impact of capital account openness, it is best examined within the context of the legal environment.The better a country’s legal and regulatory environment, the greater the benefits from capital account openness—and vice versa. Accordingly, within the FDI we try to capture the relationship between capital account openness and the level of legal and regulatory development and have interacted the variables used to measure each (see Appendix A).The presence of both a robust legal and regulatory system and capital account openness provides a positive indication of the financial development of a country.We have also interacted the capital account openness variable with the level of bond market development because of research that asserts the importance of developing domestic bond markets in advance of full liberalization of the capital accounts.17 Assessments of commitment to WTO trade agreements as they relate to financial services have also been included and interacted in a similar manner. A similar analysis can be extended to the degree of liberalization of the domestic financial sector.This degree of liberalization is based on whether a country exerts interest rate controls (either ceilings or floors), whether credit ceilings exist, and whether foreign currency deposits are allowed. In general, the better a country’s legal and regulatory environment, the greater the impact of domestic financial sector liberalization on a country’s economic growth.Variables representing each of these characteristics have been interacted to represent this result. Recent research supports the importance of advanced legal systems and institutions in this respect, holding that the presence of such institutions is as vital as having both a developed banking sector and equity markets.18 Second pillar: Business environment
The second pillar focuses on the business environment and considers: • the availability of human capital—that is, skilled workers who can be employed by the financial sector and thus provide efficient financial services; • the state of physical capital—that is, the physical and technological infrastructure; and
• other aspects of the business environment, including taxation policy and the costs of doing business for financial intermediaries. Measures taken to facilitate the creation and improvement of human capital have been found to assist the process of economic growth.19 Empirical evidence supports this relationship and shows positive correlations between human capital and the degree of financial development.20 Our proxies for the amount of human capital are related to the enrollment levels of tertiary education.We also include measures that reflect the quality of human capital, such as the degree of staff training, the quality of management schools and math and science education, and the availability of research and training services. Another key area is infrastructure.We capture a basic measure of the quality of physical infrastructure, which is important given its role in enhancing the process of private capital accumulation and financial depth in countries by increasing the profitability of investment.21 Our analysis of infrastructure emphasizes measures of information and communication technologies, which are particularly important to those firms operating within a financial context because of their data-intensive nature. Another integral aspect of the business environment is the cost of doing business in a country. Specifically, research has shown that the cost of doing business is a vital feature of the efficiency of financial institutions. The different costs of doing business are integral to assessing a country’s business environment as well as the type of constraints that businesses may be facing.22 As such, the better the business environment, the better the performance of financial institutions and the higher the degree of financial development.Variables that capture such costs include the World Bank’s measures of the cost of starting a business, the cost of registering property, and the cost of closing a business. Indirect or transaction costs are captured in variables such as time to start a business, time to register property, and time to close a business. Our analysis also considers taxes as another key constraint that businesses in the financial sector can face. The variables in this subpillar focus on issues related to distortionary and burdensome tax policies, reflecting clearer consensus around the importance of these issues. Because of less clarity in the academic literature around the effects of absolute rates of taxation and issues of data comparability, we have not included measures related to overall tax rates. Third pillar: Financial stability
The third pillar addresses the stability of the financial system.The severe negative impacts of financial instability on economic growth can be profoundly seen in the current financial crisis as well as pervasive past financial crises.This instability can lead to significant losses to
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investors, resulting in systemic banking crises, systemic corporate crises, currency crises, and sovereign debt crises. This pillar tries to capture the risk of three types of crises: currency crises, systemic banking crises, and sovereign debt crises. For the risk of currency crises, we include the change in real effective exchange rate, the current account balance, a dollarization vulnerability indicator, an external vulnerability indicator, external debt to GDP, and net international investment position. The external debt to GDP and net international investment position variables are specifically applied to developing and developed countries, respectively. The systemic banking crises subpillar combines measures of historic banking system instability, an assessment of aggregate balance sheet strength, and measures of the presence of “bubbles.” Historic instability is captured in a measure of the frequency of banking crises since the 1970s; more recent banking crises are given greater weight. Empirical research has shown that countries that have gone through systemic banking crises or endured a high degree of financial volatility are more susceptible to profound short-term negative impacts on the degree of financial intermediation.23 A financial strength indicator provides a measure that balances quantitative measures of balance sheet strength with qualitative assessments of banks’ abilities to meet their obligations to depositors and creditors. Capital adequacy measures, such as capital-toasset ratios, have not been included because of research that indicates the shortcoming of such measures with respect to emerging markets.24 The last type of crisis captured within the financial stability pillar is sovereign debt crisis. An important proxy for the risk of this crisis is sovereign credit ratings; these data were calculated as an average of both local currency sovereign credit ratings and foreign currency sovereign credit ratings. Sovereign ratings measure the degree to which a country is willing and able to pay its debt in a timely manner and in full.Thus, a high sovereign credit rating signifies less likelihood of default occasioned by a sovereign debt crisis. Credit default swaps provide a quantitative, market-based indicator of the ability of a country to repay its debt. Macroprudential measures such as inflation and GDP growth are also included, as these also influence the ability of countries to service their debt. The greater the risk of these crises, the greater the likelihood that the different processes of financial intermediation will be hampered, precipitating lower economic growth rates. However, these effects of financial stability on economic growth can be considered in terms of a tradeoff between risk and innovation/return. For example, a financial system that is very heavily supervised and regulated may be very stable and never spark a financial crisis. However, such a controlled system would hamper the financial development and innovation that increases returns, diversifies risks, and better allocates resources to the highest-return investments. Conversely, a financial
Box 1: Financial crises and the Millennium Development Goals (Please see Chapter 1.3 by Erik Feyen for a full discussion of this topic.) There is no doubt that financial sector development contributes to economic growth and poverty alleviation. And even though financial systems can be prone to instability, studies show that countries that have experienced occasional financial crises have, on average, grown faster than countries with stable financial conditions because they stimulated healthy risk taking by, for example, financing a small company, a farmer, or R&D activities. However, financial crises can have devastating effects on the world’s most vulnerable people. The weakest members of society are often at the highest risk of falling into a poverty trap, which can lead to long-term developmental and economic losses. The current crisis has once again demonstrated that developing countries must strengthen their safety nets and plan their crisis intervention scenarios to protect the weakest in a timely, targeted, and cost-effective manner. During normal times, both developed and developing countries with sound banking and capital markets enjoy stronger per capita income growth than countries without such markets. Research suggests that financial development results in fewer people living in poverty, since the poor indirectly benefit from economic growth through increases in employment opportunities and real wages, as well as from investment in core infrastructure. However, although the poor benefit disproportionately from financial development, they also tend to suffer disproportionately from financial crises. This occurs because they are less able than wealthier people to insulate themselves against shocks. Even a small shock can force households to sell off productive assets such as land and livestock, economize on food and healthcare, and pull their children out of school to make ends meet. Thus, financial crises can endanger progress toward attaining the Millennium Development Goals. Countries should continue to pursue policies that encourage financial development and avoid those that lead to excessive long-term intervention in systems or those that increase protectionism in the wake of a financial crisis. Wellthought-out safety nets and crisis policies would do much to mitigate the worst effects of a crisis on the poor.
system that is very free and innovative and is very lightly regulated and supervised may eventually become unstable and trigger credit booms and asset bubbles that can severely affect growth, returns, and welfare. Although there is some tradeoff between the stability of the financial system and its degree of innovation and sophistication, financial stability remains an important input in the process of financial development.
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Box 2: The effect of the global financial crisis on emerging markets (Please see Chapter 1.2 by Nouriel Roubini and Ayah El Said for a full discussion of this topic.) At the onset of the financial crisis, economic and financial fundamentals of emerging market economies were in much better shape than they had been in previous episodes of global turmoil. The relative resilience of emerging markets to external shocks was not only a result of the good policies implemented, but also the result of good luck: 2004–07 was a most favorable period of external conditions for emerging markets in a booming global economy. With the collapse of Lehman Brothers on September 15, 2008, the global financial crisis spread swiftly, and the spillover effects were felt in the emerging markets very rapidly. The crisis was seen to affect emerging markets through trade, financial, and commodity channels via the sharp drop in commodity prices. The countries with the least sound macro and financial fundamentals were affected most severely during the crisis. Policy response to the recession by international organizations occurred on a much larger scale than it had in previous crises originating in emerging markets. Better fundamentals allowed emerging markets to respond countercyclically to the crisis through domestic policy. Economic recovery in these markets is expected to be more robust than in that of advanced economies; however, the issue of financial stability will continue to be a priority for emerging markets as they become more cautious about the sequencing of financial sector liberalization, financial deepening, and financial development in general.
Excessively unstable financial systems—systems that are prone to repeated and virulent financial crises—are less likely to grow and develop. For a full discussion of the impact of the crisis on emerging market economies, see Box 2 and the following chapter by Nouriel Roubini and Ayah El Said.
Financial intermediaries and markets The second category of pillars measures the degree of development of the financial sector as seen in the different types of intermediaries.These three pillars are banking financial services, non-banking financial services (e.g., investment banks and insurance firms), and financial markets. Consensus exists on the relationship between the size and depth of the financial system and the supply and robustness of financial services that are important contributors to economic growth.25 This relationship occurs because the size of financial markets is viewed as an important determinant of savings and investment.26
The size (total financial assets within a country) of the financial system also matters because the larger it is, the greater its ability to benefit from economies of scale given the significant fixed costs prevailing in financial intermediaries’ activities. A larger financial system tends to relieve existing credit constraints.This facilitates borrowing by firms and further improves the process of savings mobilization and the channeling of savings to investors. Given that a large financial system should allocate capital efficiently and better monitor the use of funds, improved accessibility to financing will tend to amplify the resilience of an economy to shocks. Thus, a deeper (total financial assets as a percentage of GDP) financial system is an important component of financial development as it contributes to economic growth rates across countries.27 Measures of size and depth have been included in each of the three financial intermediation pillars to capture this factor. Fourth pillar: Banking financial services
Although the previous pillar captures some of the negative impacts that an unstable banking system can have on an economy, banks also play a vital role in supporting economic growth.This role is captured in the fourth pillar. Bank-based financial systems emerge to improve acquisition of financial information and to lower transaction costs, as well as to allocate credit more efficiently. This role is especially important in developing economies. The efficient allocation of capital in a financial system generally occurs through bank-based systems or marketbased financial systems.28 Some research asserts that banks finance growth more effectively and efficiently than market-based systems, particularly in underdeveloped economies where non-bank financial intermediaries are generally less sophisticated.29 Research also shows that, compared with other forms of financial intermediation, well-established banks form strong ties with the private sector, a relationship that enables them to acquire information about firms more efficiently and to persuade firms to pay their debts in a timely manner.30 Advocates of bank-based systems argue that banks that are unimpeded by regulatory restrictions tend to benefit from economies of scale in the process of collecting information and can thus enhance industrial growth. Banks are also seen as key players in eradicating liquidity risk, which causes them to increase investments in high-return, illiquid assets and speed up the process of economic growth.31 One of the key measures of the efficacy of the banking system captured in this pillar is size.The larger the banking system, the more capital can be channeled from savers to investors.This enhances the process of financial development, which in turn leads to greater economic growth.These measures of size span deposit money bank assets to GDP, M2 to GDP, and private credit to GDP. Another key aspect of the banking system is its efficiency. Direct measures of efficiency captured in the
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Index are aggregate operating ratios such as bank operating cost to assets and the ratio of non-performing loans to total loans. An indirect measure of efficiency is public ownership. Publicly owned banks tend to be less efficient, impeding the processes of credit allocation and channeling capital, which in turn slows the process of financial intermediation. Measures of operating efficiency may provide an incomplete picture of the efficacy of the banking system if it is not profitable.We have thus also included an aggregate measure of bank profitability. Conversely, if banks are highly profitable while performing poorly in the operating measures, then this may indicate a lack of competition along with undue and high inefficiency. A third key aspect of the efficacy of the banking system captured by this pillar is the role of financial information disclosure within the operation of banks. Policies that induce correct information disclosure and that authorize private-sector corporate control of banks, as well as motivate private agents to exercise corporate control, tend to encourage bank development, operation, and stability.32 This has a positive effect on the overall economy. Fifth pillar: Non-banking financial services
Because of inadequate regulation and oversight, certain non-banking financial services, such as securitization, played a detrimental role in the current financial crisis. However, non-bank financial intermediaries—such as broker dealers, traditional asset managers, alternative asset managers, and insurance companies—are still considered both an important complement to banks and a potential substitute for them.Their complementary role lies in their efforts to fill any vacuum created by commercial banks.Their competition with banks allows both parties to operate more efficiently in meeting market needs. Activities of non-bank financial intermediaries include their participation in securities markets as well as the mobilization and allocation of financial resources of a longer-term nature—for example, in insurance activities. Empirical research has found that banks as well as non-bank financial intermediaries are larger, more active, and more efficient in advanced economies.33 Advocates of the market-based system (i.e., non-banks) point to the fact that the market-based system is able to finance innovative and high-risk projects.34 As for the insurance sector, it can be seen as a tool that eases trade and commerce by providing ample liability coverage. Insurance also creates liquidity and facilitates the process of building economies of scale in investment, thereby improving overall financial efficiency.35 And insurance has been found to mobilize illiquid savings to positively affect growth.36 The degree of development of non-bank financial intermediaries in general has been found to be a good proxy of a country’s overall level of financial development.37
Sixth pillar: Financial markets
The four major types of financial markets include bond markets (both for government and corporate bonds), stock markets where equities are traded, foreign exchange markets, and derivatives markets. Stock market liquidity is statistically significant in terms of its positive impact on capital accumulation, productivity growth, and current and future rates of economic growth.38 More generally, economic theory suggests that stock markets encourage long-run growth by promoting specialization, acquiring and disseminating information, and mobilizing savings in a more efficient way to promote investment.39 Research also shows that as countries become richer, stock markets become more active and efficient relative to banks.40 Bond markets have received little empirical attention, but recent research has shown that bond markets play an important role in financial development and the effective allocation of capital.41 Derivatives markets are an important aspect of this pillar because they can significantly improve risk management and risk diversification.The development of derivatives markets can enhance the confidence of international investors and financial institutions and encourage these agents to participate in them. Derivatives markets generally are small in emerging markets.The strengthening of the legal and regulatory environment can enhance the development of such markets.42
Financial access This third and final category is comprised of one pillar that represents the measures of access to capital and financial services. Seventh pillar: Financial access
The measures represented in this last pillar span measures of access to capital through both commercial and retail channels. Empirically, greater access to financial services has been associated with the usual proxies for financial development and resulting economic growth.43 The presence of financial services per se as reflected by size and depth does not imply their accessibility by the different types of users within an economy.Thus, the presence of access becomes integral to our analysis. Measures of commercial access captured include venture capital availability, access to local equity markets, access to credit, access to loans, and an overall level of financial market sophistication. Performance in the other pillars contributes to performance in this subpillar and to the extent of access to financial services by end users. We have also introduced measures related to retail access to financial services that are provided by the Consultative Group to Assist the Poor and the Microfinance Information Exchange, Inc.These include measures such as the penetration of bank accounts, the number of automated teller machines (ATMs) and
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points of sale (POS), and microfinance penetration. These measures capture access to capital by individuals and small enterprises that can be important contributors to growth in developing countries. Accessibility, along with the size and depth of the financial system as a whole captured in the previous pillars, has a significant effect on a country’s real activity, economic growth, and overall welfare.
Adjustments to the Financial Development Index this year The structure of the Financial Development Index remains largely similar to that used in last year’s inaugural report.While there are still seven pillars in the Index, we have improved several of them slightly.The 7th pillar now focuses specifically on measures of access to financial services and capital, whereas last year it also included measures of size and depth of the overall financial system. We have redistributed these size measures into the appropriate financial intermediation pillars (the 4th, 5th, and 6th pillars, specifically). As noted previously, we have also expanded our definition of financial access to include a new subpillar of retail measures that are applicable to individuals and small enterprises.We considered that this was an important dimension to add to the Index in consideration of the important role that this segment of the economy can play in developing countries. We have also made some refinements to the measures within each of the seven pillars to better proxy for the components of financial development we are trying to capture.Within the 1st pillar (institutional environment), we have combined capital account and domestic financial sector liberalization measures with a new measure on commitment to the WTO agreement on trade in services to create a single subpillar called financial sector liberalization. We now interact this variable with bond market development in addition to the legal and regulatory issues score, as noted previously.We have also added measures related to corruption perceptions and legal rights. A couple of changes were made to the 2nd pillar (business environment) to better align cost of doing business measures with financial services companies and to add indirect cost measures related to time required to undertake some business-related activities. A measure of absolute tax rates was replaced with a variable to increase the emphasis on distortionary or inefficient tax policies. Several changes were made to the financial stability pillar, in particular the banking stability subpillar.We now use a new financial strengths indicator instead of a stability index, have moved some regulatory measures into the institutional environment pillar, and added a variable pertaining to the manageability of private debt as an additional indicator of “bubbles.” Similarly, a manageability of public debt measure has been added to the
Table 1: The Financial Development Index 2009 rankings 2008 Rank
2009 score (1–7)
Change in score
1
2
5.28
–0.55
2
11
5.13
+0.15
United States
3
1
5.12
–0.73
Singapore
4
10
5.03
–0.12
Hong Kong SAR
5
8
4.97
–0.26
Canada
6
5
4.96
–0.30
Switzerland
7
7
4.91
–0.32
Netherlands
8
9
4.85
–0.37 –0.64
Country/Economy
2009 Rank
United Kingdom Australia
Japan
9
4
4.64
Denmark
10
n/a
4.64
n/a
France
11
6
4.57
–0.68
Germany
12
3
4.54
–0.74
Belgium
13
17
4.50
–0.06
Sweden
14
13
4.48
–0.27
Spain
15
12
4.40
–0.50
Ireland
16
14
4.39
–0.33
Norway
17
15
4.38
–0.28
Austria
18
18
4.28
–0.27
Finland
19
21
4.24
–0.21
United Arab Emirates
20
16
4.21
–0.40
Italy
21
22
3.98
–0.40
Malaysia
22
20
3.97
–0.51
Korea, Rep.
23
19
3.91
–0.64
Saudi Arabia
24
27
3.89
–0.01
Jordan
25
n/a
3.89
n/a
China
26
24
3.87
–0.22
Bahrain
27
28
3.85
–0.04
Israel
28
23
3.69
–0.45
Panama
29
32
3.63
+0.03
Kuwait
30
26
3.62
–0.31
Chile
31
30
3.60
–0.19
South Africa
32
25
3.48
–0.51
Czech Republic
33
35
3.48
+0.05 +0.18
Brazil
34
40
3.46
Thailand
35
29
3.35
–0.48
Egypt
36
37
3.33
+0.01
Slovak Republic
37
42
3.30
+0.05
India
38
31
3.30
–0.34
Poland
39
41
3.27
0.00
Russian Federation
40
36
3.16
–0.24
Hungary
41
33
3.08
–0.45
Peru
42
46
3.07
+0.01
Mexico
43
43
3.06
–0.15
Turkey
44
39
3.03
–0.27
Vietnam
45
49
3.00
–0.03
Colombia
46
44
2.94
–0.27
Kazakhstan
47
45
2.93
–0.20
Indonesia
48
38
2.90
–0.41
Pakistan
49
34
2.85
–0.61
Philippines
50
48
2.84
–0.19
Argentina
51
47
2.77
–0.26
Nigeria
52
50
2.72
–0.04
Ukraine
53
51
2.71
–0.02
Bangladesh
54
n/a
2.57
n/a
Venezuela
55
52
2.52
–0.18
Note: Some refinements have been made to this year's Index that may affect comparability with the previous year's results.
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risk of sovereign debt crisis subpillar as well as an aggregate macroprudential indicator and measure of credit default swap spreads.The weighting of the banking stability subpillar has also been increased slightly, to 40 percent. Other changes to variables include the inclusion of operational efficiency measures and an aggregate profitability indicator to replace an efficiency index in the banking financial services pillar.We now use a three-year running average for some measures in the non-banking financial services pillar to provide a steadier indication of trends in non-banking activities (e.g., IPOs and securitizations). Several additional measures have been added to the financial markets pillar, including the number of listed companies per 10,000 people.
Figure 2: Change in overall Index scores by GDP tier
7,000 Top 5 by GDP
6,000
5,000
4,000
3,000 6th–10th by GDP
2,000
The Financial Development Index 2009 rankings The overall ranking for this year’s Financial Development Report can be seen in Table 1, along with the 2008 ranking, the Index score, and the change in score from last 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 trends seem apparent.
11th–20th by GDP 21st–30th by GDP 31st–40th by GDP
-0.7
-0.6
-0.5
-0.4
-0.3
1,000
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41st–55th by GDP
-0.2
-0.1
0.0
Change in FDI score from 2008 to 2009
Note: The graph shows the change in overall Index score grouped by GDP (US$ billions); GDP values shown are average for each tier. Some refinements have been made to this year's Index that may affect comparability with the previous year's results.
Comparison of 2009 and 2008 scores and rankings
The vast majority of scores have dropped significantly compared with a year ago. In general, those that dropped the furthest were in the largest industrialized economies. France (–0.68), Germany (–0.74), Japan (–0.64), the United Kingdom (–0.55), and the United States (–0.73) experienced the largest declines in absolute score.The size and global nature of these financial systems may have led to greater exposure to the current financial crisis, which was manifested across the different pillars of the Index. This trend would appear to be consistent across the broader sample of countries covered in the Index. In Figure 2, countries are grouped by the size of their GDP, and the average GDP for each group is plotted against the average change in score from last year. One sees a general trend that larger economies experienced a sharper drop in overall score than smaller economies. Of the relatively few countries that experienced an increase, Brazil experienced the largest (+0.18) and Australia the second largest (+0.15), which would seem consistent with the relatively robust performance of their financial systems in the face of the extreme instability of the past year. Countries at the bottom of the Index, such as Nigeria and Venezuela, have remained there with little improvement. Thus, for most countries, it was the relative nature of their declines that determined their ranking in the Index.44 This can be seen in the countries ranked within the top 10 of the Index—all of them except Australia experienced a decline in their overall score.The United Kingdom managed to move into the top spot in the
11 rankings despite a significant drop in score.The United States’ drop in score pulled it down to 3rd from 1st. Two small developed Asian economies, Hong Kong and Singapore, both climbed the rankings to 4th and 5th place, respectively, while Japan dropped to 9th place from 4th last year.Three smaller European economies— Switzerland (7th), the Netherlands (8th), and Denmark (10th)—along with Canada (6th), round out the top 10. France and Germany both dropped out of the top 10 into 11th and 12th place, respectively. Many countries banded in the middle of the Index did not experience significant changes in their relative rank despite the financial turmoil of the past year; however, there were some notable exceptions. Brazil’s increase in overall score moved it up to 34th in the ranking from 40th, while Pakistan experienced one of the most severe drops; it fell 15 places down to 49th from 34th, which probably reflects the political and economic instability confronted by the country and the resulting impact on its financial system. Indonesia and South Africa also experienced significant declines.There was no improvement in score for countries at the bottom of the Index such as Nigeria, Ukraine, and Venezuela. Financial stability and the Financial Development Index
In Table 2, the rankings and scores are provided for each of the FDI pillars that have been described previously in this chapter. A look across country rankings and scores in each of these pillars reveals a degree of heterogeneity
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Table 2: Financial Development Index 2009
OVERALL INDEX
FACTORS, POLICIES, AND INSTITUTIONS 1st pillar: Institutional environment
Country/Economy United Kingdom Australia United States Singapore Hong Kong SAR Canada Switzerland Netherlands Japan Denmark France Germany Belgium Sweden Spain Ireland Norway Austria Finland United Arab Emirates Italy Malaysia Korea, Rep. Saudi Arabia Jordan China Bahrain Israel Panama Kuwait Chile South Africa Czech Republic Brazil Thailand Egypt Slovak Republic India Poland Russian Federation Hungary Peru Mexico Turkey Vietnam Colombia Kazakhstan Indonesia Pakistan Philippines Argentina Nigeria Ukraine Bangladesh Venezuela
Rank Score
Country/Economy
1
5.28
Singapore
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
5.13 5.12 5.03 4.97 4.96 4.91 4.85 4.64 4.64 4.57 4.54 4.50 4.48 4.40 4.39 4.38 4.28 4.24 4.21 3.98 3.97 3.91 3.89 3.89 3.87 3.85 3.69 3.63 3.62 3.60 3.48 3.48 3.46 3.35 3.33 3.30 3.30 3.27 3.16 3.08 3.07 3.06 3.03 3.00 2.94 2.93 2.90 2.85 2.84 2.77 2.72 2.71 2.57 2.52
Denmark Norway Sweden Netherlands Austria Switzerland Finland Germany Hong Kong SAR United States Canada Ireland Australia United Kingdom Belgium Japan France Spain Bahrain United Arab Emirates Malaysia Jordan Israel Saudi Arabia Panama South Africa Hungary Czech Republic Chile Korea, Rep. Italy Thailand Slovak Republic China Kuwait Poland Egypt Nigeria Peru Vietnam Brazil Philippines Mexico Indonesia Turkey Kazakhstan India Colombia Argentina Ukraine Pakistan Russian Federation Venezuela Bangladesh
Rank Score
2nd pillar: Business environment Country/Economy
1
6.17
Denmark
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
5.97 5.89 5.87 5.82 5.71 5.70 5.67 5.66 5.65 5.63 5.62 5.61 5.56 5.54 5.54 5.43 5.35 5.12 5.05 5.05 4.86 4.73 4.68 4.60 4.51 4.41 4.41 4.31 4.29 4.26 4.22 4.08 4.08 4.07 3.94 3.90 3.87 3.83 3.70 3.70 3.64 3.62 3.59 3.54 3.50 3.39 3.38 3.30 3.23 3.08 3.03 3.01 2.50 2.47
Singapore Norway Canada Sweden Finland Switzerland Netherlands Hong Kong SAR United States Australia United Kingdom Germany Ireland Japan Korea, Rep. Austria Bahrain United Arab Emirates France Belgium Italy Spain Saudi Arabia Chile Hungary Israel Slovak Republic Kuwait Malaysia Thailand Turkey Poland Russian Federation Czech Republic South Africa Jordan Colombia Panama China Kazakhstan Peru Mexico Argentina Ukraine Egypt Brazil India Vietnam Pakistan Philippines Indonesia Nigeria Venezuela Bangladesh
Rank Score
3rd pillar: Financial stability Country/Economy
1
6.15
Norway
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
6.05 5.98 5.94 5.93 5.88 5.84 5.84 5.82 5.70 5.68 5.63 5.60 5.48 5.45 5.35 5.29 5.24 5.19 5.09 5.08 4.94 4.92 4.88 4.84 4.68 4.60 4.56 4.51 4.49 4.43 4.37 4.34 4.21 4.19 4.15 4.12 4.11 4.09 4.09 4.05 3.95 3.90 3.81 3.73 3.70 3.63 3.51 3.44 3.42 3.36 3.26 2.95 2.92 2.71
Switzerland Hong Kong SAR Chile Singapore Saudi Arabia Canada Kuwait Australia Germany Finland France Malaysia Mexico Brazil Czech Republic United Arab Emirates Sweden Denmark Slovak Republic Netherlands Peru China Austria Colombia Poland Israel Korea, Rep. Nigeria Bangladesh South Africa Spain Belgium Japan Panama Thailand United Kingdom United States Russian Federation Bahrain Ireland Venezuela Indonesia Italy Egypt India Philippines Pakistan Vietnam Jordan Turkey Hungary Argentina Kazakhstan Ukraine
Rank Score 1
5.73
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
5.66 5.63 5.62 5.61 5.60 5.57 5.49 5.48 5.34 5.27 5.27 5.14 5.13 5.13 5.08 5.07 5.07 4.99 4.92 4.91 4.90 4.83 4.81 4.80 4.78 4.76 4.73 4.71 4.69 4.67 4.66 4.66 4.57 4.57 4.57 4.57 4.56 4.50 4.49 4.48 4.44 4.44 4.44 4.27 4.23 4.12 4.10 3.82 3.79 3.79 3.70 3.68 3.50 3.19
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Table 2: Financial Development Index 2009 (cont’d.)
FINANCIAL ACCESS
FINANCIAL INTERMEDIATION 4th pillar: Banking financial services Country/Economy Hong Kong SAR United Kingdom Japan Spain Australia Ireland Netherlands Canada Belgium China Singapore Malaysia Sweden Switzerland Jordan Norway Denmark Austria Germany United States United Arab Emirates Korea, Rep. France Panama Italy Israel Czech Republic Kuwait Finland South Africa Saudi Arabia Bahrain Slovak Republic Thailand Brazil Chile Vietnam Poland India Egypt Turkey Argentina Peru Indonesia Philippines Pakistan Colombia Kazakhstan Venezuela Nigeria Bangladesh Ukraine Hungary Mexico Russian Federation
5th pillar: Non-banking financial services
Rank Score
Country/Economy
1
5.39
United Kingdom
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
5.32 5.15 5.07 5.01 4.98 4.90 4.83 4.79 4.77 4.68 4.66 4.61 4.56 4.42 4.34 4.34 4.24 4.23 4.21 4.17 4.16 4.05 4.05 4.01 3.97 3.85 3.79 3.78 3.75 3.58 3.57 3.50 3.49 3.46 3.43 3.29 3.17 3.12 3.09 2.96 2.78 2.77 2.63 2.63 2.62 2.57 2.52 2.49 2.45 2.44 2.38 2.37 2.37 1.80
United States Australia Russian Federation Netherlands Japan Canada France Hong Kong SAR Germany Singapore China Spain Ireland Brazil Switzerland India Korea, Rep. Italy Kazakhstan Denmark Sweden Jordan Belgium Malaysia United Arab Emirates Ukraine Argentina Norway Finland Egypt South Africa Bahrain Saudi Arabia Mexico Indonesia Israel Austria Chile Turkey Philippines Vietnam Poland Colombia Peru Panama Thailand Venezuela Hungary Czech Republic Pakistan Nigeria Slovak Republic Kuwait Bangladesh
6th pillar: Financial markets
Rank Score
Country/Economy
1
6.36
United States
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
5.93 4.36 4.13 4.10 4.03 3.99 3.98 3.74 3.52 3.37 3.31 3.25 3.21 3.20 3.19 3.12 3.02 2.82 2.81 2.80 2.67 2.58 2.48 2.44 2.40 2.39 2.28 2.26 2.26 2.16 2.13 2.10 2.03 2.01 1.96 1.89 1.87 1.87 1.83 1.81 1.73 1.73 1.65 1.60 1.59 1.58 1.52 1.48 1.41 1.40 1.26 1.23 1.13 1.03
United Kingdom Singapore Switzerland Japan Australia Germany France Hong Kong SAR Netherlands Belgium Canada Jordan Spain Italy Sweden Denmark Kuwait Finland Korea, Rep. United Arab Emirates India Austria Ireland Pakistan China Norway Panama Malaysia South Africa Saudi Arabia Israel Czech Republic Egypt Hungary Thailand Brazil Poland Bahrain Philippines Russian Federation Turkey Vietnam Bangladesh Venezuela Slovak Republic Chile Mexico Argentina Peru Kazakhstan Indonesia Nigeria Ukraine Colombia
Rank Score 1
5.65
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
5.52 5.10 4.96 4.81 4.63 4.45 4.42 4.40 4.22 4.21 4.02 3.85 3.81 3.74 3.64 3.62 3.53 3.37 3.35 3.07 2.96 2.96 2.91 2.75 2.74 2.73 2.64 2.47 2.38 2.33 2.28 2.05 2.04 1.98 1.96 1.86 1.84 1.77 1.77 1.76 1.75 1.71 1.67 1.65 1.52 1.50 1.47 1.43 1.42 1.38 1.35 1.34 1.33 1.27
7th Pillar: Financial access Country/Economy
Rank Score
Australia Austria Canada Belgium Bahrain Denmark United Arab Emirates Switzerland Singapore Saudi Arabia Egypt United States Hong Kong SAR Netherlands Ireland United Kingdom Panama Spain France Jordan Italy
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
5.19 5.11 4.75 4.73 4.73 4.59 4.55 4.47 4.22 4.21 4.19 4.19 4.19 4.16 4.04 4.02 3.99 3.95 3.86 3.72 3.72
Malaysia Norway Israel Chile Sweden Czech Republic Finland Thailand China Brazil Vietnam Slovak Republic Poland Peru Indonesia Japan Turkey Kuwait Bangladesh Germany Hungary Mexico Colombia Ukraine Kazakhstan South Africa India Russian Federation Pakistan Philippines Korea, Rep. Nigeria Argentina Venezuela
22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
3.71 3.69 3.67 3.63 3.59 3.46 3.44 3.33 3.31 3.31 3.30 3.29 3.14 3.14 3.11 3.03 3.01 2.98 2.97 2.96 2.95 2.95 2.90 2.90 2.89 2.89 2.76 2.73 2.66 2.54 2.50 2.46 2.22 2.14
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Table 3: Countries ranked within the top three of each Index pillar FINANCIAL DEVELOPMENT INDEX PILLARS Country/Economy Australia Austria Canada Denmark Hong Kong SAR Japan Norway Singapore Switzerland United Kingdom United States
Financial Development Index 2009 rank
Number of times ranked in top three
1. Institutional environment
2. Business environment
3. Financial stability
2
2
—
—
—
—
18 6 10 5 9 17 4 7 1 3
1 1 2 2 1 3 3 1 3 2
— — 2 — — 3 1 — — —
— — 1 — — 3 2 — — —
— — — 3 — 1 — 2 — —
— — — 1 3 — — — 2 —
in performance in the different dimensions of financial systems represented. In Table 3 this finding is also apparent, as economies that are ranked in the top three spots in each pillar do not necessarily achieve a strong overall score or high scores in other pillars. A country such as Norway achieves very strong performance across the more “foundational” pillars related to institutional environment, business environment, and financial stability, yet is not as strong across the three financial intermediation pillars and the financial access pillar. Austria achieves a first-place showing in financial access, yet has scores that are not as strong in other pillars with an overall ranking of 18th place in the Index. Thus a strong performance in one or even several of the pillars does not necessarily translate to a strong performance for a country in the overall ranking.This has important implications for how the Index should be viewed in the context of the current global financial crisis. Given the degree to which the current crisis has compromised the functioning of financial systems, changed assumptions behind financial system governance, and impacted the lives of many who have felt its effect in the real economy, it may be tempting to construe the Index as a proxy for how stable or unstable countries’ financial systems are. It may also be tempting to view the Index as an indicator of how favorable an economy is for investment.These views are both inaccurate as the Index is both broader and longer term in scope: it looks at many different and often complex factors that support the long-term development of the financial systems it assesses. Financial stability is only part of the assessment of how well financial systems in these countries contribute to overall economic growth through the diversification of risks and the efficient allocation of capital to those who most need it. Consistent with the origins of the current financial crisis in the United Kingdom and the United States, these countries show very low scores in the financial stability pillar (37th and 38th, respectively), driven
4. Banking 5. Non-banking financial financial services services
6. Financial markets
7. Financial access
3
—
1
— — — — — — — — 1 2
— — — — — — 3 — 2 1
2 3 — — — — — — — —
particularly by low scores in banking system and currency stability. At the same time, there is evidence of continued strength across the financial intermediation pillars that capture such measures as the depth and efficiency of their banking systems (the United States is weaker than the United Kingdom here) the provision of important non-banking financial services such as IPOs, M&A activity, and insurance; and the size and activity of their financial markets. If one believes that financial stability should take a more prominent role in the Index than factors such as financial intermediation, what would that mean for the performance of countries like the United States and United Kingdom within the Index? Table 4 illustrates how the scores of the United States and the United Kingdom would be affected by increased weighting of the financial stability pillar. All pillars are currently weighted equally in the Index, which implies a weighting of approximately 14 percent for each. As the weighting of the financial stability pillar is increased, first by 20 percent and then by 40 percent, one sees that the rankings for the United States and the United Kingdom stay the same. It is only when the weighting is increased by 60 percent (to an absolute weighting of 23 percent) that the ranking of the United States drops by one place.When the weighting of the pillar is increased by 80 percent (representing an absolute weighting of over 25 percent of the total Index), the United Kingdom still remains in the top position while the United States is still within the top 5. Thus, even when increased weighting lends a greater importance to financial stability, this appears to be offset by the other relative strengths of the financial systems in these two countries. Financial stability and access in developing countries
This year’s Index points up some interesting findings with respect to financial stability and access to financial services in the developing economies covered. First, the rankings and scores within the financial stability pillar
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Table 4: Financial stability pillar: Sensitivity analysis
Table 5: Financial stability: Top 20 economies 2009 rank
ORIGINAL WEIGHT Pillar
Weight (%)
1 2 3 4 5 6 7
14.29 14.29 14.29 14.29 14.29 14.29 14.29
Country/Economy
Rank
Score
United Kingdom Australia United States Singapore Hong Kong SAR
1 2 3 4 5
5.28 5.13 5.12 5.03 4.97
1.20 x ORIGINAL WEIGHT
1.40 x ORIGINAL WEIGHT
Pillar
Weight (%)
Pillar
Weight (%)
1 2 3 4 5 6 7
13.81 13.81 17.14 13.81 13.81 13.81 13.81
1 2 3 4 5 6 7
13.33 13.33 20.00 13.33 13.33 13.33 13.33
Economy
Norway Switzerland Hong Kong SAR Chile Singapore Saudi Arabia Canada Kuwait Australia Germany Finland France Malaysia Mexico Brazil Czech Republic United Arab Emirates Sweden Denmark Slovak Republic
Score
5.73 5.66 5.63 5.62 5.61 5.60 5.57 5.49 5.48 5.34 5.27 5.27 5.14 5.13 5.13 5.08 5.07 5.07 4.99 4.92
Note: Highlighted countries are developing countries as defined by Moody’s Statistical Handbook (November 2008). Some refinements have been made to this year's Index that may affect comparability with the previous year's results.
Country/Economy
Rank
Score
Country/Economy
Rank
Score
United Kingdom Australia United States Singapore Hong Kong SAR
1 2 3 4 5
5.25 5.14 5.11 5.05 4.99
United Kingdom Australia United States Singapore Hong Kong SAR
1 2 3 4 5
5.23 5.15 5.09 5.07 5.02
1.60 x ORIGINAL WEIGHT
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
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1.80 x ORIGINAL WEIGHT
Pillar
Weight (%)
Pillar
Weight (%)
1 2 3 4 5 6 7
12.86 12.86 22.86 12.86 12.86 12.86 12.86
1 2 3 4 5 6 7
12.38 12.38 25.71 12.38 12.38 12.38 12.38
Country/Economy
Rank
Score
Country/Economy
Rank
Score
United Kingdom
1
5.21
Australia
2
5.17
Singapore
3
5.09
United States
4
5.07
Hong Kong SAR
5
5.04
United Kingdom Australia Singapore Hong Kong SAR United States
1 2 3 4 5
5.18 5.18 5.11 5.06 5.05
illustrate the degree to which the financial systems in many developing countries have been able to weather the current crisis.Table 5 presents the top 20 performers in this pillar. A number of developing economies are represented here—among them Chile, Malaysia, Mexico, Brazil, and the Czech and Slovak Republics. Many developing economies entered the recent downturn with much stronger macroeconomic and
financial fundamentals than they had in previous financial crises.This included lower liability dollarization, lower fiscal and private debt, and a better aggregate balance sheet for the financial services sector. For many countries, such as Brazil, this was the result of effective macroeconomic and financial policy in the wake of past crises as well as generally favorable economic conditions that included higher commodity prices and strong capital in-flows in the period preceding the crisis. For some developing countries, which perform relatively well in this pillar but poorly in others, this result may represent the relative lack of integration and development of their financial intermediaries, which limited their exposure to the global financial turmoil. As described previously, in some instances financial stability may imply a tradeoff with healthy risk-taking or the efficient allocation of capital to the highest-return investments. The measures of retail access to financial services, 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 developed countries. Commercial access measures include access to equity markets, private credit, and foreign investment that is generally more applicable to larger enterprises.The retail access measures include the market penetration of bank accounts, number of bank branches, ATMs, and the penetration of microfinance— measures that are more applicable to individuals and small businesses. On average, one sees that developing
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Figure 3: Comparison of commercial and retail access 2009 scores
5
■ Commercial access
■ Retail access
4
Score (1–7)
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2
1
0
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 in measures of commercial access. Figure 4 shows that half of those that score within the top 10 in this category are developing countries.This may be attributable at least in part to the ease with which large companies in these economies are able to access foreign capital. By contrast, developing countries appear significantly weaker with respect to the retail access measures described above. In addition to a lower average score, no developing country scores within the top 10 in this category.This finding has important implications given the significant role that small enterprises can play in the economic growth and welfare of developing countries. This may indicate the need for greater emphasis on distinct policy responses that address the “last mile” in providing capital and financial services to more distributed, less individually wealthy, yet nonetheless important agents within the economy.
Regional analysis While some high-level trends were highlighted in the previous section, it is also at the country level that some of the potentially more useful findings from this Report can be drawn.The country profiles contained in Part 2 of this Report provide detailed information with which to undertake this analysis. A summary of highlights drawn from these profiles is presented below by region.
EUROPE AND NORTH AMERICA
The United Kingdom takes 1st place in the Financial Development Index this year with a pronounced contrast of strengths and weaknesses across the seven pillars.The financial intermediation pillars shows the greatest strength, offsetting weaknesses in other areas, most notably a very poor performance in financial stability.The United Kingdom scores high marks with respect to the size of its banking system (1st) though it delivers relatively weak performance in its efficiency (24th), which includes measures of both operating efficiency and profitability. Strength in financial markets (2nd) is evident particularly for foreign exchange and derivatives.The country comes in 1st with respect to insurance, scoring top rankings in indicators such as insurance density (1st) and insurance penetration (1st). 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). It is important to note that the impact of activities such as securitization on financial stability are not captured in the non-banking financial services pillar but in the financial stability pillar.The United Kingdom scores very low in overall financial stability (37th), particularly in currency stability (44th) and banking system stability (45th). Aspects of its institutional environment (15th) are in need of improvement, especially across areas related to regulation and oversight, including official supervisory power (28th), centralization of economic policymaking
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(43rd), public trust of politicians (25th), and corporate governance (22nd).Taxation (20th) was also a specific area of weakness, as indicated by the distortive effect of taxes and marginal tax rates. Measures of financial access (16th) are not exceptionally strong. The United States comes in at 3rd place in the overall Index this year, with a similar mix of contrasting strengths and weaknesses across the seven pillars. Strengths can be seen in the country’s financial intermediation, particularly with respect to non-banking financial services (2nd) and financial markets (1st).The United States has deep and active financial markets across the four types of markets we have captured. Size is an important component of performance across these financial markets, but indicators of activity such as stock market turnover (3rd), stock market value traded (4th), and spot foreign exchange turnover (2nd) also signify strengths.The country performs well in measures of non-banking financial services such as M&A activity (2nd) and securitization (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 stability pillar; the United States achieves very low scores in overall financial stability (38th). Particular disadvantages are evident in currency stability (50th) and banking stability (36th) measures.The banking system in general also exhibits signs of weakness, with relatively lower scores in size (21st) and efficiency (26th). Potential areas of improvement in the institutional environment include the strength of auditing and reporting requirements (25th), the regulation of securities exchanges (29th), and public trust of politicians (26th). Canada comes in 6th in the FDI, with a generally solid performance across all the pillars of the Index. Financial access is a particular area of strength: Canada is 3rd in this pillar, with strong showings across the measures of both commercial and retail access.The country demonstrates consistent strength across all three financial intermediation pillars: banking financial services (8th), non-banking financial services (7th), and financial markets (12th). Despite its high degree of economic integration with the United States, Canada shows clear divergence from its biggest trading partner with respect to financial stability, where it comes in 7th out of the FDI country sample.The stability of the banking system (2nd) is a particular strength within this pillar. In terms of its institutional environment, Canada shows consistent high marks across most measures of corporate governance, though official supervisory power (34th) emerges as a potential area for improvement. Other potential areas of improvement include the strength of legal rights (29th) and the cost of enforcing contracts (23rd).The distortive effects of taxation (25th) also represents a potential development area in the business environment. Switzerland ranks 7th in the Index, with strong scores across its institutional environment.While the country has not been immune to distress as a result of
Figure 4: Top 10 countries in the commercial and retail access subpillars 7th pillar: Financial access
COMMERCIAL ACCESS Country
Score
RETAIL ACCESS Country
Score
Hong Kong SAR
1
Australia
Singapore
2
Austria
2
Panama
3
Denmark
3
Netherlands
4
Belgium
4
Bahrain
5
Canada
5
Switzerland
6
United States
6
United Arab Emirates
7
Italy
7
Chile
8
Spain
8
Jordan
9
Switzerland
9
Canada
10
France
10
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Note: Highlighted countries are developing countries as defined in Moody's Statistical Handbook (November 2008).
17 the current crisis, it nonetheless has performed very well with respect to overall financial stability (2nd). Potential areas of improvement in its institutional environment include contract enforcement and the strength of investor protection.The size of its banking system as scaled by GDP is a source of strength (5th), although its efficiency (22nd) and degree of financial disclosure (40th) lowers its score in the banking pillar (14th overall in this pillar). A 4th place ranking in financial markets is driven by the strength of its equity and foreign exchange markets. Similar to Switzerland, the Netherlands delivers solid results across most of the FDI pillars, which earns it 8th place in the rankings. However, the effects of the crisis seem to weigh a bit more heavily on its score, as reflected in its 21st place ranking in the financial stability pillar. Good corporate governance (4th) is a particular strength, as is its infrastructure (5th).The size of the Dutch banking system is a clear advantage, coming in 3rd place, contrasted by its score in banking efficiency (31st). Consistent high marks across other areas of financial intermediation are also evident in a strong showing in non-banking financial services (5th) and financial markets (10th). Neighboring Belgium has weaker scores in financial stability (33rd) and in the financial intermediation pillars such as non-banking financial services (24th); its overall rank of 13th place is bolstered by a strong score in financial access (4th). Denmark has been added to the countries covered by the FDI this year and it takes 10th place, propelled by strong scores in its institutional environment (2nd)
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and business environment (1st). Consistent strengths across areas such as legal and regulatory issues (3rd), human capital (2nd), and infrastructure contribute to the country’s good showing. Performance across the financial intermediation pillars is less strong, although Denmark delivers solid scores in financial access (6th). Sweden (14th), Norway (17th), and Finland (19th) showed a degree of similarity across their profiles, with strength in their institutional and business environments and contrasting relative weakness in their financial intermediation pillars. None of the Scandinavian countries or Finland show particularly strong access to financial services. France takes 11th place in the overall FDI ranking, 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 financial services but ranks a relatively weaker 23rd in banking, pulled down primarily by the relatively small size of its banking sector. Its banking system has shown a relatively high degree of stability through the current crisis, with a 12th place ranking this year. Corporate governance (28th) emerges as a potential development area within France’s institutional environment, while taxation (35th) and cost of doing business (29th) are areas of relative weakness in the business environment. Similar to France, Germany (12th) shows relative strength in its financial markets, with a 7th place ranking in this pillar.The stability of its banking system (7th) also bolsters its ranking. Although stable, banks in Germany score a relatively low 36th in terms of efficiency as measured across operational efficiency and profitability. In terms of its business environment, infrastructure is a particular area of strength (6th), while taxes and subsidies emerge as having a distortive effect on competition. Potential development areas include the need for greater official supervisory power (28th) and stronger investor protection (38th). Access to capital and financial services is a significant drag on the country’s ranking, with low scores in both commercial (43rd) and retail (35th) access. Italy comes in 21st in the rankings, with its financial markets—particularly its bond markets (9th)—being a relative strength. Financial access (21st) is consistent with its overall ranking, although there is a stark contrast between commercial access (52nd) and retail access (7th). Key development areas within its institutional environment include corporate governance (54th) and contract enforcement (52nd). Of the Eastern European countries, the Czech Republic scores the highest, coming in at 33rd with a generally even performance across the Index pillars. Financial stability, with a 16th place ranking, is a particular strength. Ukraine (53rd) has the lowest ranking in Eastern Europe, with a last-place finish in financial stability (55th) and room for improvement across most aspects of its institutional environment, including
corporate governance (52nd) and legal and regulatory issues (50th). Human capital (28th) emerges as a relative bright spot. The Russian Federation comes in 40th in the FDI, bolstered in large part by strength in non-banking financial services such as IPOs (3rd) and securitizations (3rd). Although a three-year average is used to smooth out volatility in these types of transactions, the data may still reflect unusually high activity in this category. By contrast, Russia’s banking system scores poorly (53rd) and there is room for improvement across most elements of its institutional environment, such as corporate governance (53rd), legal and regulatory issues (53rd), and contract enforcement (35th).
ASIA AND THE PACIFIC
Countries in the Asia and Pacific region show a high degree of variation across the FDI rankings, as they did last year. Australia comes in 2nd in the overall rankings and leads the region through solid performance in both banking (5th) and non-banking (3rd) financial services.The efficiency of its banks, where it earns 1st place in the rankings, is a key strength; the stability of its banking system (10th) and a low risk of sovereign debt crisis (1st) underpins its relatively high degree of financial stability through the current crisis. A less-developed bond market is one of the country’s few weak spots, particularly in terms of public domestic bond market capitalization (34th). Australia’s relative weakness in commercial access to capital (21st) is offset by its high level of retail access to capital (1st), enabling Australia to achieve the highest level of overall financial access in the Index. Australia is followed closely by Singapore (4th) and Hong Kong SAR (5th).These two economies show consistent strength across their institutional and business environments, as well as high scores in financial stability (5th and 3rd, respectively).Within the banking pillar, both economies show room for improvement with respect to financial information disclosure; however, this is offset by the efficiency of their banks (2nd and 4th, respectively).The size of Hong Kong’s banking system (as scaled by GDP) is a particular competitive advantage, with its 2nd place ranking. Non-banking financial services are strong in both economies, a result that appears to translate into broad commercial access to capital. Singapore and Hong Kong place 2nd and 1st, respectively, in the Index for commercial access. And although they both exhibit healthy equity and foreign exchange markets, bond market development is an area for improvement in both economies, particularly Hong Kong (34th); also some areas—such as securitization— appear relatively undeveloped, particularly in Hong Kong (48th).
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Japan ranks four spots below Hong Kong, at 9th place in the overall FDI rankings.The country’s sound financial intermediation is primarily responsible for its overall performance. Japan’s banks are sizeable and efficient, supporting a 3rd place ranking in the banking financial services pillar. Similar strengths are seen across non-banking financial services such as IPO and M&A activities and insurance.The country does less well with respect to its institutional environment, where high centralization in economic policymaking (46th) and lower public trust of politicians (32nd) serve as major impediments. Japan’s business environment also demonstrates room for improvement, particularly in areas of human capital such as the quality of its management schools (44th) and the effects of brain drain and the ease of hiring foreign labor (29th). Financial stability represents another development area for the country, with a lessstable banking system (40th) and currency (36th). The robust performance in measures of financial intermediation noted above do not seem to translate into enhanced financial access, with the country scoring a relatively weak 37th in this pillar. Malaysia (22nd) does consistently well across most aspects of its financial system. A stable currency underpins the country’s relatively stable financial system (13th). Its strength as an Islamic banking center appears evident in a relatively high score in the banking pillar (12th), with a high degree of financial disclosure being a key contributor here. Substantial M&A activity (14th) in the country’s non-banking financial services is offset by relatively low development of the insurance sector (40th). Lessdeveloped derivatives and foreign exchange markets serve as potential development areas for Malaysia’s financial markets (29th), although the country’s well-developed bond market (15th) is a clear advantage. Korea’s overall ranking of 23rd in the FDI is bolstered by strong scores across its business environment. Key strengths include a healthy pool of human capital supported by a high tertiary enrollment rate (2nd) and the high quality of math and science education (11th). A low cost of doing business (15th) and healthy telecommunications infrastructure also contribute to the country’s score in this pillar. Insurance (6th) emerges as a particular advantage in the financial intermediation categories, with consistently solid scores across banking and non-banking activities as well as its financial markets. However, despite these competitive advantages, financial access in the country is highly constrained (52nd), with poor marks for both commercial (47th) and retail (45th) access to capital. Despite some areas of integration of China’s (26th) financial system with that of Hong Kong’s, some notable distinctions remain between the two economies. China’s financial system is hindered by a less-developed institutional environment, with corporate governance (35th) evident as a key development area. A need to develop human capital (37th), improve the efficacy of the tax
system (40th), and develop the country’s infrastructure (43rd) are potential development areas in the country’s business environment (40th).The country’s highly stable currency and low risk of sovereign debt crisis contribute to the stability of the overall system (23rd), although the financial strength of its banking system scores relatively poorly (47th). It is worth noting that implicit or explicit government guarantees are not considered as part of this measure. China’s banking financial services are sizeable (8th), yet are considerably less efficient (30th) and are pulled down by a high degree of public ownership (48th) and weaker profitability (34th). Meanwhile, the country’s non-banking financial services also provide serious competitive advantages, particularly its IPO activity (ranked 1st). Thailand (35th) displays a consistently sound performance across most of the Index pillars.The most salient shortcoming for Thailand’s financial system can be seen in the weak score for the stability of its banking system (52nd), a disadvantage driven both by the frequency of past crises (48th) and a measure of the current financial strength of its banks (42nd). By contrast, a relatively stable currency (9th) helps support the stability of the overall financial system.The country’s non-banking financial services are hindered by under-developed securitization activity (50th) and a less-developed insurance sector (49th). India scores 38th in the overall FDI, with advantages seen in financial intermediation across non-banking financial services (17th), as well as robust derivatives and foreign exchange markets. However, the country’s institutional environment (48th) is considerably weakened by lower levels of financial sector liberalization (51st) as well as a low degree of contract enforcement (50th). India’s business environment (48th) is also affected by two particular challenges—an absence of adequate infrastructure (51st) and a high cost of doing business (50th). These areas of difficulty translate into highly constrained financial access; this is particularly evident in measurements of retail access to capital (47th). Although Vietnam (45th) and Kazakhstan (47th) display weaknesses across a number of aspects of their financial systems, competitive advantages do also exist. In Vietnam, a low degree of external vulnerability (4th) and a relatively small percentage of external debt to GDP (18th) boost the banking system’s stability. In both countries, considerable IPO activity is an advantage in non-banking financial services. Kazakhstan further benefits from substantial securitization activity (4th), although—as with Russia—unusually high activity in this area may represent an anomaly in terms of a longterm trend. Bright spots in the financial system of Indonesia (48th) take the form of the country’s significantly stable currency (14th) as well as a fair degree of securitization activity (25th). However, these advantages are not enough to offset generally weaker scores across other areas of
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financial intermediation such as banking financial services (44th) and the overall institutional (45th) and business environments (52nd). Pakistan (49th), the Philippines (50th), and Bangladesh (54th) round out the representation of Asian countries in the FDI, all falling within the bottom 10 countries of the Index. A high degree of political and economic instability are probably contributing to weak scores across Pakistan’s institutional (52nd) and business (50th) environments; likewise, the country shows a very high risk of sovereign debt crisis (54th).The stability of its banking system (29th) is relatively strong by contrast. Despite generally low levels of stability, the financial systems of Pakistan and the Philippines also provide some indications of strength.The Philippines benefits from a relatively high degree of currency stability.The two countries also show relative advantages in their financial markets, as seen particularly in Pakistan’s fairly developed equity market (27th) and the Philippines’ active bond market (23rd). Bangladesh’s clear competitive advantage exists in its retail access to capital (16th).The country’s solid performance here can be mainly attributed to its achievement of the highest rate of microfinance borrowers in the Index.
LATIN AMERICA
A sound institutional environment and broad financial access are the key drivers of Panama’s place as the highest-ranked Latin American country on the Index (29th).The country’s business environment is reasonably developed with a fairly low cost of doing business. In contrast, Panama’s stable banking system (9th) is offset by an unstable currency (45th) and a fairly high risk of a sovereign debt crisis (39th).The country’s banking financial services are sizeable (19th) when scaled by GDP, and efficient (23rd). However, its non-banking financial services (46th) are uniformly weak, with low IPO and M&A activity as well as limited securitization and a less-robust insurance sector. Its financial markets include a well-developed bond market (11th), which far outpaces the development of its equity market (53rd). Chile comes in two ranks below Panama at 31st place this year.The high degree of overall stability in the country’s financial system (4th) surpasses the level present in any other Latin American country included in the FDI. Chile’s very stable banking system (3rd), fairly stable currency, and moderately low risk of a sovereign debt crisis all work to augment its financial stability. Financial markets represent the least-developed area of Chile’s financial system.This is particularly so in the case of the country’s bond market (40th). Commercial access to capital in the country (8th) is significant, while retail access is more constrained (28th), leading to a moderate level of overall financial access (25th).
Financial stability is a key contributor to Brazil’s ranking of 34th in the overall Index, as the country has exhibited stability across its banking system (25th) through the current crisis; its currency stability (3rd) is a particular advantage. Although the country possesses the Index’s highest official supervisory power (1st), Brazil’s institutional environment remains relatively weak in areas related to legal and regulatory issues (49th) and contract enforcement (42nd).The country’s business environment is dragged down by an inefficient tax collection system (55th), a high cost of doing business (43rd), and less-developed human capital (42nd). A high degree of IPO activity (4th) contributes to the country’s relatively high scores in non-banking financial services. Peru’s placement at 42nd in the rankings is supported by the relative stability of its financial system (22nd) and its banking system in particular (15th). However, the country displays weaker performance across most other areas of its financial system, including its institutional and business environments, its banking and non-banking financial services, and, most significantly, its financial markets (50th).Two bright spots are seen in Peru’s non-distortionary tax system (16th) and the fairly good disclosure of financial information (21st) within the country’s banking system. Mexico (43rd) and Colombia (46th) demonstrate lower levels of development in a number of areas of their respective financial systems. A stable currency and considerable stability in the banking system represent advantages held by both countries. Additionally, Mexico’s non-banking financial services are boosted by a large share of securitization deals (13th) and moderate M&A activity (27th). Mexico’s strengths within financial stability and intermediation appear to translate into good retail access to capital (23rd) in the country. Colombia’s area of relative strength outside of financial stability is seen in the country’s lower cost of doing business (22nd). Argentina (51st) and Venezuela (55th) round out the Latin American rankings and also place among the bottom five countries in the Index. Repeated episodes of banking crises in Argentina, combined with a high risk of sovereign debt crisis, impact the overall stability of the country’s financial system (53rd). A relative strength of Argentina’s business environment is its human capital (27th), which is driven by a high tertiary enrollment rate and good-quality management schools. However, these advantages are more than countered by a distortionary and inefficient tax system as well as the high cost of doing business in the country.Very strong financial information disclosure (2nd) is an advantage of its banking system, while a high degree of securitization activity (6th) shows some robustness of non-banking financial services. As an oil-producing nation,Venezuela does show some areas of relative strength across the stability of its currency (2nd), a current account surplus (8th), and a low level of external debt (6th).Yet these few bright spots are not enough to lift Venezuela off of
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its last-place finish in the overall FDI rankings. Weaknesses across almost all areas of its institutional and business environment are paralleled by undeveloped financial intermediaries and the lowest possible ranking in financial access (55th).
MIDDLE EAST AND NORTH AFRICA
The United Arab Emirates (UAE) achieves the highest ranking of all Middle Eastern and North African countries in the FDI at 20th place, demonstrating some contrasts in performance across the pillars of the Index. The country’s highly stable banking system (1st) contrasts with a high risk of sovereign debt crisis (41st). A favorable tax regime (2nd) is a key component of its business environment, although this is partly offset by its high cost of doing business (41st).The UAE’s banks are efficient (18th), although financial information disclosure is poor. Data limitations preclude the effective benchmarking of the size of its banks or its financial markets other than equities (25th). Consistent with its relatively developed equity markets, the UAE has shown significant IPO activity in recent years, though the lasting impact of the financial crisis on these activities has yet to be seen.The ease of access to loans and financing through local equity markets contribute to high commercial access to capital (7th) in the country. The financial system of Saudi Arabia (24th) mirrors that of the UAE in several respects. Saudi Arabia’s banks are highly profitable according to the measures captured in the FDI, yet they are not very big when scaled by GDP (42nd).They are also relatively weak in terms of financial information disclosure (43rd). Strong IPO activity contrasts with a low level of M&A activity in the country’s non-banking financial services.The country’s highly stable banking system (5th) and fairly stable currency (15th) contribute to high stability in the overall financial system (6th). Broad access to capital in Saudi Arabia for commercial use (15th) parallels a strength found in the UAE. Jordan places one rank below Saudi Arabia at 25th in the FDI, but displays different areas of relative strength and weakness. Jordan’s reasonably strong institutional environment is limited by poor corporate governance (41st) and a lack of sufficient contract enforcement (38th). A favorable tax regime (23rd) represents one bright spot within the country’s business environment (37th), while a high cost of doing business and lessdeveloped infrastructure serve as disadvantages.The country also features a well-developed equity market (14th), considerable IPO activity (16th), and banking financial services (15th) that are both sizeable and efficient. A notable level of financial access exists in Jordan, particularly through commercial channels (9th). In contrast to the financial systems of the two highest-ranked Middle Eastern countries, Jordan fares poorly with respect
to stability. Despite a stable banking system (16th), the country’s high risk of sovereign debt crisis and less stable currency contribute to a low level of overall financial stability (50th). Bahrain (27th) shows competitive advantages in the quality of its institutional environment, including a substantially liberalized financial sector (16th) and solid corporate governance (20th).The country’s business environment features a fairly low cost of doing business (12th) as well as a favorable tax regime (4th). Like Jordan, the stability of the country’s financial system is bolstered by a stable banking system (13th) but weakened by an unstable currency (52nd). Bahrain joins all of the higher-ranked Middle Eastern countries in exhibiting strong IPO activity and high capital access for commercial use (5th). Israel delivers a fairly sound performance across all of the FDI measures to support its overall ranking of 28th. Some areas of weakness can be seen with respect to an unstable currency (47th) and moderately high risk of a sovereign debt crisis (30th), which offset the banking system’s high level of stability (11th). Strong financial information disclosure (15th) by banks in Israel stands in contrast to its Middle Eastern peers.The banking system and equity markets are the strongest financial intermediaries in Israel, ranked at 26th and 15th, respectively. Retail access to capital in the country (14th) surpasses that available for commercial purposes (19th), in contrast to the performance of other Middle Eastern countries in the access pillar. Kuwait (30th) and Egypt (36th) are the lowestplaced countries in the region, although both rank near their geographical peers.The institutional environments in the two countries are diminished by several factors, including poor contract enforcement and less-effective corporate governance.While similar in their institutional challenges, Kuwait and Egypt differ considerably in other areas. Kuwait’s business environment is strengthened by an effective tax policy (16th). As is true in Saudi Arabia, the high degree of stability in Kuwait’s financial system (8th) is due to a very stable banking system. As an oilproducing country, it exhibits a low risk of sovereign debt crisis and a stable currency. Kuwait’s banks score well in efficiency (8th) though they are not particularly large, even when scaled by GDP. Financial access in Kuwait (39th) is the most restricted of the Middle Eastern countries included in the Index. By contrast, commercial access to capital is strong in Egypt (16th).The country’s fairly stable banking system (19th) is countered by a less-stable currency and a high risk of sovereign debt crisis.The country’s banking system is sizeable (17th), but an opportunity for improvement exists with respect to its efficiency (51st). Egypt’s insurance sector represents a competitive advantage for the country and is ranked 18th for this indicator.
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SUB-SAHARAN AFRICA
South Africa (32nd) displays sound performance in most of the FDI pillars. Its institutional environment features strong corporate governance practices (7th) complemented by world-class accounting and auditing standards (1st). Its insurance sector is also well developed, with a high degree of penetration (2nd).The country’s banking system has fared reasonably well through the current crisis, ranking 17th of all countries covered by the FDI. In contrast, its business environment continues to be negatively impacted by its lower development of human capital (50th) and bottlenecks in infrastructure (48th). Retail access to financial services (43rd) is also constrained. With an overall ranking of 52nd, Nigeria exhibits strength in the stability of its banking system (4th) with a generally low incidence of crises.Yet such stability is not accompanied by robust financial intermediation; both banking and non-banking financial services demonstrate significant limitations.The banking system is small even when scaled by GDP, with low levels of bank deposits (54th) and private credit (51st).The development of the country’s non-banking financial services sector is negatively affected by a less-robust insurance sector as well as limited equity offerings and M&A activity. As in South Africa, capital availability is greater for commercial use than through retail channels, and overall financial access remains low (53rd).
Conclusion The scale of the current financial crisis has rightfully stimulated movements to design and implement coordinated global governance of financial systems commensurate with their interdependence.Yet, as indicated in the brief highlights above, the challenges and contexts for financial systems across the world’s major economies are varied and complex. Solutions at the global level must be accompanied by the rigorous prioritization and implementation of reforms at the local level that are targeted to address the most pressing weaknesses and to cultivate existing strengths. Users of this Report are encouraged to explore the wealth of data in the country profiles and data tables that follow as a useful starting point to inform this analysis. The data they contain are by no means exhaustive or without limitations.They should be scrutinized and, where appropriate, challenged. However, we believe this Report is unique in the comprehensiveness of the framework it provides and the richness of relevant data it brings to bear on financial system development.We sincerely hope that others will find it useful and help us achieve its goal of promoting the full potential of financial systems to mobilize capital in the service of human welfare and prosperity.
Notes 1 Khan and Senhadji 2000. 2 Schumpeter held that financial intermediaries select the firms that utilize an economy’s savings. More formally, his view stipulated that financial intermediaries tend to adjust the process of savings allocation rather than alter the savings rate itself. Thus, Schumpeter’s notion of finance and development focuses on the effect of financial intermediaries on productivity growth and the rates of technological change. 3 For a detailed review of the literature on finance and growth, see Levine 2004. 4 For further discussion of the impact of financial crises on the poor, please see Chapter 1.3, “Financial Development, Financial Crises, and the Millennium Development Goals” by Erik Feyen. 5 Ranciere et al. 2008. This research does not suggest that financial crises are good for economic growth. Rather, it suggests that the systemic risk taking that overcomes financial bottlenecks to economic growth is associated with occasional financial crises. 6 For a detailed review of the literature on finance and growth, see Levine 2004. 7 La Porta et al. 1997, 1998, 1999; Levine 1998, 1999; and Barth et al. 1999. 8 Bekaert and Harvey 2005 also held explicitly that reforms that strengthen a country’s legal environment and investor protection are most likely the true cause for better growth prospects. 9 Barth et al. 2007. 10 Barth et al. 2007. 11 La Porta et al. 1997; King and Levine 1993. 12 Schleifer and Vishny 1997. 13 Tavares 2002. 14 Galor and Zeira 1993. 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 between liberalization and growth. The works of Quinn 1997; Klein and Olivei 1999; and Quinn and Toyoda 2008 support the relationship. Research presented in Edison et al. 2002b; Chanda 2003; and Arteta et al. 2003 found the relationship to be ambiguous. 17 De la Torre et al. 2008. 18 Ito and Chin 2007. 19 Levine 1997. 20 Outreville 1999. 21 Barro 1991. 22 Beck 2006. 23 Loayza and Ranciere 2002. 24 Rojas-Suarez 2003. The inaccuracy of these measures was found to be the result of poor accounting and regulatory frameworks and an inability to establish the “real” worth of banks due to illiquid markets for subordinated debt, bank shares and other liabilities and assets. 25 Goldsmith 1969. 26 Ito and Chinn 2007. 27 Levine 2004. 28 That such channeling and efficient allocation occurs is emphasized based on two premises: (1) financial intermediaries provide liquidity, and (2) financial intermediaries are capable of altering the riskiness of assets; see Claus and Grimes 2003. 29 Gerschenkron 1962, in addition to others, asserts that banks finance growth in a more effective and efficient way than marketbased systems, particularly in underdeveloped economies where non-bank financial intermediaries are generally less sophisticated. 30 Rajan and Zingales 2001.
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31 Levine 1997, 2001. 32 Barth et al. 1999. 33 Demirgüç-Kunt and Levine 2001. 34 Noyer 2006. 35 Lin 2007. 36 Carmichael and Dissou 2000. 37 Vittas 1998. 38 Levine and Zervos 1996 employed several indicators for stock markets spanning size (market capitalization ratio) and liquidity (stock market turnover and stock market value traded both as shares of GDP). 39 Arestis et al. 2001. 40 Demirgüç-Kunt and Levine 2001. 41 Fink et al. 2003. 42 See http://imf.org/external/np/speeches/2007/082207.htm. 43 Beck et al. 2005. 44 Three countries were added to the Index this year—Bangladesh, Denmark, and Jordan—which may contribute to the decline in ranking for some countries depending on their rank relative to these countries.
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Rojas-Suarez, L. 2003. “Rating Banks in Emerging Markets: What Credit Rating Agencies Should Learn from Financial Indicators.” Institute for International Economics Working Paper No. 01-06. Washington DC: Institute for International Economics.
———. 1998. “The Legal Environment, Banks, and Long-Run Economic Growth.” Journal of Money, Credit and Banking 30 (3): 598–13. ———. 1999. “Law, Finance, and Economic Growth.” Journal of Financial Intermediation 8 (1/2): 8–36. ———. 2001. “Bank-Based or Market-Based Financial Systems: Which Is Better?” NBER Working Paper No. 9138. Cambridge: National Bureau of Economic Research. ———. 2004. “Finance and Growth: Theory and Evidence.” NBER Working Paper No. 10766. Cambridge: National Bureau of Economic Research. Levine, R. and S. Zervos. 1996. “Stock Markets, Banks, and Economic Growth.” World Bank Policy Research Working Paper No. 1690. Washington, DC: World Bank. Lin, J.J. 2007. “The Nature and Importance of Insurance.” College of Commerce at National Chengchi University. Available at http://www.rmi.nccu.edu.Tw/modules/news/data/ 2007%2020_Nature_and_Importance_Insurance.ppt. Loayza, N. and R. Ranciere. 2002. “Financial Fragility, Financial Development, and Growth.” World Bank Policy Research Working Paper No. 3431. Washington DC: World Bank. McKinnon, R. I. 1973. Money and Capital in Economic Development. Washington, DC: Brookings Institution. Nardo, M., M. Saisana, A. Saltelli, S. Tarantola, A. Hoffman, and E. Giovannini. 2005. “Handbook On Constructing Composite Indicators: Methodology and User Guide.” OECD Statistics Working Paper JT00188147, STD/DOC(2005) 3. Paris: Organisation for Economic Co-operation and Development. Noyer, C. 2006. “Financial Systems for Economic Growth.” Paper Presented at the Third Conference of the Monetary Stability Foundation: Challenges to the Financial System—Ageing and Low Growth. Frankfurt-am-Main. July 6. Outreville, J. F. 1999. “Finanacial Development, Human Capital and Political Stability.” UNCTAD Discussion Paper 142. Geneva: United Nations Conference on Trade and Development. Quinn, D. P. 1997. “The Correlates of Changes in International Financial Regulation.” American Political Science Review 91: 531–51.
Vittas, D. 1998. “The Role of Non-Bank Financial Intermediaries (with Particular Reference to Egypt).” Policy Research Working Paper Series 1892. Washington, DC: World Bank.
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Appendix A: Structure of the Financial Development Index 2009 This appendix presents the structure of the Financial Development Index (FDI). The numbering of the variables matches the numbering of the data tables.The number preceding the period indicates to which pillar the variable belongs (e.g., variable 1.01 belongs to the first pillar). The hard data indicators used in the FDI are normalized on a 1-to-7 scale in order to align them with the Executive Opinion Survey’s results.1 The Technical Notes and Sources at the end of this Report provide detailed information on all the hard data indicators. In some instances, the interaction among different variables was also captured, because certain variables can be considered more beneficial in the presence of others. For instance, the effect of liberalizing the capital account and the domestic financial sector has been found in empirical studies to be mixed, yielding both positive and negative results. However, the presence of a strong legal and regulatory environment and a developed bond market tends to mitigate the negative effects of the liberalization process.To account for this, the scores of the capital account liberalization, commitments to WTO agreement on trade in services within the financial services sector, and domestic financial sector liberalization indexes were adjusted. Any country above the average standardized scores for the legal and regulatory environment and bond market development experienced positive effects as a result of the liberalization process, while the opposite is true for countries with scores lower than these averages.2
the equity and bond market subpillars, and a 20 percent weight was assigned to the foreign exchange and derivatives market subpillars.This was done to signify the relatively greater importance of equity and bond market development. For many variables, especially those related to the size and depth of the financial system, scaling by GDP was deemed necessary to control for country size. Scaling by GDP also allows for more relevant crosscountry comparisons.
Weighting and scaling of variables One of the key design principles of the Index is the inclusion of the breadth of variables relevant to the financial development of both emerging and developed economies. Given the emphasis placed on the component parts of the Index as a framework for analysis, we have taken a very conservative approach to the weighting of variables.We have generally weighted different components of the Index equally. In some instances, there was sufficient cause to assign different weights to the subpillars within the Index.Within the financial stability pillar, banking system stability is weighted more (40 percent) than currency stability and risk of sovereign debt crisis (30 percent each).Within the banking financial services pillar there are three subgroups: the size of the banking system, the efficiency of the banking system, and the role of financial information disclosure.The first two variables were weighted 40 percent each in this pillar, while the last variable was weighted at 20 percent, thus placing more importance on the size and efficiency of the banking system than on the role of disclosure.Within the financial markets pillar, a 30 percent weight was assigned to
1st pillar: Institutional environment .................14.29%
Index structure The percentage next to each category in the list below represents the category’s weight within its immediate parent category.The computation of the FDI is based on successive aggregations of scores, from the variable level (i.e., the lowest level) all the way up to the overall FDI score (i.e., the highest level), using the weights reported below. For example, the score a country achieves on the bond market development subpillar comprises 30 percent of the country’s financial markets pillar (VI) score. Likewise, the score a country achieves in the 5th pillar accounts for 14.29 percent of the FDI score. A dynamic weighting regime removes individual variables from the subpillar and pillar calculations when no data are present.The weight normally attributed to a particular variable will be spread among variables for which data are present.Therefore, the actual weight for each variable by country may not be exactly as noted.
A. Financial sector liberalization ......................25.00% 1.01 Capital account liberalization 1.02 Commitments to WTO agreement on trade in services 1.03 Domestic financial sector liberalization B. Corporate governance ..................................25.00% 1.04 Extent of incentive-based compensation 1.05 Efficacy of corporate boards 1.06 Reliance on professional management 1.07 Willingness to delegate 1.08 Strength of auditing and reporting standards 1.09 Ethical behavior of firms 1.10 Protection of minority shareholders’ interests 1.11 Official supervisory power 1.12 Private monitoring of the banking industry C. Legal 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
and regulatory issues .........................25.00% Burden of government regulation Centralization of economic policymaking Regulation of securities exchanges Property rights Intellectual property protection Diversion of public funds Public trust of politicians Corruption perceptions index
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Appendix A: Structure of the Financial Development Index 2009 (cont’d.) 1.21
Strength of legal rights index
D. Contract enforcement...................................25.00% 1.22 Effectiveness of law-making bodies 1.23 Judicial independence 1.24 Irregular payments in judicial decisions 1.25 Time to enforce a contract 1.26 Number of procedures to enforce a contract 1.27 Strength of investor protection 1.28 Cost of enforcing contracts
2nd pillar: Business environment ......................14.29% A. Human capital ...............................................25.00% 2.01 Quality of management schools 2.02 Quality of math and science education 2.03 Extent of staff training 2.04 Local availability of specialized research and training services 2.05 Brain drain and ease of hiring foreign labor 2.06 Tertiary enrollment B. Taxes ...............................................................25.00% 2.07 Irregular payments in tax collection 2.08 Distortive effect on competition of taxes and subsidies 2.09 Marginal tax variation 2.10 Time to pay taxes
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C. Infrastructure .................................................25.00% 2.11 Quality of overall infrastructure 2.12 Quality of telephone infrastructure 2.13 Internet users 2.14 Broadband Internet subscribers 2.15 Telephone lines 2.16 Mobile telephone subscribers D. Cost 2.17 2.18 2.19 2.20 2.21 2.22
of doing business .................................25.00% Cost of starting a business Cost of registering property Cost of closing a business Time to start a business Time to register property Time to close a business
3rd pillar: Financial stability...............................14.29% A. Currency stability ..........................................30.00% 3.01 Change in real effective exchange rate 3.02 External vulnerability indicator 3.03 Current account balance to GDP 3.04 Dollarization vulnerability indicator 3.05 External debt to GDP (developing economies) 3.06 Net international investment position to GDP (advanced economies) B. Banking system stability ..............................40.00% 3.07 Frequency of banking crises 3.08 Financial strengths indicator 3.09 Manageability of private debt 3.10 Aggregate measure of real estate bubbles C. Risk 3.11 3.12 3.13 3.14 3.15
of sovereign debt crisis ........................30.00% Local currency sovereign rating Foreign currency sovereign rating Aggregate macroprudential indicator Manageability of public debt Credit default swap spreads
4th pillar: Banking financial services...............14.29% A. Size 4.01 4.02 4.03 4.04 4.05 4.06 4.07
index.......................................................40.00% Deposit money bank assets to GDP Central bank assets to GDP Financial system deposits to GDP M2 to GDP Private credit to GDP Bank deposits to GDP Money market instruments to GDP
B. Efficiency index..............................................40.00% 4.08 Aggregate profitability indicator 4.09 Bank overhead costs 4.10 Public ownership of banks 4.11 Bank operating costs to assets 4.12 Non-performing bank loans to total loans C. Financial information disclosure..................20.00% 4.13 Private credit bureau coverage 4.14 Public credit registry coverage
5th pillar: Non-banking financial services ......14.29% A. IPO activity.....................................................25.00% 5.01 IPO market share 5.02 IPO proceeds amount 5.03 Share of world IPOs B. M&A 5.04 5.05 5.06
activity ..................................................25.00% M&A market share M&A transaction value to GDP Share of total number of M&A deals
C. Insurance ........................................................25.00% 5.07 Insurance premiums, direct 5.08 Insurance density 5.09 Real growth of direct insurance premiums 5.10 Insurance penetration 5.11 Relative value-added of insurance to GDP D. Securitization.................................................25.00% 5.12 Securitization to GDP 5.13 Share of total number of securitization deals
6th pillar: Financial markets...............................14.29% A. Foreign exchange markets...........................20.00% 6.01 Spot foreign exchange turnover 6.02 Outright forward foreign exchange turnover 6.03 Foreign exchange swap turnover B. Derivatives markets ......................................20.00% 6.04 Interest rate derivatives turnover: Forward rate agreements 6.05 Interest rate derivatives turnover: Swaps 6.06 Interest rate derivatives turnover: Options 6.07 Foreign exchange derivatives turnover: Currency swaps 6.08 Foreign exchange derivatives turnover: Options C. Equity market development.........................30.00% 6.09 Stock market turnover ratio 6.10 Stock market capitalization to GDP 6.11 Stock market value traded to GDP 6.12 Number of listed companies per 10,000 people
(Cont’d.)
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Appendix A: Structure of the Financial Development Index 2009 (cont’d.) D. Bond 6.13 6.14 6.15 6.16
market development ..........................30.00% Private domestic bond market capitalization to GDP Public domestic bond market capitalization to GDP Private international bonds to GDP Public international bonds to GDP
7th pillar: Financial access.................................14.29%
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A. Commercial access .......................................50.00% 7.01 Financial market sophistication 7.02 Venture capital availability 7.03 Ease of access to credit 7.04 Financing through local equity market 7.05 Ease of access to loans 7.06 Foreign direct investment to GDP B. Retail access ..................................................50.00% 7.07 Market penetration of bank accounts 7.08 Commercial bank branches 7.09 Total number of ATMs 7.10 Total number of point of sale (POS) devices 7.11 MFI borrowers’ penetration rate
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) The sample minimum and sample maximum are, respectively, the lowest and highest country scores in the sample of countries covered by the FDI. In some instances, adjustments were made to account for extreme outliers. For those hard data variables for which a higher value indicates a worse outcome (e.g., Frequency of banking crises, Entry restrictions for banks), we rely on a normalization formula that, in addition to converting the series to a 1to-7 scale, reverses it so that 1 and 7 still corresponds to the worst and best possible outcomes, respectively:
–6 x
(country score – sample minimum)
+ 7
(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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CHAPTER 1.2
This Time It’s Different: Transmission of the Global Financial Crisis to Emerging Market Economies and the Domestic and International Policy Response
In 2008 there was a lot of discussion about emerging market economies being able to decouple from the US recession and financial crisis. But, in spite of these arguments, first financial re-coupling and then real economic re-coupling took place once the advanced economies’ financial tsunami became global after the summer and fall of 2008.This led to a severe contagion in emerging market economies. It is often said that “when the United States sneezes, the rest of the world catches the cold”; this time around, the United States was not sneezing but rather had caught a severe case of chronic pneumonia; thus the financial contagion, followed by the real contagion, became virulent even in emerging markets.
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NOURIEL ROUBINI, New York University and RGE Monitor AYAH EL SAID, RGE Monitor
Status of emerging markets at the onset of the crisis At the onset of the global financial crisis, economic and financial fundamentals of the emerging market economies were much more robust than they had been in previous episodes of global turmoil.This was particularly evident in Latin America and Asia.This time around, emerging market economies entered the crisis with improved macroeconomic and financial fundamentals: they had moved from current account deficits to current account surpluses, they had moved from fixed exchange rates to more flexible ones, they had gone from having a low stock of foreign reserves to having a war chest of reserves, they had moved from fiscal deficits and primary deficits to smaller deficits and primary surpluses, they had reduced the stock of their public debt—domestic and/or external—relative to GDP, and they had improved the supervision and regulation of their banks and other financial institutions.They had also lowered their balance sheet imbalances by reducing maturity mismatches, currency mismatches, and debt versus equity mismatches. And they had less liability dollarization than in the past, especially in Latin America where such liability dollarization had been endemic for a long time. The relative resilience of emerging markets to external shocks was not only a result of the good policies implemented, but also the result of good luck: 2004–07 was a very favorable period of external conditions for emerging markets in a booming global economy. Among the external conditions that positively affected emerging markets prior to the crisis were the high level of global growth (4.7 percent over the period 2003–07);1 the sharp rise in commodity prices; and international investors’ search for yield, along with their low risk aversion, which together led to their massive investment in the asset markets of emerging countries. All these favorable conditions led to huge capital inflows into emerging markets in the boom years. With the collapse of Lehman Brothers on September 15, 2008, however, the global financial crisis swiftly spread beyond the United States and spillover effects were felt in emerging markets very rapidly, triggering the start of their own economic and financial downturn.
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The financial tsunami was associated with a dramatic increase in risk aversion; massive liquidity shortages in global financial markets; plunging asset prices in both advanced and developing economies; increased emerging market spreads; the unraveling of carry trades, which translated into a sizeable weakening of the high-yielding emerging market currencies; downward pressures on currencies; and a significant retrenchment of bank lending to emerging economies.Thus, the global financial crisis was seen to hit emerging markets through several channels of transmission and re-coupling that will be considered in more detail in the next section
Transmission channels The global financial crisis hit emerging markets through (1) trade channels, (2) financial channels, and (3) commodity channels via the sharp drop in commodity prices. Among the strongest transmission channels, however, was the trade channel, as the recession sharply lowered demand for emerging market exports. Trade and commodity channels
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An important factor in the impressive growth of emerging markets since 2004 was the rapid increase in their export earnings; this was especially the case for those in Asia. However, when the recession hit the United States and other G-7 countries, their demand for exports from emerging market economies diminished sharply, leaving them vulnerable to declining export receipts. China, Korea, Malaysia, Singapore, and Thailand were particularly hard hit through the trade channel. It is worth noting that in January 2009, exports of goods in emerging markets plunged by 25 percent compared to a year earlier.The fall in the US dollar value of exports was also the result of plunging commodity prices: after peaking in mid 2008, prices fell rapidly, reflecting the fall in external demand for the exports of goods and services of emerging markets. For example, oil prices peaked above US$140 a barrel in the summer of 2008, but then plunged to US$30 by the first quarter of 2009.The sharp fall in world trade and in commodity prices was also a result of a “blockage” of world commercial credit after the Lehman collapse. Some estimates suggest that almost 80 percent of world trade is fairly contingent upon credit; clearly the lack of access to trade credit contributed to the sharp fall in world exports.2 The World Bank estimated that world trade, which was growing over 7 percent in 2007, will contract by about 10 percent in 2009 and will be practically flat in 2010.3 The sharp fall in commodity prices severely damaged the export earnings of a large number of countries that are major exporters of commodities. Even nonenergy commodity prices plunged significantly, with detrimental effects for emerging markets that export such goods.4 The contraction in trade is particularly serious
for countries that entered the crisis with large current account deficits; these countries experienced sharp depreciation pressures on their currencies because of their large and unsustainable external balances. Financial and bank credit channel
The direct impact of the global financial crisis on banks in emerging markets depended on the amount of toxic assets they were holding.With very few exceptions, this exposure was extremely limited in the financial institutions of emerging markets. Among the Asian countries, for example, China’s financial sector is still largely controlled by the government, and because of this it had only limited exposure to the sub-prime mortgages in the United States. However, the indirect financial effects of the crisis were more significant for emerging markets despite their sound macroeconomic and financial fundamentals. Such effects were reflected in the significant plunges in the stock markets of emerging countries and a sharp reduction in capital flows, which in some cases took the form of a sudden stop of capital.The latter was apparent especially in countries with external imbalances, such as those in emerging Europe. As increasingly risk-averse and capital-losing investors and financial institutions in advanced economies pulled capital out from emerging market economies, the stock markets, bond markets, and currencies of emerging countries contracted sharply. Since the ample global liquidity prior to the global financial crisis left many emerging markets exceedingly dependent on external sources of capital, they became increasingly vulnerable to a sudden stop of these capital flows.Thus, when banks and international investors in advanced economies significantly decreased their exposure to emerging markets, funding for sovereign debt and corporate borrowing severely dried up. Consequently, the cost of external financing soared for emerging markets with widening spreads on sovereign external debt and corporate borrowing. The emerging markets whose banking systems are mostly owned by foreign financial institutions—such as those in emerging Europe—were relatively hurt more by the global liquidity and credit crunch.This occurred as the capital losses in the home countries of banks with massive exposure to emerging markets led them to retrench and cut their exposures to their foreign subsidiaries in emerging markets.Yet it should be noted that, for the most part, the problems of emerging market banks were limited to liquidity issues rather than concerns about insolvency.Thus, emerging market banks did not need bank recapitalization funds as much as they needed liquidity support. However, the credit crunch and reduced bank lending led to lower levels of investment and lower growth rates in 2009.
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Which emerging markets were affected by which channels? It is important to note that the countries that were affected most during the crisis were those with the least sound macro and financial fundamentals. At the outset of the global financial crisis, there were two types of countries. First, there were those with current account surpluses that—in some ways—withstood the crisis better.This group of countries continued to fare better than their counterparts with current account deficits, who experienced severe financial pressures because of their large external imbalances. Most of the countries with large external imbalances—over 20 of them—are in emerging Europe and some of the former Commonwealth of Independent States (CIS) countries.These countries had, to different degrees, a number of macro and financial vulnerabilities: current account deficits, fixed or very managed exchange rates, overvalued currencies, fiscal deficits and public debt accumulation, large foreign currency liabilities and maturity mismatches leading to rollover/liquidity risks, a low level of foreign currency reserves, and imbalances both in the public sector and the private sector (households, financial institutions, and corporations). Many emerging countries, such as Russia and countries in emerging Europe, experienced a large increase in privatesector external liabilities. In some countries, such as Brazil and Mexico, corporations were also involved in risky carry trades. Latin America and Asia, on the other hand, were affected mostly through lower commodity prices, which sharply reduced their export revenues. In emerging Asia there was also a sharp drop in manufactured exports. External funding risks, nevertheless, were less severe in these regions than they were in weaker emerging markets due to Latin America and Asia’s better external balances, bigger international reserves, smaller refinancing needs, and deeper local funding markets.5 In the case of India, falling export receipts and tightened credit were the main channels through which it was hit. In Latin America, plummeting stock markets and currencies, lower exports, lower commodity prices, and lower remittances from Latin workers in the United States and Europe were among the conduits of the crisis. Portfolio flows experienced sharp declines because of the increased risk aversion of international investors and the increased currency vulnerabilities.Yet, as in the case of other emerging markets, the accumulation of sizeable gross (non-reserve) assets invested abroad acted as a buffer, shielding Latin America from the worst of the crisis. Relative repatriation of such assets in 2008 managed to improve the region’s external financial position during the current crisis.6 The impact of the US sub-prime mortgage crisis on Indian banks and its financial sector as a whole was roughly insignificant, however, because of the sector’s narrow exposure to toxic assets. Also, the fairly low
participation of foreign banks in the Indian banking sector managed to curtail any direct effects on the domestic economy.7 Yet India’s capital inflows had been hard hit, which exerted pressure on its balance of payments. Since some Indian banks relied on wholesale external funding, rather than retail deposits alone, the global liquidity and credit crunch led to a domestic credit squeeze. In the case of China, the global financial crisis manifested itself with a sharp drop in Chinese exports (as US consumers retrenched and reduced their imports of Chinese goods) and lower foreign direct investment (FDI). Most significant was the fact that Chinese exports and imports in February 2009 had fallen 25.7 percent and 24.1 percent, respectively, on a year-on-year basis, while FDI inflows dropped for seven consecutive months, plunging 22.5 percent in April 2009 compared with April 2008 when FDI was surging by 70.2 percent on a year-on-year basis.8 China also witnessed a downward correction in real estate prices coupled with sharp drops in the Shanghai Stock Exchange index. Generally, the banks in emerging markets appear to have been more sheltered from the global financial crisis than their counterparts in advanced economies because of their limited exposure to toxic assets, lower levels of leverage, and sounder supervision and regulation. Specifically, banks in emerging Asia and Latin America appear to have also limited their foreign currency exposures and financed their credit growth through local deposits.Thus, the need for recapitalization funds was limited to a few countries such as Hong Kong, India, and Korea. Eastern Europe, on the other hand, was hit hard, as its macro fundamentals were weak to begin with. This region witnessed a severe wave of capital outflows because of the liquidity dry-up and the global deleveraging. Real estate bubbles burst—most notably in Latvia and Lithuania—where rapid increases in housing prices had taken place during the years of the credit boom. Lower commodity prices also hit CIS countries hard. Cross-border bank funding was interrupted as a result of the banking crisis in Western Europe.The fact that banks in Eastern Europe were dependent on cross-border credit from banks in Western Europe was coupled with a high degree of foreign ownership of banks in Eastern Europe.Thus, financial pressures in Eastern Europe— especially in the Baltics, Belarus, Bulgaria, Hungary, Romania, and Ukraine—sharply increased.9 Because this time the global financial crisis took the form of a liquidity crisis rather than an insolvency one for emerging markets, domestic support via central banks’ injections of liquidity into the banking system was employed to avoid bank runs.
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Current account imbalances and capital flows to emerging markets The whirl in global asset markets since 2007 set off sizeable fluctuations in global capital flows.Within this context, highly tenacious imbalances have unpredictably lessened, and the sudden stop of capital flows into emerging markets implied significant corrections in those markets’ external imbalances. Most notable were the corrections in current account imbalances. After reaching a peak at the end of 2007/early 2008, current account imbalances—especially those between advanced economies—narrowed. In the case of emerging markets, however, current account corrections occurred when global commodity prices plunged. Thus, US$300 billion was knocked out of the Gulf Cooperation Council’s (GCC) external surplus of GCC countries in 2008. Russia’s current account surplus has fallen by US$80 billion. Latin America’s deficit has risen as the impact of the recession has been felt.10 In the case of Central and Eastern Europe (CEE), corrections in current account imbalances gained pace at the start of 2009 because of large currency depreciations and plunging domestic demand, import demand being no exception. Specifically, the severe credit constraints endured by households and businesses resulted in a severe retrenchment in import demand, leading in turn to hefty drops in their current accounts. Changing current account dynamics may also occur in case when a default on capital payments occurs, either through debt restructuring or capital controls, or both.11 The changing dynamics of external imbalances may also be reflected in the plummeting of the deficits of the private sector—in light of the collapse of private demand—in addition to the skyrocketing of public-sector deficits.12 The global economy fell sharply in the fourth quarter of 2008 and the first quarter of 2009. GDP in the three largest economies—the United States, the Euro area, and Japan (G-3)—fell by an average of 8.8 percent, seasonally adjusted annual rate, over that six-month period—a rate of decline not previously witnessed in the post-war period.This pattern of extreme weakness was shared across all economies, and was propagated by a collapse in world trade and global industrial activity. Emerging markets endured large portfolio outflows at the end of 2008; there is a high likelihood that such outflows will persist beyond 2009 because of prolonged pressures for leveraged investors to cast off assets and the risk of further redemptions from emerging market funds, in addition to crowding out from governmentguaranteed mature market bonds.13
Differences between then and now In previous crisis episodes, financial pressures in emerging markets were triggered by macro and financial vulnerabilities internal to those markets. In the current crisis, instead, shocks have instead originated from the center
of the global financial system—that is, from advanced economies. Four differences in terms of domestic and international policy response
Not only were there differences in terms of the origins of the financial crisis, there were also significant differences in the way the domestic and international policy responses to the crisis took form. International policy response In 2007, the conventional wisdom held that the International Monetary Fund (IMF) itself was in a crisis because it had almost no clients left for its emergency lending facilities after the crises of the 1990s and of the first part of the current decade.This was the case because most emerging economies improved their macro and financial fundamentals and graduated from the IMF’s emergency lending. But the most recent global financial crisis has restored the role of the IMF as a major international lender of last resort. Specifically, countries with macro and financial weaknesses had to rely on traditional IMF conditionality lending (loans in exchange for macro/financial reforms). At the same time, countries with stronger macro fundamentals were also at risk of a liquidity run.Thus, the IMF resorted to creating new facilities to provide large liquidity support with no strings attached to countries with strong fundamentals, which were also at risk of a liquidity run in light of the reversal of capital inflows. Hence, since the summer of 2008, the IMF has authorized at least US$50 billion in “standby arrangements” (SBAs) to 14 countries. SBAs are intended to address financing needs for countries with less sound economic fundamentals and are conditional on macroeconomic targets, mainly fiscal targets. Hungary, Pakistan, and Ukraine made the biggest arrangements.What is even more significant is the fact that amounts provided were generally much larger—relative to quota—than the rescue packages provided to emerging market economies in any of the crises in the 1990s.To give just one example: in 1997, a very large emerging market economy, such as Korea, received an IMF package that was less than US$10 billion. In 2008 a much smaller economy, such as Romania, received a package of US$20 billion. The IMF has so far provided US$3.9 billion out of the US$7.4 billion loan approved to Pakistan. In Hungary’s case, the IMF announced a US$15.7 billion 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 Union, and the World Bank as early as October 2008 to avoid an economic crisis caused by its high level of debt. The IMF also expanded the magnitude its “normal” loans, stretched the conditions under which it can allow
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large loans, and abridged the structural component of its lending arrangements.14 For countries with stronger economic fundamentals, the IMF created what is known as the flexible credit line (FCL), which is a vital element of its new approach to lending designed to avoid liquidity runs in these countries.The FCL is a precautionary lending tool that should act toward restoring investors’ confidence in a sound economy that is at risk of an international liquidity run.15 The FCL offers greater flexibility than the traditional SBAs because it does not come with traditional IMF conditionality. It is also available to IMF member countries deemed to possess very strong fundamentals, policies, and track records of policy implementation.16 Access to an FCL arrangement is based on the requesting country having met the criteria of strong fundamentals and a track record of policy implementation instead of satisfying ex-post performance standards. Countries that have received FCL support so far are Colombia, Mexico, and Poland. Mexico’s FCLs were given with a US$47 billion precautionary arrangement, while Poland and Colombia’s precautionary credit lines stood at US$20.5 billion and US$10.4 billion, respectively.17 In addition to IMF support, a variety of swap lines were created between the Fed and the European Central Bank (ECB) on one side and several emerging markets on the other side; this was indeed is a variant of international lending of last resort. Specifically, in April 2009, Mexico activated a US$30 billion swap line with the Fed to assist domestic companies with debt problems denominated in foreign currency. Mexico’s decision to tap the Fed swap line (coupled with FCLs) considerably lessened any existing apprehensions about Mexico’s balance of payments vulnerabilities. Among the other beneficiaries of such swap lines were Korea and Singapore with a US$30 billion swap line facility for each with the Fed, designed to increase dollar liquidity. The Inter-American Development Bank (IADB) also announced in late 2008 that it would provide a US$6 billion credit line to member governments and increase its more traditional lending for specific projects. More broadly, as of April 2009, multilateral development banks jointly pledged US$88 billion to emerging and developing countries in response to the global financial crisis.These funds cover policy loans, trade finance, political insurance, and equity investment funds for bank restructuring.18 The international policy response to the crisis poses a broad range of important questions: in the last decade, emerging markets have dealt with the risk of a liquidity/rollover crisis primarily with self-insurance. Specifically, they built a war chest of foreign exchange reserves as a defense against a run on their currencies or on the short-term foreign currency liabilities of their public and/or private sectors. But such self-insurance— as opposed to relying on IMF conditionality that comes with many strings attached—is a costly way to deal with
liquidity risk because foreign exchange reserves yield a very low return. Thus, since emerging markets need some international lending of last resort to deal with liquidity risk, we consider alternatives to the expensive accumulation of foreign exchange reserves.19 One option is the IMF’s new FCL, which is a form of contingent credit line. Another option is the one of bilateral swap lines such as those created by the Fed and the ECB for some emerging markets.The open issue is whether such temporary swap arrangements could be institutionalized and made more permanent as forms of contingent liquidity support in times of pressure. A third option is to pool reserves among emerging market economies.This is—in part— the spirit of the Chiang Mai Initiative (CMI) among the Association of Southeast Asian Nations (ASEAN) countries on one hand and the three leading Asian economies (China, Japan, and Korea) on the other hand.20 The use of the pooled reserves among the CMI members has, so far, been limited, and an open issue remains of how much such reserve use should be subject to IMF conditionality. A final option is to consider whether the international financial institutions should create new types of facilities that provide semi-automatic insurance to emerging countries against liquidity risk. The difficult and open question for insurance facilities is whether the access and use of such facilities should be subject to policy conditionality. Domestic policy responses The nature and number of domestic policy responses in emerging market in the wake of the current global financial crisis has been very different from that of previous crises.Traditionally, the policy response of emerging markets to domestic or international financial pressures was pro-cyclical rather than countercyclical because emerging markets had a history of poor macro and financial policies and weak policy credibility. If a crisis was triggered by domestic vulnerabilities, emerging markets had to tighten monetary and fiscal policy as a way to avoid the risk of a liquidity crisis and the risk of a disorderly collapse of the currency value.This policy tightening—however necessary to avoid a more severe crisis—would usually lead to a more severe recession. But in the current crisis, emerging markets were able to implement countercyclical policies because of their much stronger macro and financial fundamentals, low fiscal deficits, lower levels of inflation, and overall greater policy credibility. Policy intervention by emerging markets in the current crisis took the form of monetary easing to prop up liquidity, via lower policy rates and reserve requirements, as well as foreign exchange interventions to increase foreign currency liquidity for the private sector. Support to the banking system included deposit guarantees and bank recapitalization, in addition to interventions aimed at steadying money and capital markets.
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Emerging countries also implemented measures that would guarantee financing to priority borrowers such as small- and medium-sized enterprises.These measures have successfully contributed to lowering the cost of financing and maintaining the flow of bank credit in emerging markets.21 The largest fiscal stimuli were implemented in China, Hong Kong, Kazakhstan, Kuwait, Russia, and the United Arab Emirates; each economy’s stimulus amounted to at least 10 percent of GDP,22 with the aim of boosting expenditure to counterbalance the decline in demand. Policy measures that involved propping up the private sector of emerging markets were introduced in cases of debt roll-over incapability—particularly with regard to the foreign component of such debt obligations.This was clear in Latin America, where the sizeable drop in public external debt provided governments with additional scope to alleviate some of the stress in the private sector. CEE countries have gone through a brutal liquidity and credit crunch because of their banks’ dependence on external funding.As a result of their limited fiscal ability— apart from Russia and Kazakhstan—the amount of stimulus implemented by their governments has been trivial in the face of the recession they have endured. If anything, the emerging European countries with fiscal weakness— such as Latvia and Hungary—had to implement fiscal contractions in order to restore policy credibility. Also, because of the better financial conditions of emerging market banks and the fact that their problems were associated with liquidity rather than solvency, most emerging market domestic policy responses did not include much recapitalization for banks. But given the rising rate of defaults—which may jeopardize banking stability—that could be expected in some weaker emerging markets, and given also the fact that asset quality deterioration is a lagging indicator of an economic slowdown,23 an increase in the non-performing loans in emerging market banks may require a reconsideration of the policy responses for banks. Currency: No pressure to depreciate Generally, the global financial crisis shed light on the foreign exchange liquidity shortages with which emerging markets had to deal.With the collapse of Lehman Brothers, emerging market currencies depreciated sharply; Latin America is one prominent example, as countries in the region witnessed severe currency depreciations.24 Some governments have responded by boosting foreign exchange liquidity to restrain currency depreciation, depending on the amount of foreign exchange reserves accumulated by the respective governments.The currency pressures of emerging countries were driven by a combination of factors: the outflow of foreign capital, the sharp fall in commodity prices, the weakening of external balances following the fall in exports, the significant
countercyclical monetary easing, and the overall slowdown of economic growth. The currency policy response differed widely across the emerging markets. Some economies aggressively intervened to prevent excessive currency depreciation, thus losing a significant amount of their foreign reserves in their attempt to minimize currency movements.These countries include Malaysia and Peru. Other economies, such as Chile, kept the intervention to a minimum, and thus experienced a greater depreciation of their currency. Others, such as Brazil, Croatia, and Korea, took the middle road, both allowing the currency to depreciate from the external pressures and also intervening to prevent excess depreciation.Yet others, such as Russia, initially intervened aggressively to prevent currency depreciation, but then allowed significant depreciation once the stock of foreign reserves became dangerously low. The differential currency and reserve response reflected the size of the shocks experienced by different countries as well as some of their individual structural features.The terms of trade shocks experienced by Chile were larger than those of Peru, and thus warranted a greater depreciation. Liability dollarization is much greater in Peru than in Chile and Brazil; thus the Peruvian authorities are reluctant to let the currency depreciate, given the risks of negative balance sheet effects. Russia was concerned about the risk of a bank run (it has a history of such runs during episodes of currency crisis) and about the balance sheet effects of a depreciation of the foreign currency liabilities of financial institutions and corporate firms; thus, the government’s massive intervention in the foreign exchange market allowed economic agents who needed to hedge foreign currency liabilities to do so. Once such hedging occurred, letting the currency sharply depreciate became less risky. Malaysia has been concerned about excessive currency depreciation since it re-pegged to the US dollar in 1998, but it allowed limited currency depreciation within its managed basket peg. One new important element of policy response in this crisis is that the IMF did not request those countries with a fixed exchange rate regime that were in distress to depreciate their currency as a condition for the IMF’s financial support.The clearest example of this policy is that of Latvia, where, so far, the IMF has—however tentatively—accepted the view of the country’s authorities and the European Union that currency depreciation should be avoided. Concerns about regional contagion, the uncertainty about the impact devaluation would have on Latvia’s exports in light of the global slowdown, and about the effects of such depreciation on the foreign banks operating in Latvia and the severe balance sheet effects of such devaluation would have in a country with a large stock of foreign currency liabilities are behind this resistance to a depreciation. A devaluation in Latvia could put pressure on the currency boards of Estonia and Lithuania, jeopardizing an already wobbly
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financial stability in neighboring countries.Yet it should be noted that, although the IMF and the European Union may continue to increase their financial support for Latvia, that support, as in the case of Argentina, may be tantamount to throwing good money after bad. Given that Latvia is in the middle of severe near depression and a real devaluation through domestic deflation will exacerbate the collapse of output, a nominal depreciation seems to be necessary and eventually unavoidable. International resources would be better used to mitigate the collateral damage of such depreciation.25 No bail-ins of private creditors In previous episodes of financial crises in emerging markets, the IMF requested some private-sector involvement in crisis resolution that took the form of bail-ins (debt-restructuring) of private creditors in these markets. These bail-ins took various forms, from very mild to very coercive restructuring.The milder forms included the monitored commitment of foreign banks to maintain exposure to the emerging market in crisis (Brazil, Turkey), or the semi-forced rollover of the cross-border interbank lines (and their conversion into medium-term loans), as in the case of Korea; more coercive forms of bail-in included restructuring via exchange offers (under the implicit threat of default) of the external sovereign bonded debt of emerging markets with refinancing problems (Pakistan, Ukraine, Uruguay) or the imposition of capital controls (Malaysia).The more radical forms of bail-in included the outright sovereign defaults of Argentina, Ecuador, and Russia and the default on the foreign liabilities of private agents (banks, other financial institutions, corporate firms). One of the important features of the current crisis is that the IMF has not imposed any form of private creditors’ bail-in as a condition for its lending.The reasons for this new approach—which relies much more on large IMF lending, a true bail-out,26 and very little on creditors’ bail-ins—are several. First, the crisis was triggered by shocks external to emerging markets and financial vulnerabilities in the United States and in the financial centers of other advanced economies. Second, there is a perception that this is more a crisis of liquidity— which warrants the support of the international lender of last resort—than a crisis of solvency where debt restructurings and bail-ins would be warranted.Third, with few exceptions, problems in emerging markets under financial stress have been greater among privatesector agents than among sovereigns, thus reducing the need for sovereign debt restructuring. Fourth, it is hard for the IMF to impose, as precondition for loan conditionality, a coercive restructuring of private external debts: in previous crises, such private-sector defaults were triggered by the crisis rather than imposed externally. Fifth, there was a perception that even the financial pressures faced by private agents were in more of a liquidity rather than a solvency form, and thus government
financial support—in the form of liquidity and/or capital support or guarantees—for such private-sector agents was warranted. Indeed, in the current crisis financial pressures have been larger for private-sector agents than for sovereign ones.The bulk of the rollover risk was concentrated in the financial and the corporate sectors.Within this context, government support of such private agents was deemed necessary and desirable.27 Corporate sectors in emerging markets have been mostly affected because of the increased costs of financing and, in some instances, foreign exchange losses. And although access to external finance by sovereign borrowers has—to some extent— been restored, corporate access to credit continued to remain very limited into 2009.28 Some countries broadened their guarantees of bank debt to support the corporate sector, with a special focus on those linked to export markets. And some countries are propping up trade finance via a range of channels in attempts to maintain the flow of trade and contain the adverse effects on the real economy. So far, banks in Asia and Latin America appear to be more and more anxious about the quality of their loan books and are also reducing working capital financing to corporations. Another apprehension is that funding larger corporations will crowd out small- and medium-sized enterprises and new entrants.Thus, given the increased threats of largescale corporate failures and defaults, in addition to the possibility that a proportion of the losses in capital flows may be of a long-term nature, emerging markets should plan to implement the measures needed to deal with such possibilities.29
Conclusions Emerging markets were hit by the global the crisis at a time when their macroeconomic and financial fundamentals were far more robust than they had been during previous crises.Yet the financial tsunami resulted in spillover effects that were felt in these markets very rapidly, triggering the start of their own economic and financial downturn. In previous episodes, financial pressures in emerging markets had been triggered by macro and financial vulnerabilities internal to emerging markets. Since the current crisis began with a different scenario for emerging markets, which had improved fundamentals while shocks originated from the center of the global financial system, the policy responses were different as well. Such differences in policy responses—of international organizations and of particular countries—are in terms of magnitude and scale. Country-specific responses were facilitated by the improved fundamentals of emerging markets. Despite a sluggish economic recovery for both emerging markets and advanced economies, the recovery of emerging markets is expected to be more robust than that of advanced economies.The issue of financial stability will continue to be a priority for
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emerging markets as they become more cautious about the sequencing of financial sector liberalization, financial deepening,30 and financial development in general.
Notes 1 Truman 2009. 2 For further discussion of the effects of financial stress on economic activity, see La Caxia 2009. 3 For a comparison of world trade figures in goods and services for the years 2007–10, see World Bank 2009a: Chapter 1, p. 24, Figure 1.1. 4 Commodity price index figures can be seen in Figure 1.2 of World Bank 2009a, chapter 1, p. 26. 5 Kato 2009b. 6 Jara et al. 2009. 7 BIS 2009a. 8 Morrison 2009.
———. 2009b. “Fallout for the Emerging Market Economies.” BIS 79th Annual Report. Available at http://www.bis.org/publ/arpdf/ ar2009e5.pdf. BNP Paribas. 2009. “Flexible Credit Lines and Emerging Markets.” Available at www.rgemonitor.com/ redir.php?clid=13746&sid=1&tgid=0&cid=341280. Deutsche Bank Research. 2009. “Emerging Market Anti-Crisis Measures: Separating the Wheat from the Chaff.” Available at www.dbresearch.com/PROD/DBR.../PROD0000000000242794.P DF. Euromonitor. 2009. “The Global Financial Crisis: Eastern Europe and CIS Hit Hard.” Available at http://www.euromonitor.com/ The_global_financial_crisis_Eastern_Europe_and_CIS_hit_hard. IMF (International Monetary Fund). 2009a. Global Financial Stability Report: Responding to the Financial Crisis and Measuring Systemic Risks. Available at http://www.imf.org/external/pubs/ft/ gfsr/2009/01/index.htm. ———. 2009b. “IMF Overhauls Lending Framework.” Press Release No. 09/85. March 24. Available at http://www.imf.org/external/np/ sec/pr/2009/pr0985.htm. 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. 11 IIF 2009a. 12 For further discussion of emerging market economies’ external financing, see IFF 2009a. 13 IMF 2009a. 14 Kato 2009a.
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15 BNP Paribas 2009.
———. 2009c. “2009 to See Sharp Declines in Capital Flows to Emerging Markets, says IIF.” Press Release, January 27. Available at http://www.iif.com/press/press+90.php. Jara, A., R. Moreno, and C. E. Tovar. 2009. “The Global Crisis and Latin America: Financial Impact and Policy Responses.” BIS Quarterly Review. June. Available at http://www.bis.org/publ/qtrpdf/ r_qt0906f.pdf?noframes=1. Kato, T. 2009a. “The IMF’s Response to the Global Crisis.” Available at http://www.imf.org/external/np/speeches/2009/062509.htm.
16 IMF 2009b. 17 World Bank 2009b. 18 World Bank 2009b. 19 See World Bank 2009b for multilateral development banks’ planned 2009–11 financial response to the crisis. 20 The CMI initiative has the goal of establishing a network of bilateral swap arrangements among ASEAN+3 countries to deal with short-term liquidity difficulties and to aid the current international financial arrangements. 21 BIS 2009b.
———. 2009b. “The Global Economic and Financial Outlook and Challenges for Emerging Economies.” IMF Keynote Speech at the 21st Meeting of the Central Bank Governors’ Club, Kazakhstan, May 28–31. Available at http://www.imf.org/external/ np/speeches/2009/052809.htm. La Caxia. 2009. “From Subprime Mortgage Crisis to Global Recession: The Transmission to Emerging Economies.” Available at http://www.pdf.lacaixa.comunicacions.com/im/eng/ 200907box_eng.pdf. Morrison, W. M. 2009. “China and the Global Financial Crisis: Implications for the United States.” June. Available at http://fpc.state.gov/documents/organization/125931.pdf
22 Deutsche Bank 2009. 23 Deutsche Bank 2009.
RGE Monitor. 2009. “Global Economic Outlook: Q3 and Beyond.” July. Available at www.rgemonitor.com.
24 Less than a month after the collapse of Lehman Brothers, the currencies of Brazil and Mexico depreciated by almost 30 percent. See Jara et al. 2009.
Roubini, N. 2009. “Latvi’s Currency Crisis Is a Rerun of Argentina’s.” Available at www.rgemonitor.com/roubini-monitor/257052/ 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 www. rgemonitor.com/piie monitor/257209/the_global_financial_ crisis_lessons_learned_and_challenges_for_developing_countries.
26 A bail-out is an injection of capital to prevent a situation of bankruptcy, insolvency, or liquidation. 27 IMF 2009a. 28 World Bank 2009a. 29 Kato 2009b. 30 RGE Monitor 2009.
References 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.
World Bank. 2009a. Global Monitoring Report. Available at http://web.worldbank.org/WBSITE/EXTERNAL/EXTDEC/ EXTGLOBALMONITOR/EXTGLOMONREP2009/ 0,,contentMDK:22149019~enableDHL:True~menuPK:5924427~pa gePK:64168445~piPK:64168309~theSitePK:5924405,00.html. World Bank. 2009b. Global Development Finance 2009: Charting a Global Recovery. Available at http://web.worldbank.org/WBSITE/ EXTERNAL/EXTDEC/EXTDECPROSPECTS/EXTGDF/EXTGDF2009/ 0,,contentMDK:22218327~menuPK:5924239~pagePK:64168445~ piPK:64168309~theSitePK:5924232,00.html.
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CHAPTER 1.3
Financial Development, Financial Crises, and the Millennium Development Goals ERIK FEYEN, The World Bank
There is no doubt that financial development contributes to improving the lives of the poor by spurring economic growth and providing those living in poverty with more opportunities. It indirectly provides jobs and better wages, and can directly help people to take out loans to buy productive inputs such as fertilizer, or to start a business. Financial development also allows people to protect their money by using deposit accounts and to shield themselves against income shocks by means of insurance products, for example. Yet financial systems are at risk of financial crises, which can have devastating effects on the world’s most vulnerable people and can sometimes even reverse developmental progress made in better times. Although a crisis has a differential impact on the poor, the weakest members of society are often at the highest risk of falling into a poverty trap as a result of unemployment; rising food prices; eroding savings; and failing delivery of core public services such as social welfare, healthcare, and education.This trap can lead to long-term developmental and economic losses. However, despite the current global financial crisis, financial development should not necessarily be limited. In fact, countries that have experienced occasional financial crises have, on average, grown faster than countries with stable financial conditions because financial systems encourage healthy risk taking.1 Therefore, it is important to guard against excessive long-term government intervention in financial systems and against rising financial and trade protectionism, which have both been shown to be detrimental to economic growth. Indeed, many good initiatives are already underway to improve the world’s financial architecture. However, the current crisis has brought to the fore once again the realization that developing countries need to strengthen their safety nets and plan their crisis intervention scenarios to protect the weakest in a timely, targeted, and cost-effective manner.
The bright side of finance In September 2000, 189 countries unanimously adopted the United Nations’ Millennium Declaration.This Declaration lays out eight social development objectives— the Millennium Development Goals (MDGs)—to be achieved in 2015 (Figure 1).2 This chapter focuses mainly on those goals in the areas of poverty, education, health, and gender equality. Many policy actions—such as those aimed at improvements in infrastructure, the business environment, and public services—can contribute to achieving the MDGs. Often the financial sector plays a facilitating role in raising the capital to finance these improvements. But
The author would like to thank Thorsten Beck, Stijn Claessens, Consolate Rusagara and Constantinos Stephanou for helpful discussions and/or comments.
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Figure 1: The Millennium Development Goals and targets
1. Halve proportion of people who live on <$1 a day
Poverty
1. Eradicate extreme poverty and hunger
Education
2. Achieve universal primary education
3. Access to complete primary schooling
3. Promote gender equality and empower women
4. Access for all genders to primary and secondary schooling (2005) and all levels of education (2015)
4. Reduce child mortality
5. Reduce by 2/3, the under-five mortality rate
5. Improve maternal health
6. Reduce by 3/4, the maternal mortality ratio
Gender Equality
MILLENNIUM DEVELOPMENT GOALS
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Health
2. Halve proportion of people who suffer from hunger
7. Halt and begin to reverse the spread of HIV/AIDS
6. Combat HIV/AIDS, malaria, and other diseases
8. Halt and begin to reverse the incidence of malaria and other diseases
9. Integrate principles of sustainable development
Environment
7. Ensure environmental stability
10. Access to safe drinking water and sanitation 11. Improve lives of at least 100 million city dwellers
38 12. Develop trading and financial system 13. Address needs of least developed countries
Global Partnership
14. Address needs of landlocked countries and islands
8. Develop a global partnership for development
15. Deal with debt problems and make sustainable 16. Provide decent and productive work for youth 17. Provide access to affordable and essential drugs 18. Availability of new technology and ICTs
Focus of this article
Source: World Bank MDG website (2006); author’s analysis.
there are several other channels through which financial development contributes to the advancement of the tightly interlinked MDGs.3 Indirect benefits of finance-induced economic growth
A large literature shows that during normal times, both developed and developing countries with healthy banking and capital markets enjoy stronger per capita income growth than countries without such markets because they are able to allocate more of society’s savings to superior investment opportunities and also able to distribute and manage risks better.4 One study estimates that if India’s financial development—as measured by the ratio of bank credit to the private sector as a fraction of GDP—had been at the average level of developing
countries over the period 1960–95, it would have enjoyed a boost to income per capita growth of 0.6 percentage points per year.5 In addition to the role played by domestic financial development in achieving the MDGs, international financial integration can also contribute to growth by allowing capital-constrained countries to tap into cheaper foreign savings, especially if capital comes in the form of longer-term investments and is supported by sound macroeconomic and fiscal frameworks. For example, economic and domestic credit growth in many developing countries has benefited from the large net private capital flows that reached over a trillion US dollars in 2007, amounting, for some countries, to almost 8 percent of GDP. However, the capital flows also left
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Figure 2: The bright side: How development of the financial sector helps in attaining the MDGs
Direct effects of access to the financial system: Credit Savings Insurance Payments
Investment opportunities to increase productivity
SHORT-TERM EFFECTS
LONG-TERM EFFECTS
Poverty and inequality reduction
Improvements in health, education, and gender equality goals
Consumption smoothing Ease transactions Safeguard savings More job opportunities Higher wages
Indirect effects of general economic growth
More business opportunities
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Public investment in • education • healthcare • infrastructure
many countries vulnerable, as discussed in the section on the dark side of finance. Formal financial development not only spurs growth, but it is also especially pro-poor. Recent studies show that financial development results in fewer people living in poverty, since the poor indirectly benefit from economic growth from the subsequent increase in job and business opportunities and real wages, as well as from investment in core healthcare and educational infrastructure (see Figure 2).6 In addition, research finds that financial development leads to faster income growth for the poor than for the average person; that is why it reduces inequality. One study suggests, for example, that the average real income of the poor in Brazil would have grown at more than 1.5 percent annually instead of 0 percent over the period 1960–99 if Brazil had had the same level of financial development as Korea.7 Economic growth and poverty alleviation have been shown to have beneficial effects on other areas, including child mortality, nutrition, and schooling. In this way, financial development contributes indirectly to other MDGs (see Figure 1). Benefits of direct access to the financial system
Financial development can also help the poor by leveling the playing field. Direct access to the financial system helps people to better plan for their future, improve their diets, access healthcare, start a business, and provide their children with an education (Figure 2). Examples of ways the poor benefit from different types of financial
services, which are better accessible when the financial sector is more developed, are: • Credit for investments. Affordable credit gives households and entrepreneurs the opportunity to improve their productivity by investing basic assets such as in tractors, seeds, healthcare, or an education—all of which contribute to future poverty reduction. In particular, credit becomes more accessible for the poor when financial development comes with the opportunity to use their land as collateral. Evidence also suggests that access to credit has a large impact on hunger alleviation.8 Moreover, to the extent that a more developed financial sector cares only about the quality of an investment opportunity, talent is more important than family wealth, gender, or the ethnicity of the prospective borrower, thus helping to level the playing field. • Savings, insurance, and consumer credit. Savings services often provide the poor with more attractive returns than those obtained by investing in low-yielding livestock or in jewelry or cash that is at risk of theft, fire, or floods. In addition, savings, insurance, and consumer credit services can help households smooth their income between harvests and reduce the impact of shocks such as job loss, drought, sickness, and death of a family member. For example, weather insurance in Malawi helps farmers cope with adverse weather conditions and avoid hunger and inefficient sale of productive assets.
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Similarly, microinsurance programs in countries such as Nigeria have helped low-income households to access basic health services, including HIV/AIDS treatment. • Payment services. Payment services provided by the financial system are safer, cheaper, and easier than the traditional transfer methods used by the poor, which are often cash based.These services cut out expensive middlemen, reduce traveling costs, encourage transactions between parties unfamiliar with each other, and facilitate remittance flows that in many developing countries represent a significant portion of a household’s income. For example, the M-PESA system in countries such as Kenya enables users to transfer funds via mobile phones.9 Empirical analysis also supports the existence of direct links between access to the formal financial system for the poor and other MDGs besides poverty reduction. For example, one study shows that income shocks in Tanzania lead to fewer increases in child labor when households have better access to credit.10 In addition, there is evidence that the incidence of child labor is lower in countries with better-developed financial systems.11 Another study shows that Peruvian households that face lower borrowing constraints experience higher primary school attendance.12 And there is abundant anecdotal evidence that the microfinance movement can help the MDGs, especially the empowerment of women.13 Microlending has increased women’s earning capacity and “say” in their households, allowing them to take their futures into their own hands.14
The dark side of finance However, although the poor benefit disproportionately from financial development, they also tend to suffer disproportionately from financial crises because they are less able to insulate themselves against shocks than wealthier people. Note that typically the poor in wealthier countries are wealthier. In addition, wealthier countries have a better capacity absorb the shock. The fragility of financial systems
Financial systems are inherently fragile because they spur growth by transforming liquid savings into longterm investments that promise a return in an uncertain future. Some bankruptcies, job loss, and even an occasional crisis can be a sign of healthy risk taking by providers of capital.15 However, fragility has often been further exacerbated by large inflows of volatile foreign capital, weak institutional arrangements, and irresponsible macroeconomic policy.This undermines the growth-enhancing function of the financial system and can lead to public mistrust. During crises, this fragility can induce adverse solvency
and liquidity spirals that lead to a credit crunch with negative spillover effects to the real sector. And although credible currency pegs can help restore economic confidence and reduce inflation in a developing country, they can also suddenly become vulnerable to a run. Thus it is no wonder that systemic financial crises have been pervasive: during the period 1970–2000, about 100 major currency, sovereign debt, and banking crises were registered in emerging and developing markets.These crises can come at great economic costs in the form of (quasi)-fiscal expenditures, output drops, and long recovery times. For example, GDP contracted by 14 percent, 8 percent, and 6 percent, respectively, during the crises in Indonesia (1998), Malaysia (1998), and Mexico (1995). Overall, analysis suggests that during the average crisis GDP contracts by 1.4 percent.16 How financial crises affect the poor
No two crises are the same, and specific circumstances ultimately determine how an economy is affected. Moreover, a crisis affects the various participants in an economy differently and can produce both winners and losers, even among the poor. For example, poor farmers can actually benefit from high food prices, while the urban poor suffer.That said, a financial crisis likely has a net negative effect on the most vulnerable people through a combination of the following private- , public- , and financial-sector channels:17 • Lower income through employment shocks. The negative interaction between the financial sector and the real economy slowdown triggers 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 decline by almost 40 percent. As a consequence, the poor can be forced to take pay cuts, work fewer hours, or seek (informal) employment elsewhere— which can involve high relocation costs, often to rural areas where labor market pressures rise further as a result. On average, unemployment increases by 1.4 percent during the crisis.18 Experience with previous crises indicates that it takes at least four to five years for employment to return to pre-crisis levels after economic recovery starts. • Potentially higher costs caused by relative price changes. A weakening currency boosts import prices, particularly of imported foods.This hurts the urban poor, especially, although some groups—such as poor farmers, for example—can actually benefit from high food prices, as was the case in Indonesia. In addition, currency depreciations provoke a disruption in the labor dynamics between the tradable and nontradable sectors and can increase the debt burden of governments and
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companies with foreign currency liabilities, further depressing employment and increasing prices. • Erosion of savings. Crisis-induced inflation can hit the poor harder than other groups since they often hold their savings in cash and have few alternatives that provide protection for their savings. In previous crises, inflation rose by 92 percent during the crisis relative to before.19 Furthermore, research shows that low-income and middle-class households in Latin America with bank savings suffered more because deposit freezes prevented them from accessing their savings to cushion the shock, while larger depositors typically had already pulled out their money.20 The poor also saw their savings evaporate because of pesofication (as in Argentina, in 2001) or dollarization at unfavorable rates (in Ecuador, in 1998).This can have long-term effects on trust in the financial system.This was seen in Argentina, for example, where post-crisis deposit levels were much lower for many years than before the crisis. • Decreased access to finance. Troubled banks might need to hoard liquidity or are willing to lend only to their safest clients when their funding dries up and the quality of their portfolios deteriorates.This means that smaller firms can see their access to finance further squeezed, making it harder for them—and indirectly for the poor, who are employed by them—to cope with the shock. Similarly, households will face more constrained access to finance as banks tighten their credit standards. • Decrease in public spending. With economic and trade decline, governments will see their tax revenues decrease. Simultaneously, government’s (contingent) liabilities can spike because of bank recapitalizations, asset restructuring, and the issuance of blanket guarantees. And as their fiscal position worsens and the currency weakens, their debt burden increases while access to international financial markets decreases significantly. As a consequence, governments with little fiscal adjustment space need to cut back on core spending such as infrastructure, which has short-term labor market effects and longterm economic growth effects. In addition, the poor can be particularly hard hit through budget cuts to social welfare plans, public health services, and education, exactly at the time when they need access to these public services the most. For example, absolute health expenditures declined in Indonesia, Malaysia, and Thailand during the East-Asian crisis. During the 1994 Mexican peso crisis, the government cut spending on education by about 15 percent.
Financial crises, poverty, and poverty traps
Since the (near) poor are less able to cope with shocks than those who are better off, poverty—defined by the number of people who live under 1 (or 2) dollars a day— has risen in virtually all financial crises. For example, during the East-Asian crisis, overall poverty rose from 11 to 18 percent in Indonesia; in Korea, urban poverty rose from 9 to 18 percent. Past trends in developing countries suggest that 20 million people sink into poverty for each percentage point decline in the growth rate. The temporary income shocks of crises can create long-term poverty traps, particularly for the poorest in developing countries. Research suggests, for example, that 50 percent of Indonesia’s poverty in 2002—when the macroeconomic situation had already recovered— can be attributed to the crisis that occurred in 1998. And one study argues that if Latin America had reached the macroeconomic stability levels of industrial countries, it could have prevented or reduced the impact of the crisis and contributed to economic growth that would have lifted 25 percent of the poor in the region out of poverty.21 The reason for this long-term impact is that even a small shock can push households over the edge, forcing them to sell off productive assets such as land and livestock, economize on food and healthcare, and pull their children out of school to make ends meet.This can have irreversible negative effects on human capital and longterm household productivity, which can ultimately depress economic growth. Thus, financial crises can endanger progress toward attaining the MDGs, or even trigger a reversal in the process (see Figure 3). Crises can induce negative feedback loops between poverty and other MDGs against which the poor can hardly insure themselves, particularly when whole communities are affected simultaneously: • Health. Research shows that countries that experienced output drops of over 10 percent had more than 1 million additional infant deaths. In Mexico, infant and preschool mortality rose in the 1980s after the crisis there, reversing the trend of the 1970s.22 In Peru, the crisis coincided with a large spike in infant mortality, which rose from 50 to 75 per 1,000 children born.23 During Indonesia’s crisis in 1997, the use of health facilities dropped dramatically as prices rose and stock shortages became pervasive.24 • Nutrition. Nutrition is essential for children’s cognitive and physical development, and malnutrition can have life-long negative effects.25 Malnutrition also typically increases during a crisis. For example, daily protein intake per person dropped by 4 percent and 3 percent, respectively, during Argentina’s (1995) and Venezuela’s (1994) crises.26 Teachers in Indonesia and the Philippines during the East-Asian
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Figure 3: The dark side: How a financial crisis affects the MDGs
FINANCIAL, PRIVATE- , AND PUBLIC-SECTOR SHOCKS
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Income loss • Job loss • Fewer hours • Lower wages
POTENTIAL POVERTY TRAPS Short-term effects
Long-term effects
• Poverty increase • Poorer nutrition • Underinvestment in health and education
Regression of health, education, and gender equality
Higher costs • Food prices • Relocation costs
Savings erosion • Inflation • Deposit erosion
Decreasing financial sector access • Less opportunity to smooth consumption for SMEs • Less opportunity to smooth consumption for households Adverse effects on core public spending • Less funding available for public health programs • Less funding available for education support programs
42
crisis complained that children were eating much less and were less able to concentrate.27 • Education. Children’s education affects their productivity as adults. However, in Thailand’s crisis, children were forced to find food on garbage sites to support their families instead of going to school.28 Research suggests that gross secondary enrollment in Mexico would have been 11 percentage points higher in 1991 if the economy had grown in the 1980s instead of remaining stagnant after the 1982 crisis.29 The Indonesia Family Life Survey recorded a decline in enrollment and an increase in dropouts during the crisis. • Gender equality. Often girls are the first to be pulled out of school, and women are among the first to lose their jobs in a crisis.These consequences can widen the gender gap over the long term. Another manifestation of gender inequality is seen in one sobering study on child mortality in developing countries, which estimates that a large GDP contraction results in an average increase in girl infant mortality of 7.4 deaths per 1,000 births, while the increase of boy mortality is 1.5 per 1,000.30
The impact of the current global financial crisis The financial crisis that started in developed economies and plunged them into recession has now spread around the globe to developing countries.31 The impact is reflected in sharp drops in average economic growth of developing countries to 1.6 percent, down precipitously from an average of over 8 percent in 2006–07.The shock comes on top of the effects of the 2007–08 spike in oil and food prices that had already left many countries vulnerable and pushed as many as an additional 200 million people into poverty. The crisis has triggered unprecedented policy actions around the world. Among these are liquidity provision facilities between countries, bank capital injections, the extension of deposit insurance schemes, and the issuance of government guarantees on other financial sector liabilities.The crisis has clearly shown that rethinking the financial architecture is necessary, and much has already been written on this topic.32 Clearly, the global financial crisis will have far-reaching policy consequences as necessary improvements are implemented in the areas of financial supervision, regulation, and market infrastructure. Channels of transmission to developing countries
Some emerging countries had unsustainable macroeconomic policies and financed credit booms with foreign capital that left them exposed to a sudden deterioration
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in international financial markets. In contrast, many other developing countries were not affected by firstround effects since they have underdeveloped financial markets with little exposure to troubled assets in developed countries. However, second-round effects are transmitted through financial and real channels whose intensities and feedback loops depend on specific country conditions.The poorest countries with large current account deficits and little fiscal space will be less able to absorb shocks because of the following factors:
for developing economies that derive revenues and foreign exchange predominantly from a small export base—they will see their budgets shrink while their current accounts deficits rise. How the poor are affected
• Global trade, tourism, and commodity prices drop. With the global economic slowdown and depressed demand from developed countries, including tourism, vulnerable countries are less likely to pursue a path of export-driven recovery, as happened after the East-Asian crisis. Commodity and oil exporters in developing countries have undiversified economies and will suffer because volumes and prices have dropped precipitously. And, with an economic decline, credit quality deteriorates, thus putting further pressure on the financial system and foreign investors.
The current financial crisis is particularly deep and has shown the interconnectedness of global markets and institutions, reflecting financial globalization and the importance of capital flows.The country-level shocks mentioned above will mainly feed through to the poor via mechanisms similar to those seen in past crises: employment effects, relative price changes, and reduction in public spending, as discussed previously. However, the global nature of the crisis will make recovery based on external financial and trade links much more difficult.This puts more pressure on governments to boost domestic demand, although some countries have little room to do so because they face increasing external financing and fiscal difficulties. Another important factor in the current crisis that hits the poor directly—and government revenues indirectly—is the major decline in remittances that usually act as a stabilizer during economic volatility. Global remittances reached over US$300 billion in 2008 and are the most important source of revenue for some countries, trumping private capital flows and exports. However, as foreign workers in the United States, Western Europe, the Gulf Cooperation Council countries, and Russia face labor market difficulties, their remittances have fallen; some workers are even forced to repatriate, putting additional pressure on local labor markets. Several international organizations have projected the effects of the global financial crisis on the poor and the MDGs. And their estimates indicate that the development consequences of the crisis are enormous.The International Labour Organization expects 55 to 90 million additional people to fall into poverty in 2009, and as many as 50 million further people will lose their jobs. East Asia and Africa will feel the setback most.The World Bank estimates that the economic slowdown will likely result in 200,000 to 400,000 infant deaths per year. The Food and Agricultural Organization projected that 200 million more people will suffer from hunger because of the financial crisis.33 And although food prices have come down during the financial crisis—they were high because of the food crisis that happened before the financial crisis—they are likely to remain at elevated levels and will aggravate other crisis effects on the poor.
• Foreign aid is reduced and more volatile. Foreign aid represents about 7 percent of GDP on average for low-income countries, but is often higher in some. Now that developed countries are in recession, it is likely that they will economize on their development assistance.This is bad news
Concluding remarks Financial development is a force for good—a fact that can be easily forgotten in the midst of a crisis.Therefore it is important to pursue policies that encourage financial development and avoid those that lead to excessive
• Domestic financial markets deteriorate because of spillovers from the loss of liquidity and solvency. Tight international funding markets and the global economic slowdown have put domestic financial sectors and currencies in some countries under pressure and revealed home-grown weaknesses.This will have negative spillover effects on the real domestic economy, potentially affecting people’s savings.The presence of foreign banks might become another channel transmitting liquidity and solvency problems as they curb credit while their parent banks face difficulties at home. • Capital flows recede and investment declines. As liquidity dried up in developed countries and deleveraging gained pace, foreign investors started to pull out their capital.This was further exacerbated by increased currency volatility and weaknesses in debt workout and restructuring frameworks. As a consequence, some host countries face debt-servicing problems and growing external financing gaps.The World Bank estimates that 98 of 104 developing countries will experience severe external financing problems.This is particularly problematic for large (infrastructure) projects, and it thwarts employment and future growth.
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long-term intervention in systems or those that increase protectionism. And although the changes to financial-sector policies should strengthen financial systems, these systems will remain inherently fragile and future financial crises will occur. International organizations such as the World Bank and the International Monetary Fund can play a role in helping governments cope with the crisis and avoid poverty traps that can have lasting and damaging effects on economic growth and the MDGs. In addition, countries should strengthen their safety nets and pro-poor policies before a crisis hits.These contingency plans should be comprehensive and include public work programs, food for education programs, and targeted conditional cash transfers for schooling, healthcare, and food. Prior planning will make continued delivery of core social services during crises much more likely, as past experience has shown that ad hoc improvisations in the heat of the crisis are often much less effective or even have adverse effects on the poor because they are poorly administered or even abused. Moreover, previous crises have also shown that distributive political conflicts can significantly reduce public spending programs specifically targeted to the poor, putting them even more at risk when they need support the most. But well-thought-out safety nets and crisis policies might cost as little 1 percent of GDP,34 and would do much to mitigate the worst effects of a crisis.
Notes 1 Ranciere et al. 2008. 2 See also the United Nations’ The Millennium Development Goals Report 2009. 3 See Claessens and Feyen 2006a for an overview of the impact of financial sector development on the Millennium Development Goals. 4 See Levine 2005 and Demirgüç-Kunt and Levine 2008 for an overview of the academic finance and growth literature. 5 Beck et al. 2000. 6 See, for example, Beck et al. 2007. 7 See Demirgüç-Kunt and Levine 2009 and Claessens and Perotti 2007 for an overview of the links between finance and inequality. 8 Claessens and Feyen 2006b. 9 See Rosenberg 2008. 10 Beegle et al. 2003. 11 Dehejia and Gatti 2002. 12 Jacoby 1994. 13 For examples and case studies of the links among microfinance, poverty, and the Millennium Development Goals, see Morduch and Haley 2002 and Littlefield et al. 2003.
19 Baldacci et al. 2002. 20 Halac and Schmukler 2004. For a discussion on banking crises and inequality, see also Honohan 2005. 21 Lustig 2000. 22 Lustig 2000. 23 Lustig 2000. 24 Frankenberg et al. 1999. 25 See, for example, Ferreira and Schady 2008, which also studies the impact of shocks on educational attainment. 26 Lustig 2000. 27 World Bank 1998, Chapter 5. 28 World Bank 1998, Chapter 5. 29 Lustig 2000. 30 Baird et al. 2007. 31 Many reports about the impact of the financial crisis have been written recently, from which most numbers in this section are drawn. These publications include IMF 2009; World Bank 2008, 2009a; 2009b; and United Nations 2009a. 32 For a short overview, see for example Stephanou 2009. 33 World Bank 2009a. 34 Lustig 2000.
References Baird, S., J. Friedman, and N. Schady. 2007. “Aggregate Income Shocks and Infant Mortality in the Developing World.” World Bank Policy Research Working Paper 4346. Washington, DC: World Bank. Baldacci, E., L. de Mello, and G. Inchauste. 2002. “Financial Crises, Poverty, and Income Distribution.” IMF Working Paper 02/4. Washington, DC: IMF. Beck, T., A. Demirgüç-Kunt, and R. Levine. 2007. “Finance, Inequality, and the Poor.” Journal of Economic Growth 12 (1): 27–49. Beck, T., R. Levine, and N. Loayza. 2000. “Finance and the Sources of Growth.” Journal of Financial Economics 58 (1–2): 261–300. Beegle, K., R. Dehejia, and R. Gatti. 2003. “Child Labor, Income Shocks and Access to Credit.” World Bank Policy Research Working Paper 3075. Washington, DC: World Bank. Claessens, C. and E. Feyen. 2006a. “Financial Sector Development and the Millennium Development Goals.” World Bank Policy Research Working Paper 89. Washington, DC: World Bank. ———. 2006b. “Finance and Hunger: Empirical Evidence of the Agricultural Productivity Channel.” World Bank Policy Research Working Paper 4080. Washington, DC: World Bank. Claessens, C. and E. Perotti. 2007. “The Links between Finance and Inequality: Channels and Evidence.” World Bank mimeo. Dehejia, R. H. and R. Gatti. 2002. “Child Labor: The Role of Income Variability and Access to Credit in a Cross Section of Countries.” World Bank Policy Research Working Paper 2767. Washington, DC: World Bank. Demirgüç-Kunt, A. and R. Levine. 2008. “Finance, Financial Sector Policies, and Long-Run Growth.” World Bank Policy Research Working Paper 4469. Washington, DC: World Bank. ———. 2009. “Finance and Inequality: Theory and Evidence.” Annual Review of Financial Economics, 1, forthcoming.
14 Jacoby 1994. 15 Ranciere et al. 2008. 16 Baldacci et al. 2002. 17 For an overview of ways a financial crisis impacts the poor, see, for example, Baldacci et al. 2002 and Fallon and Lucas 2002. 18 Baldacci et al. 2002.
Fallon, P. and R. Lucas. 2002. “The Impact of Financial Crises on Labor Markets, Household Incomes, and Poverty: A Review of the Evidence.” World Bank Research Observer 17 (1): 21–45. Ferreira, F. and N. Schady. 2008. “Aggregate Economic Shocks, Child Schooling and Child Health.” World Bank Policy Research Working Paper 4701. Washington, DC: World Bank.
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Frankenberg, E., D. Thomas, and K. Beegle. 1999. “The Real Costs of Indonesia’s Economic Crisis: Preliminary Findings from the Indonesia Family Life Surveys.” RAND paper DRU-2064NIA/NICHD. Halac, M. and S. Schmukler. 2004. “Distributional Effects of Crises: The Financial Channel.” Economia 5 (1): 1–67. Honohan, P. 2005. “Banking Sector Crises and Inequality.” World Bank Policy Research Working Paper 3659. Washington, DC: World Bank. IMF (International Monetary Fund). 2009. The Implications of the Global Financial Crisis for Low-Income Countries. Washington, DC: IMF. Jacoby, H. 1994. “Borrowing Constraints and Progress through School: Evidence from Peru.” Review of Economics and Statistics 76 (1): 151–60. Levine, R. 2005. “Finance and Growth: Theory and Evidence.” In Handbook of Economic Growth, ed. P. Aghion and S. Durlauf. The Netherlands: Elsevier Science. Littlefield, E., S. Hashemi, and J. Morduch. 2003. “Is Microfinance an Effective Strategy to Reach the Millennium Development Goals?” Focus Note 24. CGAP.
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Lustig, N. 2000. “Crises and the Poor: Socially Responsible Macroeconomics.” Economia 1: 1–30. Morduch, J. and B. Haley. 2002. “Analysis of the Effects of Microfinance on Poverty Reduction.” NY Wagner Working Paper No. 1014. June 28. Prepared for the Canadian International Development Agency. Ranciere, R., A. Tornell, and F. Westermann. 2008. “Systemic Crises and Growth.” Quarterly Journal of Economics 123 (1): 359–406. Rosenberg, J. 2008. “Why Has M-PESA Become so Popular in Kenya?” CGAP. June 17. Available at http://technology.cgap.org/2008/06/17 /why-has-m-pesa-become-so-popular-in-kenya/. Stephanou, C. 2009. “The Reform Agenda: Charting the Future of Financial Regulation.” World Bank Crisis Response Policy Brief 2. Washington, 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. ———. 2009b. The Millennium Development Goals Report 2009. Available at http://www.un.org/millenniumgoals/. World Bank. 1998. “East Asia: The Road to Recovery.” World Bank mimeo. Washington, DC: World Bank. ———. 2008. Weathering the Storm: Economic Policy Responses to the Financial Crisis. Washington, DC: World Bank. Available at http://siteresources.worldbank.org/NEWS/Resources/ weatheringstorm.pdf. ———. 2009a. Global Monitoring Report 2009: A Development Emergency. Washington, DC: World Bank. ———. 2009b. “Swimming against the Tide: How Developing Countries Are Coping with the Global Crisis.” Background paper prepared for the G-20 Finance Ministers and Central Bank Governors Meeting, Horsham, United Kingdom, March 13–14.
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Part 2 Country/Economy Profiles
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How to Read the Country/Economy Profiles
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How to Read the Country/Economy Profiles
The Profiles section presents a four-page profile for each of the 55 economies covered by The Financial Development Report 2009.
Argentina Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................39.7
US$ bn
27.7%
GDP (US$ billions), 2008 .........................................................326.5
47.0%
GDP (current prices) per capita, 2008 ..............................8,214.1 GDP (PPP) as share (%) of world total, 2008 ........................0.83 18.7%
Average rate of real GDP growth (%), 2004–08....................8.46
■ Public debt securities .......147.2 ■ Private debt securities........20.6 ■ Banking deposits .................58.4 ■ Equity securities ..................86.7 Total
312.9
6.6%
Page 1 Key indicators
Total/GDP: 120.2%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................51 2.8 1
The first section of each Country/Economy Profile presents a selection of key indicators: • Population, GDP, and related data come from the International Monetary Fund’s World Economic Outlook Database of April 2009. Financial assets by major type, 2007
• Public debt figures are from the Economist Intelligence Unit’s CountryData Database, as accessed in March 2009. Private debt data come from the Bank of International Settlements Quarterly Review, September 2009. Data on banking deposits are from the IMF International Financial Statistics database, electronic version, accessed September 2009 or the June 2009 PDF version. Equity securities data were downloaded from the market capitalization dataset on the World Bank’s World Development Indicators database in August 2009. • The four financial asset indicators (public and private debt securities, banking deposits, and equity securities) are added to measure total financial assets in the Index economies.The share of depth attributable to each component is displayed in the pie chart. Percentages displayed may not add to 100 percent because of rounding. Private debt data were not available for Bangladesh or Jordan. • The total financial assets data are shown as a percentage of GDP, using the GDP figure from the Key indicators section. • The pie chart shows the share of total financial assets attributable to each of the four types of financial asset indicators in a given economy.
2
3
4
5
6
7
Factors, policies, and institutions 1st pillar: Institutional environment .........................................50
3.2
Financial sector liberalization ....................................................46 Corporate governance.................................................................45 Legal and regulatory issues .......................................................54 Contract enforcement..................................................................43
2.7 4.1 2.5 3.7
2nd pillar: Business environment .............................................44
3.8
Human capital ...............................................................................27 Taxes...............................................................................................54 Infrastructure ................................................................................35 Cost of doing business ................................................................40
4.3 2.6 3.6 4.7
3rd pillar: Financial stability......................................................53
3.7
Currency stability..........................................................................24 Banking system stability..............................................................48 Risk of sovereign debt crisis ......................................................52
4.4 4.0 2.5 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................42
2.8
Size index.......................................................................................47 Efficiency index.............................................................................54 Financial information disclosure..................................................2
1.5 2.7 5.6
5th pillar: Non-banking financial services .............................28
2.3
IPO activity.....................................................................................42 M&A activity..................................................................................46 Insurance .......................................................................................38 Securitization...................................................................................6
1.6 1.3 1.9 4.3
6th pillar: Financial markets......................................................49
1.4
Foreign exchange markets .........................................................43 Derivatives markets....................................................................n/a Equity market development ........................................................54 Bond market development..........................................................32
1.0 n/a 1.2 2.0 1
49
Financial access 7th pillar: Financial access........................................................54
2.2
Commercial access......................................................................55 Retail access.................................................................................41
2.5 2.0 1
2
3
4
5
6
7
OUTPUTS
Financial Development Index
This section details the economy’s performance on the various components of the Financial Development Index (FDI). At the top is the country’s overall rank out of 55 economies, its score on the 1-to-7 scale, and a graphical representation of the score. Below, the seven pillars of the Index are organized by category.The three categories—factors, policies, and institutions; financial intermediation; and financial access—are displayed according to their role in the continuum of the financial system from inputs to outputs. Each pillar and subpillar is listed under the appropriate category. After the pillar or subpillar name, the first column shows each economy’s rank for that pillar or subpillar among the 55 economies included in the Index.The second column presents the score for that pillar or subpillar on the 1-to-7 normalized scale. On the right, the normalized score is represented graphically. For more information on the methodology and results of the FDI, please refer to Chapter 1.1 of this Report.
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Argentina
The Financial Development Index in detail
This page presents the rank achieved by a country on each of the indicators entering the composition of the FDI. Indicators are organized by pillar. Please refer to Appendix A of Chapter 1.1 for a detailed structure of the FDI. Next to the rank, a colored square indicates whether the indicator constitutes an advantage (blue square) or a disadvantage (gray square) for the country. In order to identify variables as advantages or disadvantages, the following rules were applied:
Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–0.8 Commitments to WTO agreement on trade in services.......39 .....■ ...............43.5 Domestic financial sector liberalization .................................36 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey ..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................33 .....■ .................4.4 Efficacy of corporate boards .................................................48 .....■ .................4.3 Reliance on professional management .................................33 .....■ .................4.7 Willingness to delegate.........................................................39 .....■ .................3.9 Strength of auditing and reporting standards........................50 .....■ .................3.9 Ethical behavior of firms........................................................52 .....■ .................3.2 Protection of minority shareholders’ interests......................50 .....■ .................3.7 Official supervisory power ....................................................20 .....■ ...............11.0 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................41 .....■ .................2.7 Centralization of economic policymaking ..............................54 .....■ .................1.6 Regulation of securities exchanges ......................................48 .....■ .................4.1 Property rights.......................................................................53 .....■ .................2.9 Intellectual property protection .............................................53 .....■ .................2.5 Diversion of public funds.......................................................54 .....■ .................2.2 Public trust of politicians .......................................................55 .....■ .................1.5 Corruption perceptions index ................................................44 .....■ .................2.9 Strength of legal rights index ................................................39 .....■ .................4.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................54 .....■ .................2.0 Judicial independence ...........................................................53 .....■ .................2.4 Irregular payments in judicial decisions ................................50 .....■ .................2.8 Time to enforce a contract ....................................................37 .....■ .............590.0 Number of procedures to enforce a contract .......................33 .....■ ...............36.0 Strength of investor protection .............................................43 .....■ .................4.7 Cost of enforcing contracts...................................................14 .....■ ...............16.5
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
• For those economies ranked in the top 10 in the overall FDI, individual variables ranked between 1 and 10 are considered to be advantages. Any variables below 10 are considered to be disadvantages. For instance, in the case of Switzerland, which is ranked 7 overall, its 5th rank in the variable Bank deposits to GDP makes this variable a competitive advantage, whereas Foreign exchange derivatives turnover: Currency swaps, on which it ranks 24th, constitutes a competitive disadvantage for the country.
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• For those economies ranked from 11 to 27 in the overall FDI, variables ranked equal to or higher than the economy’s overall rank are considered to be advantages. Any variables ranked lower than the economy’s overall rank are considered to be disadvantages. In the case of Malaysia, ranked 22nd overall, its 10th rank in the variable Bank deposits to GDP makes this variable a competitive advantage, whereas Foreign exchange derivatives turnover: Currency swaps, on which it ranks 30th, constitutes a competitive disadvantage for the country. • For those economies ranked lower than 27 in the overall FDI, any individual variables ranked 27 or higher are considered as advantages. Any variables ranked 28th or lower are considered to be disadvantages. For Argentina, ranked 51st overall, its rank of 19 in Relative value-added of insurance constitutes a competitive advantage for the country, whereas its 52nd rank in the variable Bank deposits to GDP makes this variable a competitive disadvantage. • After the advantage/disadvantage marker is the raw score of the listed indicator for the profiled economy. For more information on the significance of the raw score, such as the units in which it is measured or the source, please see the data tables in Part 3 of this Report.
2.05 2.06
Human capital Quality of management schools ...........................................19 .....■ .................5.1 Quality of math and science education.................................44 .....■ .................3.3 Extent of staff training...........................................................43 .....■ .................3.7 Local availability of specialized research and training services .............................................................38 .....■ .................4.2 Brain drain and ease of hiring foreign labor ..........................35 .....■ .................4.0 Tertiary enrollment ................................................................14 .....■ ...............63.8
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................49 .....■ .................2.8 Distortive effect on competition of taxes and subsidies ......54 .....■ .................2.3 Marginal tax variation ............................................................53 .....■ ...............32.2 Time to pay taxes ..................................................................44 .....■ .............453.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................47 .....■ .................3.2 Quality of telephone infrastructure .......................................45 .....■ .................5.5 Internet users ........................................................................35 .....■ ...............25.9 Broadband Internet subscribers ............................................30 .....■ .................6.6 Telephone lines .....................................................................32 .....■ ...............24.0 Mobile telephone subscribers...............................................28 .....■ .............102.2
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
(Cont’d.)
• In the gray box at the right of the profile is the name and raw score for the top-ranked economy of the given indicator. For indicators in which there is a tie for the top rank, the word “Multiple” appears with the number of economies that share that score in parentheses.
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List of Countries/Economies
Part 1.r3
List of Countries/Economies
Country/Economy
Page
Country/Economy
Page
Argentina
52
Poland
204
Australia
56
Russian Federation
208
Austria
60
Saudi Arabia
212
Bahrain
64
Singapore
216
Bangladesh
68
Slovak Republic
220
Belgium
72
South Africa
224
Brazil
76
Spain
228
Canada
80
Sweden
232
Chile
84
Switzerland
236
China
88
Thailand
240
Colombia
92
Turkey
244
96
Czech Republic
Ukraine
248
Denmark
100
United Arab Emirates
252
Egypt
104
United Kingdom
256
Finland
108
United States
260
France
112
Venezuela
264
Germany
116
Vietnam
268
Hong Kong SAR
120
Hungary
124
India
128
Indonesia
132
Ireland
136
Israel
140
Italy
144
Japan
148
Jordan
152
Kazakhstan
156
Korea, Rep.
160
Kuwait
164
Malaysia
168
Mexico
172
Netherlands
176
Nigeria
180
Norway
184
Pakistan
188
Panama
192
Peru
196
Philippines
200
51
2: Country/Economy Profiles
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Argentina Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................39.7
US$ bn
27.7%
GDP (US$ billions), 2008 .........................................................326.5
47.0%
GDP (current prices) per capita, 2008 ..............................8,214.1 GDP (PPP) as share (%) of world total, 2008 ........................0.83 18.7%
Average rate of real GDP growth (%), 2004–08....................8.46
■ ■ ■ ■
Public debt securities .......147.2 Private debt securities........20.6 Banking deposits .................58.4 Equity securities ..................86.7 Total
312.9
6.6%
Total/GDP: 120.2%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................51 2.8 1
2
3
4
5
6
7
Factors, policies, and institutions
52
1st pillar: Institutional environment .........................................50
3.2
Financial sector liberalization ....................................................46 Corporate governance.................................................................45 Legal and regulatory issues .......................................................54 Contract enforcement..................................................................43
2.7 4.1 2.5 3.7
2nd pillar: Business environment .............................................44
3.8
Human capital ...............................................................................27 Taxes...............................................................................................54 Infrastructure ................................................................................35 Cost of doing business ................................................................40
4.3 2.6 3.6 4.7
3rd pillar: Financial stability......................................................53
3.7
Currency stability..........................................................................24 Banking system stability..............................................................48 Risk of sovereign debt crisis ......................................................52
4.4 4.0 2.5 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................42
2.8
Size index .......................................................................................47 Efficiency index.............................................................................54 Financial information disclosure..................................................2
1.5 2.7 5.6
5th pillar: Non-banking financial services .............................28
2.3
IPO activity.....................................................................................42 M&A activity..................................................................................46 Insurance .......................................................................................38 Securitization...................................................................................6
1.6 1.3 1.9 4.3
6th pillar: Financial markets......................................................49
1.4
Foreign exchange markets .........................................................43 Derivatives markets....................................................................n/a Equity market development ........................................................54 Bond market development..........................................................32
1.0 n/a 1.2 2.0 1
Financial access 7th pillar: Financial access........................................................54
2.2
Commercial access......................................................................55 Retail access.................................................................................41
2.5 2.0 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Argentina Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–0.8 Commitments to WTO agreement on trade in services.......39 .....■ ...............43.5 Domestic financial sector liberalization .................................36 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................33 .....■ .................4.4 Efficacy of corporate boards .................................................48 .....■ .................4.3 Reliance on professional management .................................33 .....■ .................4.7 Willingness to delegate.........................................................39 .....■ .................3.9 Strength of auditing and reporting standards........................50 .....■ .................3.9 Ethical behavior of firms........................................................52 .....■ .................3.2 Protection of minority shareholders’ interests......................50 .....■ .................3.7 Official supervisory power ....................................................20 .....■ ...............11.0 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................41 .....■ .................2.7 Centralization of economic policymaking ..............................54 .....■ .................1.6 Regulation of securities exchanges ......................................48 .....■ .................4.1 Property rights.......................................................................53 .....■ .................2.9 Intellectual property protection .............................................53 .....■ .................2.5 Diversion of public funds.......................................................54 .....■ .................2.2 Public trust of politicians .......................................................55 .....■ .................1.5 Corruption perceptions index ................................................44 .....■ .................2.9 Strength of legal rights index ................................................39 .....■ .................4.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................54 .....■ .................2.0 Judicial independence ...........................................................53 .....■ .................2.4 Irregular payments in judicial decisions ................................50 .....■ .................2.8 Time to enforce a contract ....................................................37 .....■ .............590.0 Number of procedures to enforce a contract .......................33 .....■ ...............36.0 Strength of investor protection .............................................43 .....■ .................4.7 Cost of enforcing contracts...................................................14 .....■ ...............16.5
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................19 .....■ .................5.1 Quality of math and science education.................................44 .....■ .................3.3 Extent of staff training...........................................................43 .....■ .................3.7 Local availability of specialized research and training services .............................................................38 .....■ .................4.2 Brain drain and ease of hiring foreign labor ..........................35 .....■ .................4.0 Tertiary enrollment ................................................................14 .....■ ...............63.8
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................49 .....■ .................2.8 Distortive effect on competition of taxes and subsidies ......54 .....■ .................2.3 Marginal tax variation ............................................................53 .....■ ...............32.2 Time to pay taxes ..................................................................44 .....■ .............453.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................47 .....■ .................3.2 Quality of telephone infrastructure .......................................45 .....■ .................5.5 Internet users ........................................................................35 .....■ ...............25.9 Broadband Internet subscribers ............................................30 .....■ .................6.6 Telephone lines .....................................................................32 .....■ ...............24.0 Mobile telephone subscribers...............................................28 .....■ .............102.2
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
53
2: Country/Economy Profiles
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Argentina Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................32 .....■ .................9.0 Cost of registering property ..................................................45 .....■ .................7.5 Cost of closing a business ....................................................28 .....■ ...............12.0 Time to start a business ........................................................42 .....■ ...............32.0 Time to register property.......................................................40 .....■ ...............51.0 Time to close a business.......................................................31 .....■ .................2.8
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
54
Currency stability Change in real effective exchange rate.................................32 .....■ .................0.4 External vulnerability indicator...............................................22 .....■ .............102.8 Current account balance to GDP...........................................22 .....■ .................1.4 Dollarization vulnerability indicator ........................................29 .....■ ...............15.2 External debt to GDP (developing economies) .....................22 .....■ ...............47.2 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................55 .....■ .................5.0 Financial strengths indicator..................................................42 .....■ .................3.0 Manageability of private debt................................................14 .....■ .................6.5 Aggregate measure of real estate bubbles...........................10 .....■ .................6.1
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................52 .....■ .................5.0 Foreign currency sovereign rating.........................................51 .....■ .................5.0 Aggregate macroprudential indicator ....................................17 .....■ .................5.3 Manageability of public debt .................................................37 .....■ ...............48.6 Credit default swap spreads .................................................45 .....■ ..........2,135.9
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................50 .....■ ...............22.8 Central bank assets to GDP ....................................................6 .....■ .................7.0 Financial system deposits to GDP ........................................50 .....■ ...............20.5 M2 to GDP ............................................................................52 .....■ ...............31.4 Private credit to GDP.............................................................52 .....■ ...............12.5 Bank deposits to GDP ...........................................................52 .....■ ...............20.4 Money market instruments to GDP......................................24 .....■ .................0.0
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................52 .....■ .................2.5 Bank overhead costs.............................................................52 .....■ .................8.0 Public ownership of banks ....................................................47 .....■ ...............46.2 Bank operating costs to assets.............................................45 .....■ .................5.5 Non-performing bank loans to total loans .............................22 .....■ .................2.5
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....■ .............100.0 Public credit registry coverage ................................................5 .....■ ...............31.2
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................34 .....■ .................0.4 IPO proceeds amount ...........................................................31 .....■ .................0.3 Share of world IPOs ..............................................................37 .....■ .................0.3
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Argentina Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................39 .....■ .................0.1 M&A transaction value to GDP .............................................44 .....■ .................1.7 Share of total number of M&A deals ....................................35 .....■ .................0.3
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................36 .....■ ..........6,315.0 Insurance density ..................................................................37 .....■ .............159.8 Real growth of direct insurance premiums...........................31 .....■ .................0.0 Insurance penetration............................................................37 .....■ .................0.0 Relative value-added of insurance to GDP............................19 .....■ .................1.3
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................29 .....■ .................1.8 Share of total number of securitization deals .........................4 .....■ .................2.6
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................38 .....■ .................0.1 Outright forward foreign exchange turnover ........................41 .....■ .................0.0 Foreign exchange swap turnover .........................................n/a .........................n/a
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................50 .....■ .................9.8 Stock market capitalization to GDP.......................................50 .....■ ...............31.9 Stock market value traded to GDP........................................51 .....■ .................3.1 Number of listed companies per 10,000 people...................38 .....■ .................0.0
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............25 .....■ .................4.1 Public domestic bond market capitalization to GDP .............29 .....■ ...............19.7 Private international bonds to GDP .......................................37 .....■ .................2.4 Public international bonds to GDP ..........................................8 .....■ ...............17.3
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
55 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................52 .....■ .................3.4 Venture capital availability .....................................................54 .....■ .................2.1 Ease of access to credit........................................................51 .....■ .................2.7 Financing through local equity market ..................................55 .....■ .................2.7 Ease of access to loans ........................................................55 .....■ .................2.0 Foreign direct investment to GDP ........................................42 .....■ .................2.2
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................20 .....■ ........87,527.4 Commercial bank branches...................................................30 .....■ ...............13.3 Total number of ATMs...........................................................35 .....■ ...............33.0 Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ...........................................19 .....■ .................0.8
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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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%
GDP (current prices) per capita, 2008 ............................47,400.4
32.9%
GDP (PPP) as share (%) of world total, 2008 ........................1.16 Average rate of real GDP growth (%), 2004–08....................3.11
■ ■ ■ ■
Public debt securities .......140.0 Private debt securities...1,160.7 Banking deposits ...............926.8 Equity securities .............1,298.4 Total
3,525.9
26.3%
Total/GDP: 387.6%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index........................................................2 5.1 1
2
3
4
5
6
7
Factors, policies, and institutions
56
1st pillar: Institutional environment .........................................14
5.6
Financial sector liberalization ....................................................24 Corporate governance...................................................................3 Legal and regulatory issues .........................................................7 Contract enforcement....................................................................5
5.4 5.6 5.5 5.7
2nd pillar: Business environment .............................................11
5.7
Human capital ...............................................................................12 Taxes.................................................................................................9 Infrastructure ................................................................................17 Cost of doing business ..................................................................7
5.1 5.8 5.5 6.3
3rd pillar: Financial stability........................................................9
5.5
Currency stability..........................................................................27 Banking system stability..............................................................10 Risk of sovereign debt crisis ........................................................1
4.3 5.7 6.4 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services........................................5
5.0
Size index .......................................................................................14 Efficiency index...............................................................................1 Financial information disclosure..................................................3
4.1 6.5 4.0
5th pillar: Non-banking financial services ...............................3
4.4
IPO activity.......................................................................................8 M&A activity....................................................................................4 Insurance .......................................................................................12 Securitization.................................................................................12
4.0 6.1 3.5 3.8
6th pillar: Financial markets........................................................6
4.6
Foreign exchange markets ...........................................................7 Derivatives markets .......................................................................5 Equity market development ..........................................................9 Bond market development..........................................................20
4.8 6.7 4.7 3.1 1
Financial access 7th pillar: Financial access..........................................................1
5.2
Commercial access......................................................................21 Retail access...................................................................................1
4.0 6.4 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
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Page 57
Australia Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................27 .....■ .................1.2 Commitments to WTO agreement on trade in services.......34 .....■ ...............28.8 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ................................4 .....■ .................5.1 Efficacy of corporate boards ...................................................4 .....■ .................5.6 Reliance on professional management ...................................6 .....■ .................6.0 Willingness to delegate.........................................................11 .....■ .................5.0 Strength of auditing and reporting standards..........................8 .....■ .................6.0 Ethical behavior of firms..........................................................9 .....■ .................6.2 Protection of minority shareholders’ interests......................10 .....■ .................5.2 Official supervisory power ......................................................5 .....■ ...............13.0 Private monitoring of the banking industry .............................2 .....■ .................8.0
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................24 .....■ .................3.2 Centralization of economic policymaking ................................9 .....■ .................4.4 Regulation of securities exchanges ........................................5 .....■ .................5.8 Property rights.......................................................................11 .....■ .................6.2 Intellectual property protection ...............................................9 .....■ .................5.8 Diversion of public funds.........................................................7 .....■ .................5.9 Public trust of politicians .......................................................10 .....■ .................4.9 Corruption perceptions index ..................................................7 .....■ .................8.7 Strength of legal rights index ..................................................4 .....■ .................9.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .......................................4 .....■ .................5.6 Judicial independence .............................................................4 .....■ .................6.4 Irregular payments in judicial decisions ..................................9 .....■ .................6.0 Time to enforce a contract ....................................................16 .....■ .............395.0 Number of procedures to enforce a contract .........................8 .....■ ...............28.0 Strength of investor protection .............................................25 .....■ .................5.7 Cost of enforcing contracts...................................................21 .....■ ...............20.7
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................15 .....■ .................5.3 Quality of math and science education.................................18 .....■ .................4.9 Extent of staff training...........................................................16 .....■ .................4.8 Local availability of specialized research and training services .............................................................17 .....■ .................5.3 Brain drain and ease of hiring foreign labor ..........................24 .....■ .................4.3 Tertiary enrollment ..................................................................8 .....■ ...............72.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................8 .....■ .................6.0 Distortive effect on competition of taxes and subsidies ......13 .....■ .................4.8 Marginal tax variation ............................................................15 .....■ .................2.8 Time to pay taxes ..................................................................11 .....■ .............107.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................25 .....■ .................5.0 Quality of telephone infrastructure .......................................39 .....■ .................5.9 Internet users ........................................................................12 .....■ ...............69.0 Broadband Internet subscribers ............................................15 .....■ ...............23.3 Telephone lines .....................................................................11 .....■ ...............47.1 Mobile telephone subscribers...............................................27 .....■ .............102.5
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
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Australia Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business .....................................................8 .....■ .................0.8 Cost of registering property ..................................................36 .....■ .................4.9 Cost of closing a business ....................................................17 .....■ .................8.0 Time to start a business ..........................................................1 .....■ .................2.0 Time to register property.........................................................5 .....■ .................5.0 Time to close a business.........................................................8 .....■ .................1.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
58
Currency stability Change in real effective exchange rate...................................3 .....■ .................7.2 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................42 .....■ ...............–4.2 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................21 .....■ .............–71.6
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator....................................................1 .....■ .................9.0 Manageability of private debt................................................37 .....■ .............142.4 Aggregate measure of real estate bubbles...........................17 .....■ .................5.5
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ....................................31 .....■ .................4.9 Manageability of public debt ...................................................9 .....■ ...............14.7 Credit default swap spreads ...................................................7 .....■ ...............57.6
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................16 .....■ .............114.3 Central bank assets to GDP ..................................................13 .....■ .................4.3 Financial system deposits to GDP ........................................17 .....■ ...............85.4 M2 to GDP ............................................................................14 .....■ .............107.6 Private credit to GDP.............................................................12 .....■ .............113.9 Bank deposits to GDP ...........................................................18 .....■ ...............85.4 Money market instruments to GDP........................................8 .....■ .................4.1
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................6 .....■ .................5.2 Bank overhead costs.............................................................11 .....■ .................1.6 Public ownership of banks ....................................................16 .....■ .................2.3 Bank operating costs to assets.............................................15 .....■ .................1.6 Non-performing bank loans to total loans ...............................3 .....■ .................0.5
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....■ .............100.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................12 .....■ .................2.1 IPO proceeds amount ...........................................................15 .....■ .................0.5 Share of world IPOs ................................................................4 .....■ .................7.6
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Australia Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share..................................................................7 .....■ .................3.2 M&A transaction value to GDP ...............................................5 .....■ ...............11.6 Share of total number of M&A deals ......................................5 .....■ .................5.2
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................13 .....■ ........62,240.0 Insurance density ..................................................................15 .....■ ..........3,000.5 Real growth of direct insurance premiums...........................31 .....■ .................0.0 Insurance penetration............................................................17 .....■ .................0.1 Relative value-added of insurance to GDP............................10 .....■ .................2.3
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................10 .....■ .................5.1 Share of total number of securitization deals .......................15 .....■ .................1.0
United States ......................16.3 United States ......................60.3
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover..............................................6 .....■ .................3.5 Outright forward foreign exchange turnover ..........................8 .....■ .................3.4 Foreign exchange swap turnover............................................7 .....■ .................5.0
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................10 .....■ .................1.1 Interest rate derivatives turnover: Swaps .............................10 .....■ .................1.1 Interest rate derivatives turnover: Options ...........................12 .....■ .................0.5 Foreign exchange derivatives turnover: Currency swaps .......3 .....■ .................5.6 Foreign exchange derivatives turnover: Options ....................8 .....■ .................1.9
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................19 .....■ .............109.8 Stock market capitalization to GDP.........................................8 .....■ .............146.6 Stock market value traded to GDP........................................13 .....■ .............161.0 Number of listed companies per 10,000 people.....................5 .....■ .................0.9
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP..............4 .....■ ...............81.3 Public domestic bond market capitalization to GDP .............34 .....■ ...............14.8 Private international bonds to GDP .......................................12 .....■ ...............61.3 Public international bonds to GDP ........................................32 .....■ .................1.7
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
59 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................11 .....■ .................6.2 Venture capital availability .......................................................8 .....■ .................4.0 Ease of access to credit........................................................47 .....■ .................2.9 Financing through local equity market ..................................18 .....■ .................4.6 Ease of access to loans ..........................................................7 .....■ .................4.4 Foreign direct investment to GDP ........................................40 .....■ .................2.4
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches.....................................................9 .....■ ...............31.8 Total number of ATMs.............................................................3 .....■ .............159.3 Total number of point of sale (POS) devices...........................2 .....■ ..........3,938.8 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Austria Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................8.3
17.4%
US$ bn
16.7%
GDP (US$ billions), 2008 .........................................................415.3
■ ■ ■ ■
GDP (current prices) per capita, 2008 ............................50,098.4 GDP (PPP) as share (%) of world total, 2008 ........................0.48 Average rate of real GDP growth (%), 2004–08....................2.72
27.6%
Public debt securities .......220.6 Private debt securities......505.1 Banking deposits ...............363.1 Equity securities ................228.7 Total
38.3%
1,317.5
Total/GDP: 354.9%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................18 4.3 1
2
3
4
5
6
7
Factors, policies, and institutions
60
1st pillar: Institutional environment ...........................................6
5.7
Financial sector liberalization ......................................................1 Corporate governance.................................................................10 Legal and regulatory issues .......................................................10 Contract enforcement..................................................................11
7.0 5.2 5.2 5.5
2nd pillar: Business environment .............................................17
5.3
Human capital ...............................................................................19 Taxes...............................................................................................21 Infrastructure ................................................................................14 Cost of doing business ................................................................23
4.7 5.2 5.8 5.4
3rd pillar: Financial stability......................................................24
4.8
Currency stability..........................................................................33 Banking system stability..............................................................39 Risk of sovereign debt crisis ......................................................16
4.1 4.6 5.7 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................18
4.2
Size index .......................................................................................13 Efficiency index.............................................................................20 Financial information disclosure................................................32
4.1 5.4 2.3
5th pillar: Non-banking financial services .............................38
1.9
IPO activity.....................................................................................30 M&A activity..................................................................................34 Insurance .......................................................................................24 Securitization.................................................................................46
1.9 1.6 2.7 1.3
6th pillar: Financial markets......................................................23
3.0
Foreign exchange markets .........................................................20 Derivatives markets .....................................................................22 Equity market development ........................................................36 Bond market development............................................................2
1.4 2.3 2.1 5.3 1
Financial access 7th pillar: Financial access..........................................................2
5.1
Commercial access......................................................................17 Retail access...................................................................................2
4.2 6.1 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Austria Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................1.7 Commitments to WTO agreement on trade in services.........1 .....■ ...............71.6 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................22 .....■ .................4.6 Efficacy of corporate boards .................................................21 .....■ .................5.1 Reliance on professional management .................................14 .....■ .................5.6 Willingness to delegate.........................................................10 .....■ .................5.0 Strength of auditing and reporting standards..........................9 .....■ .................6.0 Ethical behavior of firms........................................................10 .....■ .................6.2 Protection of minority shareholders’ interests......................11 .....■ .................5.2 Official supervisory power ....................................................22 .....■ ...............10.5 Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................18 .....■ .................3.5 Centralization of economic policymaking ..............................10 .....■ .................4.4 Regulation of securities exchanges ......................................22 .....■ .................4.9 Property rights.........................................................................6 .....■ .................6.4 Intellectual property protection ...............................................5 .....■ .................6.1 Diversion of public funds.......................................................13 .....■ .................5.6 Public trust of politicians .......................................................13 .....■ .................4.2 Corruption perceptions index ..................................................9 .....■ .................8.1 Strength of legal rights index ................................................18 .....■ .................7.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................19 .....■ .................4.3 Judicial independence ...........................................................11 .....■ .................6.1 Irregular payments in judicial decisions ................................15 .....■ .................5.8 Time to enforce a contract ....................................................17 .....■ .............397.0 Number of procedures to enforce a contract .........................4 .....■ ...............25.0 Strength of investor protection .............................................50 .....■ .................4.0 Cost of enforcing contracts...................................................19 .....■ ...............18.0
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................20 .....■ .................5.1 Quality of math and science education.................................23 .....■ .................4.7 Extent of staff training...........................................................18 .....■ .................4.8 Local availability of specialized research and training services .............................................................12 .....■ .................5.5 Brain drain and ease of hiring foreign labor ..........................37 .....■ .................3.9 Tertiary enrollment ................................................................25 .....■ ...............49.9
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................15 .....■ .................5.8 Distortive effect on competition of taxes and subsidies ......17 .....■ .................4.7 Marginal tax variation ............................................................33 .....■ .................9.9 Time to pay taxes ..................................................................19 .....■ .............170.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................4 .....■ .................6.6 Quality of telephone infrastructure .........................................3 .....■ .................6.9 Internet users ........................................................................15 .....■ ...............67.0 Broadband Internet subscribers ............................................19 .....■ ...............19.4 Telephone lines .....................................................................20 .....■ ...............40.7 Mobile telephone subscribers...............................................10 .....■ .............118.6
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
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Austria Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................20 .....■ .................5.1 Cost of registering property ..................................................34 .....■ .................4.5 Cost of closing a business ....................................................37 .....■ ...............18.0 Time to start a business ........................................................36 .....■ ...............28.0 Time to register property.......................................................27 .....■ ...............32.0 Time to close a business.......................................................11 .....■ .................1.1
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
62
Currency stability Change in real effective exchange rate.................................30 .....■ .................0.7 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................19 .....■ .................2.9 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................9 .....■ ...............–0.3
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................41 .....■ .................2.0 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt ...............................................n/a .........................n/a Aggregate measure of real estate bubbles...........................29 .....■ .................4.7
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ....................................12 .....■ .................5.4 Manageability of public debt .................................................45 .....■ ...............62.6 Credit default swap spreads .................................................20 .....■ .............119.5
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................12 .....■ .............124.2 Central bank assets to GDP ..................................................26 .....■ .................1.2 Financial system deposits to GDP ........................................16 .....■ ...............86.2 M2 to GDP ............................................................................16 .....■ .............100.4 Private credit to GDP.............................................................13 .....■ .............111.2 Bank deposits to GDP ...........................................................17 .....■ ...............86.2 Money market instruments to GDP........................................5 .....■ .................6.9
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................23 .....■ .................4.2 Bank overhead costs.............................................................42 .....■ .................4.1 Public ownership of banks ....................................................29 .....■ .................8.8 Bank operating costs to assets.............................................20 .....■ .................2.0 Non-performing bank loans to total loans .............................15 .....■ .................1.7
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................24 .....■ ...............40.9 Public credit registry coverage ..............................................19 .....■ .................1.3
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................23 .....■ .................0.8 IPO proceeds amount ...........................................................20 .....■ .................0.5 Share of world IPOs ..............................................................33 .....■ .................0.4
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Austria Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................27 .....■ .................0.3 M&A transaction value to GDP .............................................36 .....■ .................2.8 Share of total number of M&A deals ....................................28 .....■ .................0.5
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................23 .....■ ........21,741.0 Insurance density ..................................................................18 .....■ ..........2,619.7 Real growth of direct insurance premiums...........................44 .....■ .................0.0 Insurance penetration............................................................20 .....■ .................0.1 Relative value-added of insurance to GDP............................17 .....■ .................1.6
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................44 .....■ .................0.9 Share of total number of securitization deals .......................44 .....■ .................0.1
United States ......................16.3 United States ......................60.3
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................20 .....■ .................0.4 Outright forward foreign exchange turnover ........................19 .....■ .................0.4 Foreign exchange swap turnover..........................................20 .....■ .................0.5
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................20 .....■ .................0.2 Interest rate derivatives turnover: Swaps .............................18 .....■ .................0.3 Interest rate derivatives turnover: Options ...........................20 .....■ .................0.1 Foreign exchange derivatives turnover: Currency swaps .....18 .....■ .................0.5 Foreign exchange derivatives turnover: Options ..................16 .....■ .................0.3
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................35 .....■ ...............57.5 Stock market capitalization to GDP.......................................37 .....■ ...............56.1 Stock market value traded to GDP........................................37 .....■ ...............32.2 Number of listed companies per 10,000 people..................n/a .........................n/a
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP .............19 .....■ ...............42.5 Private international bonds to GDP .......................................10 .....■ ...............93.2 Public international bonds to GDP ..........................................2 .....■ ...............39.4
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
63 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................17 .....■ .................5.9 Venture capital availability .....................................................27 .....■ .................3.2 Ease of access to credit........................................................48 .....■ .................2.8 Financing through local equity market ..................................29 .....■ .................4.3 Ease of access to loans ........................................................26 .....■ .................3.5 Foreign direct investment to GDP ........................................14 .....■ .................8.3
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts .....................................4 .....■ ......244,180.8 Commercial bank branches ..................................................n/a .........................n/a Total number of ATMs.............................................................6 .....■ .............118.4 Total number of point of sale (POS) devices...........................1 .....■ ..........4,889.6 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Bahrain Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................0.8
US$ bn
9.9%
GDP (US$ billions), 2008 ...........................................................21.2
10.3%
GDP (current prices) per capita, 2008 ............................27,247.8 GDP (PPP) as share (%) of world total, 2008 ........................0.04
53.2%
Average rate of real GDP growth (%), 2004–08....................6.87
■ ■ ■ ■
26.6%
Public debt securities ...........5.3 Private debt securities..........5.4 Banking deposits .................14.0 Equity securities ..................28.1 Total
52.9
Total/GDP: 286.7%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................27 3.8 1
2
3
4
5
6
7
Factors, policies, and institutions
64
1st pillar: Institutional environment .........................................20
5.0
Financial sector liberalization ....................................................16 Corporate governance.................................................................20 Legal and regulatory issues .......................................................24 Contract enforcement..................................................................30
6.7 4.9 4.2 4.3
2nd pillar: Business environment .............................................18
5.2
Human capital ...............................................................................34 Taxes.................................................................................................4 Infrastructure ................................................................................25 Cost of doing business ................................................................12
4.1 6.1 4.7 6.1
3rd pillar: Financial stability......................................................40
4.5
Currency stability..........................................................................52 Banking system stability..............................................................13 Risk of sovereign debt crisis ......................................................28
2.5 5.7 4.9 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................32
3.6
Size index .......................................................................................24 Efficiency index.............................................................................33 Financial information disclosure................................................35
3.2 4.7 2.1
5th pillar: Non-banking financial services .............................33
2.1
IPO activity.....................................................................................15 M&A activity..................................................................................38 Insurance .....................................................................................n/a Securitization.................................................................................35
3.0 1.5 n/a 1.8
6th pillar: Financial markets......................................................39
1.8
Foreign exchange markets .........................................................35 Derivatives markets .....................................................................31 Equity market development ........................................................29 Bond market development ........................................................n/a
1.1 1.3 2.6 n/a 1
Financial access 7th pillar: Financial access..........................................................5
4.7
Commercial access........................................................................5 Retail access ...............................................................................n/a
4.7 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:22 PM
Page 65
Bahrain Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.......19 .....■ ...............54.0 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................31 .....■ .................4.5 Efficacy of corporate boards .................................................25 .....■ .................4.9 Reliance on professional management .................................45 .....■ .................4.1 Willingness to delegate.........................................................23 .....■ .................4.5 Strength of auditing and reporting standards........................21 .....■ .................5.3 Ethical behavior of firms........................................................21 .....■ .................5.3 Protection of minority shareholders’ interests......................19 .....■ .................5.0 Official supervisory power ....................................................13 .....■ ...............12.0 Private monitoring of the banking industry .............................2 .....■ .................8.0
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................14 .....■ .................3.7 Centralization of economic policymaking ..............................45 .....■ .................2.5 Regulation of securities exchanges ......................................19 .....■ .................5.1 Property rights.......................................................................22 .....■ .................5.5 Intellectual property protection .............................................21 .....■ .................5.1 Diversion of public funds.......................................................18 .....■ .................5.1 Public trust of politicians .......................................................18 .....■ .................3.9 Corruption perceptions index ................................................24 .....■ .................5.4 Strength of legal rights index ................................................39 .....■ .................4.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................29 .....■ .................3.7 Judicial independence ...........................................................22 .....■ .................5.0 Irregular payments in judicial decisions ................................20 .....■ .................5.4 Time to enforce a contract ....................................................42 .....■ .............635.0 Number of procedures to enforce a contract .......................53 .....■ ...............48.0 Strength of investor protection .............................................25 .....■ .................5.7 Cost of enforcing contracts...................................................13 .....■ ...............14.7
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................27 .....■ .................4.6 Quality of math and science education.................................32 .....■ .................4.3 Extent of staff training...........................................................27 .....■ .................4.5 Local availability of specialized research and training services .............................................................54 .....■ .................3.4 Brain drain and ease of hiring foreign labor ..........................14 .....■ .................4.8 Tertiary enrollment ................................................................39 .....■ ...............32.1
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................16 .....■ .................5.7 Distortive effect on competition of taxes and subsidies ........4 .....■ .................5.7 Marginal tax variation ..............................................................9 .....■ .................0.0 Time to pay taxes ....................................................................2 .....■ ...............36.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................18 .....■ .................5.4 Quality of telephone infrastructure .......................................27 .....■ .................6.3 Internet users ........................................................................29 .....■ ...............33.2 Broadband Internet subscribers ............................................25 .....■ .................9.1 Telephone lines .....................................................................30 .....■ ...............26.3 Mobile telephone subscribers.................................................4 .....■ .............148.3
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
65
2: Country/Economy Profiles
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Bahrain Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business .....................................................4 .....■ .................0.6 Cost of registering property ..................................................11 .....■ .................0.9 Cost of closing a business ....................................................27 .....■ ...............10.0 Time to start a business ........................................................11 .....■ .................9.0 Time to register property.......................................................25 .....■ ...............31.0 Time to close a business.......................................................28 .....■ .................2.5
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
66
Currency stability Change in real effective exchange rate.................................52 .....■ ...............–5.4 External vulnerability indicator...............................................33 .....■ .............523.5 Current account balance to GDP.............................................9 .....■ ...............10.6 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................32 .....■ .............167.2 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator..................................................32 .....■ .................5.0 Manageability of private debt................................................23 .....■ ...............20.0 Aggregate measure of real estate bubbles ..........................n/a .........................n/a
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................32 .....■ ...............15.0 Foreign currency sovereign rating.........................................26 .....■ ...............15.0 Aggregate macroprudential indicator ......................................4 .....■ .................6.0 Manageability of public debt .................................................17 .....■ ...............30.0 Credit default swap spreads .................................................41 .....■ .............356.5
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................35 .....■ ...............58.2 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................20 .....■ ...............73.9 M2 to GDP ............................................................................17 .....■ ...............96.5 Private credit to GDP.............................................................30 .....■ ...............66.2 Bank deposits to GDP ...........................................................28 .....■ ...............59.4 Money market instruments to GDP .....................................n/a .........................n/a
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................3 .....■ .................6.1 Bank overhead costs.............................................................33 .....■ .................3.0 Public ownership of banks ....................................................35 .....■ ...............16.6 Bank operating costs to assets.............................................54 .....■ .................7.6 Non-performing bank loans to total loans ............................n/a .........................n/a
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................26 .....■ ...............35.8 Public credit registry coverage ..............................................24 .....■ .................0.0
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................44 .....■ .................0.1 IPO proceeds amount .............................................................4 .....■ .................1.4 Share of world IPOs ..............................................................44 .....■ .................0.1
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Bahrain Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................53 .....■ .................0.0 M&A transaction value to GDP .............................................25 .....■ .................3.8 Share of total number of M&A deals ....................................53 .....■ .................0.0
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct..................................................n/a .........................n/a Insurance density .................................................................n/a .........................n/a Real growth of direct insurance premiums ..........................n/a .........................n/a Insurance penetration...........................................................n/a .........................n/a Relative value-added of insurance to GDP ...........................n/a .........................n/a
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................23 .....■ .................2.3 Share of total number of securitization deals .......................50 .....■ .................0.0
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................34 .....■ .................0.1 Outright forward foreign exchange turnover ........................26 .....■ .................0.2 Foreign exchange swap turnover..........................................37 .....■ .................0.0
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps .............................29 .....■ .................0.0 Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps .....27 .....■ .................0.1 Foreign exchange derivatives turnover: Options ..................24 .....■ .................0.1
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................52 .....■ .................6.6 Stock market capitalization to GDP.......................................17 .....■ .............120.0 Stock market value traded to GDP........................................50 .....■ .................5.5 Number of listed companies per 10,000 people.....................8 .....■ .................0.6
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
67 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................23 .....■ .................5.5 Venture capital availability .......................................................9 .....■ .................3.9 Ease of access to credit..........................................................3 .....■ .................4.6 Financing through local equity market ..................................40 .....■ .................3.9 Ease of access to loans ..........................................................2 .....■ .................4.7 Foreign direct investment to GDP ..........................................7 .....■ .................9.5
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ..................................................n/a .........................n/a Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Bangladesh Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .....................................................161.9
US$ bn
10.0%
GDP (US$ billions), 2008 ...........................................................81.9 36.8%
GDP (current prices) per capita, 2008 .................................506.1 GDP (PPP) as share (%) of world total, 2008 ........................0.33 Average rate of real GDP growth (%), 2004–08....................6.17
■ ■ ■ ■
Public debt securities .........25.0 Private debt securities.........n/a Banking deposits .................36.2 Equity securities ....................6.8 Total
53.2%
68.0
Total/GDP: 92.3%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................54 2.6 1
2
3
4
5
6
7
Factors, policies, and institutions
68
1st pillar: Institutional environment .........................................55
2.5
Financial sector liberalization ....................................................55 Corporate governance.................................................................55 Legal and regulatory issues .......................................................51 Contract enforcement..................................................................55
1.0 3.4 2.9 2.6
2nd pillar: Business environment .............................................55
2.7
Human capital ...............................................................................55 Taxes...............................................................................................47 Infrastructure ................................................................................55 Cost of doing business ................................................................54
2.7 3.6 1.8 2.8
3rd pillar: Financial stability......................................................30
4.7
Currency stability........................................................................n/a Banking system stability............................................................n/a Risk of sovereign debt crisis ......................................................34
n/a n/a 4.7 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................51
2.4
Size index .......................................................................................34 Efficiency index.............................................................................52 Financial information disclosure................................................53
2.4 3.1 1.0
5th pillar: Non-banking financial services .............................55
1.0
IPO activity.....................................................................................53 M&A activity..................................................................................55 Insurance .......................................................................................51 Securitization.................................................................................55
1.0 1.0 1.1 1.0
6th pillar: Financial markets......................................................44
1.7
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................44 Bond market development ........................................................n/a
n/a n/a 1.7 n/a 1
Financial access 7th pillar: Financial access........................................................40
3.0
Commercial access......................................................................53 Retail access.................................................................................16
2.8 3.1 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:22 PM
Page 69
Bangladesh Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–1.1 Commitments to WTO agreement on trade in services.......47 .....■ .................0.0 Domestic financial sector liberalization ................................n/a .........................n/a
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................55 .....■ .................2.8 Efficacy of corporate boards .................................................52 .....■ .................3.9 Reliance on professional management .................................51 .....■ .................3.9 Willingness to delegate.........................................................55 .....■ .................2.9 Strength of auditing and reporting standards........................55 .....■ .................3.6 Ethical behavior of firms........................................................54 .....■ .................3.1 Protection of minority shareholders’ interests......................51 .....■ .................3.6 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................49 .....■ .................2.5 Centralization of economic policymaking ..............................53 .....■ .................1.8 Regulation of securities exchanges ......................................38 .....■ .................4.4 Property rights.......................................................................51 .....■ .................3.5 Intellectual property protection .............................................54 .....■ .................2.4 Diversion of public funds.......................................................49 .....■ .................2.6 Public trust of politicians .......................................................49 .....■ .................1.8 Corruption perceptions index ................................................53 .....■ .................2.1 Strength of legal rights index ................................................11 .....■ .................8.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................42 .....■ .................2.9 Judicial independence ...........................................................44 .....■ .................3.5 Irregular payments in judicial decisions ................................54 .....■ .................2.2 Time to enforce a contract ....................................................55 .....■ ..........1,442.0 Number of procedures to enforce a contract .......................45 .....■ ...............41.0 Strength of investor protection .............................................13 .....■ .................6.7 Cost of enforcing contracts...................................................54 .....■ ...............63.3
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................52 .....■ .................3.6 Quality of math and science education.................................50 .....■ .................2.9 Extent of staff training...........................................................55 .....■ .................2.6 Local availability of specialized research and training services .............................................................55 .....■ .................3.0 Brain drain and ease of hiring foreign labor ..........................54 .....■ .................3.0 Tertiary enrollment ................................................................54 .....■ .................6.8
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................54 .....■ .................2.2 Distortive effect on competition of taxes and subsidies ......31 .....■ .................4.1 Marginal tax variation ............................................................48 .....■ ...............17.7 Time to pay taxes ..................................................................35 .....■ .............302.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................54 .....■ .................2.5 Quality of telephone infrastructure .......................................55 .....■ .................4.4 Internet users ........................................................................55 .....■ .................0.3 Broadband Internet subscribers ............................................55 .....■ .................0.0 Telephone lines .....................................................................55 .....■ .................0.7 Mobile telephone subscribers...............................................54 .....■ ...............21.7
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
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2: Country/Economy Profiles
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Bangladesh Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................48 .....■ ...............25.7 Cost of registering property ..................................................51 .....■ ...............10.4 Cost of closing a business ....................................................17 .....■ .................8.0 Time to start a business ........................................................52 .....■ ...............73.0 Time to register property.......................................................55 .....■ .............245.0 Time to close a business.......................................................41 .....■ .................4.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
70
Currency stability Change in real effective exchange rate................................n/a .........................n/a External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................24 .....■ .................0.9 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................20 .....■ .................1.0 Financial strengths indicator.................................................n/a .........................n/a Manageability of private debt ...............................................n/a .........................n/a Aggregate measure of real estate bubbles ..........................n/a .........................n/a
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating............................................n/a .........................n/a Foreign currency sovereign rating ........................................n/a .........................n/a Aggregate macroprudential indicator ....................................30 .....■ .................4.9 Manageability of public debt .................................................27 .....■ ...............39.4 Credit default swap spreads.................................................n/a .........................n/a
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................38 .....■ ...............51.7 Central bank assets to GDP ....................................................8 .....■ .................5.9 Financial system deposits to GDP ........................................35 .....■ ...............49.5 M2 to GDP ............................................................................32 .....■ ...............61.2 Private credit to GDP.............................................................42 .....■ ...............34.4 Bank deposits to GDP ...........................................................35 .....■ ...............49.5 Money market instruments to GDP .....................................n/a .........................n/a
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................7 .....■ .................5.0 Bank overhead costs.............................................................24 .....■ .................2.4 Public ownership of banks ....................................................53 .....■ ...............65.9 Bank operating costs to assets.............................................48 .....■ .................5.8 Non-performing bank loans to total loans .............................48 .....■ ...............13.0
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................46 .....■ .................0.0 Public credit registry coverage ..............................................21 .....■ .................0.9
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share .................................................................n/a .........................n/a IPO proceeds amount ...........................................................53 .....■ .................0.0 Share of world IPOs ..............................................................53 .....■ .................0.0
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Bangladesh Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................55 .....■ .................0.0 M&A transaction value to GDP .............................................54 .....■ .................0.4 Share of total number of M&A deals ....................................55 .....■ .................0.0
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................53 .....■ .............456.0 Insurance density ..................................................................53 .....■ .................2.9 Real growth of direct insurance premiums ..........................n/a .........................n/a Insurance penetration............................................................50 .....■ .................0.0 Relative value-added of insurance to GDP............................44 .....■ .................0.5
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................53 .....■ .................0.1 Share of total number of securitization deals .......................50 .....■ .................0.0
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................22 .....■ ...............92.1 Stock market capitalization to GDP.......................................54 .....■ .................7.7 Stock market value traded to GDP........................................47 .....■ .................7.1 Number of listed companies per 10,000 people...................43 .....■ .................0.0
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
71 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................55 .....■ .................2.9 Venture capital availability .....................................................55 .....■ .................2.0 Ease of access to credit........................................................23 .....■ .................3.7 Financing through local equity market ..................................23 .....■ .................4.5 Ease of access to loans ........................................................51 .....■ .................2.4 Foreign direct investment to GDP ........................................50 .....■ .................0.9
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................33 .....■ ........31,868.2 Commercial bank branches...................................................43 .....■ .................5.2 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate .............................................1 .....■ ...............41.2
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Belgium Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................10.8
21.5%
US$ bn
21.4%
GDP (US$ billions), 2008 .........................................................506.4
■ ■ ■ ■
GDP (current prices) per capita, 2008 ............................47,107.8 GDP (PPP) as share (%) of world total, 2008 ........................0.57 Average rate of real GDP growth (%), 2004–08....................2.33
29.9%
27.3%
Public debt securities .......384.5 Private debt securities......537.4 Banking deposits ...............491.0 Equity securities ................386.4 Total
1,799.3
Total/GDP: 392.0%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................13 4.5 1
2
3
4
5
6
7
Factors, policies, and institutions
72
1st pillar: Institutional environment .........................................16
5.5
Financial sector liberalization ......................................................1 Corporate governance.................................................................19 Legal and regulatory issues .......................................................15 Contract enforcement..................................................................15
7.0 5.0 4.8 5.4
2nd pillar: Business environment .............................................21
5.1
Human capital .................................................................................7 Taxes...............................................................................................36 Infrastructure ................................................................................16 Cost of doing business ................................................................36
5.4 4.3 5.7 4.9
3rd pillar: Financial stability......................................................33
4.7
Currency stability..........................................................................35 Banking system stability..............................................................35 Risk of sovereign debt crisis ......................................................24
4.0 4.8 5.1 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services........................................9
4.8
Size index .......................................................................................16 Efficiency index...............................................................................7 Financial information disclosure................................................12
3.9 6.1 3.9
5th pillar: Non-banking financial services .............................24
2.5
IPO activity.....................................................................................40 M&A activity..................................................................................22 Insurance .......................................................................................13 Securitization.................................................................................22
1.6 2.3 3.5 2.5
6th pillar: Financial markets......................................................11
4.2
Foreign exchange markets .........................................................12 Derivatives markets .....................................................................11 Equity market development ........................................................30 Bond market development............................................................1
2.3 5.2 2.6 6.5 1
Financial access 7th pillar: Financial access..........................................................4
4.7
Commercial access......................................................................12 Retail access...................................................................................4
4.3 5.2 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Belgium Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................1.7 Commitments to WTO agreement on trade in services.........1 .....■ ...............72.8 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................26 .....■ .................4.5 Efficacy of corporate boards .................................................13 .....■ .................5.2 Reliance on professional management .................................16 .....■ .................5.5 Willingness to delegate.........................................................12 .....■ .................5.0 Strength of auditing and reporting standards........................14 .....■ .................5.6 Ethical behavior of firms........................................................16 .....■ .................5.5 Protection of minority shareholders’ interests......................16 .....■ .................5.1 Official supervisory power ....................................................11 .....■ ...............12.5 Private monitoring of the banking industry ...........................22 .....■ .................6.0
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................43 .....■ .................2.7 Centralization of economic policymaking ................................2 .....■ .................5.1 Regulation of securities exchanges ......................................20 .....■ .................5.1 Property rights.......................................................................17 .....■ .................5.8 Intellectual property protection .............................................18 .....■ .................5.3 Diversion of public funds.......................................................17 .....■ .................5.1 Public trust of politicians .......................................................24 .....■ .................3.5 Corruption perceptions index ................................................15 .....■ .................7.3 Strength of legal rights index ................................................18 .....■ .................7.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................35 .....■ .................3.4 Judicial independence ...........................................................17 .....■ .................5.4 Irregular payments in judicial decisions ................................19 .....■ .................5.4 Time to enforce a contract ....................................................27 .....■ .............505.0 Number of procedures to enforce a contract .........................4 .....■ ...............25.0 Strength of investor protection .............................................11 .....■ .................7.0 Cost of enforcing contracts...................................................16 .....■ ...............16.6
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................7 .....■ .................5.8 Quality of math and science education...................................3 .....■ .................6.1 Extent of staff training...........................................................12 .....■ .................4.9 Local availability of specialized research and training services .............................................................10 .....■ .................5.6 Brain drain and ease of hiring foreign labor ..........................20 .....■ .................4.5 Tertiary enrollment ................................................................15 .....■ ...............62.8
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................20 .....■ .................5.4 Distortive effect on competition of taxes and subsidies ......26 .....■ .................4.3 Marginal tax variation ............................................................52 .....■ ...............28.1 Time to pay taxes ..................................................................18 .....■ .............156.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................13 .....■ .................5.8 Quality of telephone infrastructure .......................................21 .....■ .................6.5 Internet users ........................................................................16 .....■ ...............67.0 Broadband Internet subscribers ............................................10 .....■ ...............26.0 Telephone lines .....................................................................15 .....■ ...............44.6 Mobile telephone subscribers...............................................26 .....■ .............102.7
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
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2: Country/Economy Profiles
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Belgium Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................21 .....■ .................5.2 Cost of registering property ..................................................54 .....■ ...............12.7 Cost of closing a business ......................................................5 .....■ .................4.0 Time to start a business ..........................................................2 .....■ .................4.0 Time to register property.......................................................51 .....■ .............132.0 Time to close a business.........................................................5 .....■ .................0.9
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
74
Currency stability Change in real effective exchange rate.................................20 .....■ .................2.3 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................36 .....■ ...............–2.5 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................10 .....■ ...............–0.3
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................41 .....■ .................2.0 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt ...............................................n/a .........................n/a Aggregate measure of real estate bubbles...........................21 .....■ .................5.1
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................16 .....■ ...............19.0 Foreign currency sovereign rating.........................................16 .....■ ...............19.0 Aggregate macroprudential indicator ....................................26 .....■ .................5.0 Manageability of public debt .................................................52 .....■ ...............89.6 Credit default swap spreads .................................................11 .....■ ...............68.3
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................18 .....■ .............108.7 Central bank assets to GDP ..................................................37 .....■ .................0.4 Financial system deposits to GDP ........................................12 .....■ ...............98.7 M2 to GDP ............................................................................13 .....■ .............108.3 Private credit to GDP.............................................................24 .....■ ...............85.4 Bank deposits to GDP ...........................................................13 .....■ ...............98.7 Money market instruments to GDP........................................7 .....■ .................5.2
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................9 .....■ .................4.8 Bank overhead costs.............................................................32 .....■ .................3.0 Public ownership of banks ......................................................1 .....■ .................0.0 Bank operating costs to assets...............................................9 .....■ .................1.2 Non-performing bank loans to total loans .............................13 .....■ .................1.5
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................46 .....■ .................0.0 Public credit registry coverage ................................................2 .....■ ...............57.7
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................33 .....■ .................0.4 IPO proceeds amount ...........................................................42 .....■ .................0.2 Share of world IPOs ..............................................................20 .....■ .................0.9
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Belgium Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................21 .....■ .................0.8 M&A transaction value to GDP .............................................16 .....■ .................5.3 Share of total number of M&A deals ....................................24 .....■ .................0.7
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................15 .....■ ........44,897.0 Insurance density ....................................................................8 .....■ ..........4,022.7 Real growth of direct insurance premiums...........................35 .....■ .................0.0 Insurance penetration............................................................10 .....■ .................0.1 Relative value-added of insurance to GDP............................20 .....■ .................1.3
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................14 .....■ .................3.7 Share of total number of securitization deals .......................26 .....■ .................0.3
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................13 .....■ .................1.1 Outright forward foreign exchange turnover ........................11 .....■ .................1.7 Foreign exchange swap turnover..........................................13 .....■ .................1.2
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................14 .....■ .................0.5 Interest rate derivatives turnover: Swaps .............................12 .....■ .................1.0 Interest rate derivatives turnover: Options .............................5 .....■ .................1.5 Foreign exchange derivatives turnover: Currency swaps .....15 .....■ .................0.9 Foreign exchange derivatives turnover: Options ..................14 .....■ .................0.6
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................31 .....■ ...............64.8 Stock market capitalization to GDP.......................................28 .....■ ...............88.0 Stock market value traded to GDP........................................29 .....■ ...............57.0 Number of listed companies per 10,000 people..................n/a .........................n/a
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP .........................................6 .....■ .............125.2 Public international bonds to GDP ..........................................3 .....■ ...............36.8
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
75 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................18 .....■ .................5.9 Venture capital availability .....................................................21 .....■ .................3.5 Ease of access to credit........................................................45 .....■ .................2.9 Financing through local equity market ..................................34 .....■ .................4.2 Ease of access to loans ........................................................16 .....■ .................3.9 Foreign direct investment to GDP ........................................12 .....■ .................8.9
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts .....................................2 .....■ ......372,457.0 Commercial bank branches.....................................................2 .....■ ...............50.0 Total number of ATMs...........................................................11 .....■ ...............86.0 Total number of point of sale (POS) devices.........................14 .....■ ..........1,086.1 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Brazil Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .....................................................191.9
US$ bn
18.3%
GDP (US$ billions), 2008 ......................................................1,572.8 GDP (current prices) per capita, 2008 ..............................8,197.4
41.8% 9.9%
GDP (PPP) as share (%) of world total, 2008 ........................2.86 Average rate of real GDP growth (%), 2004–08....................4.72
■ ■ ■ ■
Public debt securities .......601.0 Private debt securities......325.6 Banking deposits ...............984.3 Equity securities .............1,370.4 Total
3,281.3
30.0%
Total/GDP: 246.1%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................34 3.5 1
2
3
4
5
6
7
Factors, policies, and institutions
76
1st pillar: Institutional environment .........................................42
3.6
Financial sector liberalization ....................................................40 Corporate governance.................................................................26 Legal and regulatory issues .......................................................49 Contract enforcement..................................................................42
3.2 4.7 2.9 3.7
2nd pillar: Business environment .............................................47
3.6
Human capital ...............................................................................42 Taxes...............................................................................................52 Infrastructure ................................................................................38 Cost of doing business ................................................................43
3.7 3.0 3.4 4.4
3rd pillar: Financial stability......................................................15
5.1
Currency stability............................................................................3 Banking system stability..............................................................25 Risk of sovereign debt crisis ......................................................38
6.0 5.1 4.2 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................35
3.5
Size index .......................................................................................27 Efficiency index.............................................................................47 Financial information disclosure................................................13
3.1 3.7 3.9
5th pillar: Non-banking financial services .............................15
3.2
IPO activity.......................................................................................4 M&A activity..................................................................................21 Insurance .......................................................................................28 Securitization.................................................................................18
4.9 2.4 2.6 2.9
6th pillar: Financial markets......................................................37
1.9
Foreign exchange markets .........................................................32 Derivatives markets .....................................................................26 Equity market development ........................................................39 Bond market development..........................................................30
1.1 1.7 2.0 2.4 1
Financial access 7th pillar: Financial access........................................................31
3.3
Commercial access......................................................................29 Retail access.................................................................................27
3.9 2.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
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Page 77
Brazil Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................34 .....■ .................1.0 Commitments to WTO agreement on trade in services.......47 .....■ .................7.6 Domestic financial sector liberalization .................................31 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................29 .....■ .................4.5 Efficacy of corporate boards .................................................32 .....■ .................4.7 Reliance on professional management .................................26 .....■ .................5.1 Willingness to delegate.........................................................31 .....■ .................4.2 Strength of auditing and reporting standards........................41 .....■ .................4.7 Ethical behavior of firms........................................................44 .....■ .................3.6 Protection of minority shareholders’ interests......................31 .....■ .................4.6 Official supervisory power ......................................................1 .....■ ...............14.0 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................54 .....■ .................1.8 Centralization of economic policymaking ..............................40 .....■ .................2.8 Regulation of securities exchanges ........................................8 .....■ .................5.6 Property rights.......................................................................39 .....■ .................4.4 Intellectual property protection .............................................44 .....■ .................3.0 Diversion of public funds.......................................................52 .....■ .................2.3 Public trust of politicians .......................................................52 .....■ .................1.6 Corruption perceptions index ................................................39 .....■ .................3.5 Strength of legal rights index ................................................49 .....■ .................3.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................52 .....■ .................2.3 Judicial independence ...........................................................42 .....■ .................3.6 Irregular payments in judicial decisions ................................39 .....■ .................3.7 Time to enforce a contract ....................................................41 .....■ .............616.0 Number of procedures to enforce a contract .......................50 .....■ ...............45.0 Strength of investor protection .............................................34 .....■ .................5.3 Cost of enforcing contracts...................................................14 .....■ ...............16.5
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................40 .....■ .................4.1 Quality of math and science education.................................51 .....■ .................2.7 Extent of staff training...........................................................34 .....■ .................4.2 Local availability of specialized research and training services .............................................................24 .....■ .................4.8 Brain drain and ease of hiring foreign labor ..........................28 .....■ .................4.2 Tertiary enrollment ................................................................45 .....■ ...............25.5
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................39 .....■ .................3.7 Distortive effect on competition of taxes and subsidies ......45 .....■ .................3.8 Marginal tax variation ............................................................40 .....■ ...............12.7 Time to pay taxes ..................................................................55 .....■ ..........2,600.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................42 .....■ .................3.4 Quality of telephone infrastructure .......................................22 .....■ .................6.5 Internet users ........................................................................28 .....■ ...............35.2 Broadband Internet subscribers ............................................36 .....■ .................3.5 Telephone lines .....................................................................37 .....■ ...............20.5 Mobile telephone subscribers...............................................43 .....■ ...............63.1
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
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Brazil Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................29 .....■ .................8.2 Cost of registering property ..................................................23 .....■ .................2.7 Cost of closing a business ....................................................28 .....■ ...............12.0 Time to start a business ........................................................55 .....■ .............152.0 Time to register property.......................................................34 .....■ ...............42.0 Time to close a business.......................................................41 .....■ .................4.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
78
Currency stability Change in real effective exchange rate...................................1 .....■ ...............11.7 External vulnerability indicator...............................................12 .....■ ...............42.1 Current account balance to GDP...........................................34 .....■ ...............–1.8 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) .......................3 .....■ ...............18.3 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................51 .....■ .................2.5 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt................................................26 .....■ ...............24.8 Aggregate measure of real estate bubbles...........................15 .....■ .................5.6
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................35 .....■ ...............13.0 Foreign currency sovereign rating.........................................36 .....■ ...............11.0 Aggregate macroprudential indicator ....................................35 .....■ .................4.8 Manageability of public debt .................................................24 .....■ ...............36.9 Credit default swap spreads .................................................27 .....■ .............189.8
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................28 .....■ ...............77.9 Central bank assets to GDP ....................................................3 .....■ ...............13.1 Financial system deposits to GDP ........................................30 .....■ ...............56.1 M2 to GDP ............................................................................28 .....■ ...............70.2 Private credit to GDP.............................................................35 .....■ ...............43.6 Bank deposits to GDP ...........................................................31 .....■ ...............56.1 Money market instruments to GDP......................................20 .....■ .................0.1
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................37 .....■ .................3.7 Bank overhead costs.............................................................53 .....■ .................9.2 Public ownership of banks ....................................................30 .....■ .................9.1 Bank operating costs to assets.............................................47 .....■ .................5.6 Non-performing bank loans to total loans .............................30 .....■ .................2.9
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................19 .....■ ...............62.2 Public credit registry coverage ..............................................10 .....■ ...............20.2
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................4 .....■ .................6.6 IPO proceeds amount ...........................................................10 .....■ .................1.1 Share of world IPOs ..............................................................11 .....■ .................2.7
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Brazil Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................16 .....■ .................1.2 M&A transaction value to GDP .............................................34 .....■ .................2.8 Share of total number of M&A deals ....................................17 .....■ .................1.6
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................18 .....■ ........39,251.0 Insurance density ..................................................................34 .....■ .............204.7 Real growth of direct insurance premiums...........................18 .....■ .................0.1 Insurance penetration............................................................34 .....■ .................0.0 Relative value-added of insurance to GDP............................15 .....■ .................1.7
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................37 .....■ .................1.3 Share of total number of securitization deals .......................10 .....■ .................1.5
United States ......................16.3 United States ......................60.3
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................21 .....■ .................0.4 Outright forward foreign exchange turnover ........................35 .....■ .................0.1 Foreign exchange swap turnover..........................................41 .....■ .................0.0
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps .............................30 .....■ .................0.0 Interest rate derivatives turnover: Options ...........................31 .....■ .................0.0 Foreign exchange derivatives turnover: Currency swaps .....16 .....■ .................0.7 Foreign exchange derivatives turnover: Options ..................34 .....■ .................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................36 .....■ ...............56.1 Stock market capitalization to GDP.......................................31 .....■ ...............79.3 Stock market value traded to GDP........................................33 .....■ ...............44.5 Number of listed companies per 10,000 people...................40 .....■ .................0.0
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............17 .....■ ...............20.0 Public domestic bond market capitalization to GDP .............17 .....■ ...............44.8 Private international bonds to GDP .......................................32 .....■ .................4.6 Public international bonds to GDP ........................................24 .....■ .................3.6
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
79 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................12 .....■ .................6.0 Venture capital availability .....................................................43 .....■ .................2.7 Ease of access to credit..........................................................2 .....■ .................5.0 Financing through local equity market ..................................30 .....■ .................4.2 Ease of access to loans ........................................................37 .....■ .................3.0 Foreign direct investment to GDP ........................................38 .....■ .................2.6
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................29 .....■ ........63,980.0 Commercial bank branches...................................................33 .....■ ...............12.2 Total number of ATMs.............................................................7 .....■ .............110.2 Total number of point of sale (POS) devices...........................9 .....■ ..........1,471.1 MFI borrowers’ penetration rate ...........................................17 .....■ .................1.6
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Canada Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................33.3
US$ bn
16.2%
GDP (US$ billions), 2008 ......................................................1,511.0 GDP (current prices) per capita, 2008 ............................45,428.2
38.7% 14.5%
GDP (PPP) as share (%) of world total, 2008 ........................1.89 Average rate of real GDP growth (%), 2004–08....................2.46
■ ■ ■ ■
Public debt securities .......915.8 Private debt securities......822.1 Banking deposits ............1,730.9 Equity securities .............2,186.6 Total
5,655.4
30.6%
Total/GDP: 393.8%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index........................................................6 5.0 1
2
3
4
5
6
7
Factors, policies, and institutions
80
1st pillar: Institutional environment .........................................12
5.6
Financial sector liberalization ....................................................12 Corporate governance.................................................................14 Legal and regulatory issues .......................................................12 Contract enforcement..................................................................16
6.9 5.1 5.1 5.4
2nd pillar: Business environment ...............................................4
5.9
Human capital .................................................................................9 Taxes.................................................................................................5 Infrastructure ................................................................................12 Cost of doing business ..................................................................2
5.3 6.0 5.8 6.7
3rd pillar: Financial stability........................................................7
5.6
Currency stability..........................................................................28 Banking system stability................................................................2 Risk of sovereign debt crisis ......................................................18
4.3 6.4 5.7 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services........................................8
4.8
Size index .......................................................................................10 Efficiency index.............................................................................17 Financial information disclosure..................................................3
4.4 5.6 4.0
5th pillar: Non-banking financial services ...............................7
4.0
IPO activity.....................................................................................21 M&A activity....................................................................................3 Insurance .......................................................................................20 Securitization...................................................................................8
2.3 6.5 2.9 4.2
6th pillar: Financial markets......................................................12
4.0
Foreign exchange markets .........................................................11 Derivatives markets .......................................................................6 Equity market development ........................................................10 Bond market development..........................................................21
2.3 6.5 4.5 3.0 1
Financial access 7th pillar: Financial access..........................................................3
4.7
Commercial access......................................................................10 Retail access...................................................................................5
4.4 5.1 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Canada Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.......13 .....■ ...............63.3 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ................................3 .....■ .................5.2 Efficacy of corporate boards ...................................................3 .....■ .................5.7 Reliance on professional management ...................................8 .....■ .................6.0 Willingness to delegate...........................................................9 .....■ .................5.1 Strength of auditing and reporting standards..........................6 .....■ .................6.1 Ethical behavior of firms..........................................................8 .....■ .................6.2 Protection of minority shareholders’ interests........................6 .....■ .................5.6 Official supervisory power ....................................................34 .....■ .................7.0 Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................17 .....■ .................3.6 Centralization of economic policymaking ..............................11 .....■ .................4.4 Regulation of securities exchanges ......................................15 .....■ .................5.2 Property rights.......................................................................10 .....■ .................6.2 Intellectual property protection .............................................14 .....■ .................5.5 Diversion of public funds.......................................................14 .....■ .................5.6 Public trust of politicians .......................................................12 .....■ .................4.2 Corruption perceptions index ..................................................7 .....■ .................8.7 Strength of legal rights index ................................................29 .....■ .................6.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .......................................7 .....■ .................5.1 Judicial independence .............................................................9 .....■ .................6.2 Irregular payments in judicial decisions ..................................8 .....■ .................6.0 Time to enforce a contract ....................................................35 .....■ .............570.0 Number of procedures to enforce a contract .......................33 .....■ ...............36.0 Strength of investor protection ...............................................4 .....■ .................8.3 Cost of enforcing contracts...................................................23 .....■ ...............22.3
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................2 .....■ .................6.0 Quality of math and science education...................................8 .....■ .................5.3 Extent of staff training...........................................................11 .....■ .................5.0 Local availability of specialized research and training services .............................................................11 .....■ .................5.6 Brain drain and ease of hiring foreign labor ..........................17 .....■ .................4.6 Tertiary enrollment ................................................................16 .....■ ...............62.4
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................10 .....■ .................6.0 Distortive effect on competition of taxes and subsidies ......25 .....■ .................4.3 Marginal tax variation ..............................................................2 .....■ ...............–6.0 Time to pay taxes ..................................................................13 .....■ .............119.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................11 .....■ .................5.9 Quality of telephone infrastructure .......................................11 .....■ .................6.8 Internet users ..........................................................................8 .....■ ...............73.0 Broadband Internet subscribers ..............................................8 .....■ ...............27.6 Telephone lines .......................................................................6 .....■ ...............55.5 Mobile telephone subscribers...............................................45 .....■ ...............61.7
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
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Canada Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business .....................................................3 .....■ .................0.5 Cost of registering property ..................................................16 .....■ .................1.8 Cost of closing a business ......................................................5 .....■ .................4.0 Time to start a business ..........................................................4 .....■ .................5.0 Time to register property.......................................................15 .....■ ...............17.0 Time to close a business.........................................................3 .....■ .................0.8
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
82
Currency stability Change in real effective exchange rate.................................14 .....■ .................3.5 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................25 .....■ .................0.6 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................18 .....■ .............–11.1
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator....................................................1 .....■ .................9.0 Manageability of private debt................................................30 .....■ ...............57.1 Aggregate measure of real estate bubbles...........................12 .....■ .................6.0
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ....................................13 .....■ .................5.4 Manageability of public debt .................................................46 .....■ ...............63.8 Credit default swap spreads.................................................n/a .........................n/a
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .......................................9 .....■ .............141.3 Central bank assets to GDP ..................................................14 .....■ .................3.2 Financial system deposits to GDP ..........................................5 .....■ .............132.4 M2 to GDP ............................................................................24 .....■ ...............75.8 Private credit to GDP...............................................................8 .....■ .............157.1 Bank deposits to GDP .............................................................6 .....■ .............132.4 Money market instruments to GDP......................................18 .....■ .................0.2
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................36 .....■ .................3.7 Bank overhead costs.............................................................27 .....■ .................2.6 Public ownership of banks ....................................................13 .....■ .................1.2 Bank operating costs to assets.............................................24 .....■ .................2.3 Non-performing bank loans to total loans ...............................9 .....■ .................1.1
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....■ .............100.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................18 .....■ .................1.3 IPO proceeds amount ...........................................................40 .....■ .................0.2 Share of world IPOs ................................................................9 .....■ .................3.0
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Canada Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share..................................................................3 .....■ .................4.7 M&A transaction value to GDP ...............................................8 .....■ ...............10.6 Share of total number of M&A deals ......................................4 .....■ .................5.3
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ....................................................9 .....■ ......100,148.0 Insurance density ..................................................................14 .....■ ..........3,046.2 Real growth of direct insurance premiums...........................38 .....■ .................0.0 Insurance penetration............................................................16 .....■ .................0.1 Relative value-added of insurance to GDP............................37 .....■ .................0.7
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................15 .....■ .................3.3 Share of total number of securitization deals .........................6 .....■ .................1.9
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................15 .....■ .................1.1 Outright forward foreign exchange turnover ........................15 .....■ .................1.0 Foreign exchange swap turnover..........................................11 .....■ .................1.9
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements .............................................................................7 .....■ .................1.8 Interest rate derivatives turnover: Swaps .............................14 .....■ .................0.7 Interest rate derivatives turnover: Options .............................6 .....■ .................1.3 Foreign exchange derivatives turnover: Currency swaps .......4 .....■ .................4.2 Foreign exchange derivatives turnover: Options ..................10 .....■ .................1.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................26 .....■ ...............84.2 Stock market capitalization to GDP.........................................7 .....■ .............147.4 Stock market value traded to GDP........................................17 .....■ .............124.1 Number of listed companies per 10,000 people.....................2 .....■ .................1.2
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............12 .....■ ...............30.0 Public domestic bond market capitalization to GDP ...............9 .....■ ...............51.1 Private international bonds to GDP .......................................19 .....■ ...............27.4 Public international bonds to GDP ........................................18 .....■ .................6.1
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
83 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication ...............................................2 .....■ .................6.4 Venture capital availability .....................................................16 .....■ .................3.8 Ease of access to credit........................................................42 .....■ .................2.9 Financing through local equity market ..................................12 .....■ .................4.7 Ease of access to loans ........................................................17 .....■ .................3.9 Foreign direct investment to GDP ........................................16 .....■ .................7.6
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches...................................................13 .....■ ...............23.7 Total number of ATMs.............................................................1 .....■ .............202.8 Total number of point of sale (POS) devices...........................5 .....■ ..........2,201.6 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Chile Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................16.8
1.9%
GDP (US$ billions), 2008 .........................................................169.6
US$ bn
10.3%
GDP (current prices) per capita, 2008 ............................10,123.8 GDP (PPP) as share (%) of world total, 2008 ........................0.36
26.5%
Average rate of real GDP growth (%), 2004–08....................4.81
61.3%
■ ■ ■ ■
Public debt securities ...........6.7 Private debt securities........35.8 Banking deposits .................92.1 Equity securities ................212.9 Total
347.6
Total/GDP: 212.1%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................31 3.6 1
2
3
4
5
6
7
Factors, policies, and institutions
84
1st pillar: Institutional environment .........................................30
4.3
Financial sector liberalization ....................................................33 Corporate governance.................................................................25 Legal and regulatory issues .......................................................29 Contract enforcement..................................................................25
3.8 4.7 3.9 4.7
2nd pillar: Business environment .............................................25
4.8
Human capital ...............................................................................25 Taxes...............................................................................................10 Infrastructure ................................................................................28 Cost of doing business ................................................................32
4.4 5.8 4.1 5.1
3rd pillar: Financial stability........................................................4
5.6
Currency stability..........................................................................17 Banking system stability................................................................3 Risk of sovereign debt crisis ......................................................19
4.7 6.3 5.7 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................36
3.4
Size index .......................................................................................37 Efficiency index.............................................................................38 Financial information disclosure................................................18
2.3 4.5 3.5
5th pillar: Non-banking financial services .............................39
1.9
IPO activity.....................................................................................49 M&A activity..................................................................................32 Insurance .......................................................................................25 Securitization.................................................................................29
1.1 1.6 2.7 2.1
6th pillar: Financial markets......................................................47
1.5
Foreign exchange markets .........................................................28 Derivatives markets .....................................................................35 Equity market development ........................................................34 Bond market development..........................................................40
1.1 1.0 2.1 1.4 1
Financial access 7th pillar: Financial access........................................................25
3.6
Commercial access........................................................................8 Retail access.................................................................................28
4.5 2.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
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Page 85
Chile Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................29 .....■ .................2.5 Commitments to WTO agreement on trade in services.......47 .....■ .................8.7 Domestic financial sector liberalization .................................30 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................12 .....■ .................4.8 Efficacy of corporate boards .................................................10 .....■ .................5.4 Reliance on professional management .................................18 .....■ .................5.4 Willingness to delegate.........................................................35 .....■ .................4.1 Strength of auditing and reporting standards........................16 .....■ .................5.6 Ethical behavior of firms........................................................17 .....■ .................5.5 Protection of minority shareholders’ interests......................18 .....■ .................5.0 Official supervisory power ....................................................20 .....■ ...............11.0 Private monitoring of the banking industry ...........................22 .....■ .................6.0
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................16 .....■ .................3.6 Centralization of economic policymaking ..............................48 .....■ .................2.4 Regulation of securities exchanges ......................................34 .....■ .................4.5 Property rights.......................................................................21 .....■ .................5.5 Intellectual property protection .............................................38 .....■ .................3.6 Diversion of public funds.......................................................28 .....■ .................3.9 Public trust of politicians .......................................................27 .....■ .................3.4 Corruption perceptions index ................................................18 .....■ .................6.9 Strength of legal rights index ................................................39 .....■ .................4.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................31 .....■ .................3.6 Judicial independence ...........................................................26 .....■ .................4.7 Irregular payments in judicial decisions ................................12 .....■ .................6.0 Time to enforce a contract ....................................................26 .....■ .............480.0 Number of procedures to enforce a contract .......................33 .....■ ...............36.0 Strength of investor protection .............................................21 .....■ .................6.0 Cost of enforcing contracts...................................................39 .....■ ...............28.6
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................14 .....■ .................5.4 Quality of math and science education.................................49 .....■ .................2.9 Extent of staff training...........................................................29 .....■ .................4.4 Local availability of specialized research and training services .............................................................29 .....■ .................4.6 Brain drain and ease of hiring foreign labor ............................7 .....■ .................5.0 Tertiary enrollment ................................................................29 .....■ ...............46.6
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................12 .....■ .................6.0 Distortive effect on competition of taxes and subsidies ........5 .....■ .................5.5 Marginal tax variation ..............................................................7 .....■ ...............–1.3 Time to pay taxes ..................................................................36 .....■ .............316.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................17 .....■ .................5.6 Quality of telephone infrastructure .......................................13 .....■ .................6.7 Internet users ........................................................................31 .....■ ...............30.9 Broadband Internet subscribers ............................................29 .....■ .................7.9 Telephone lines .....................................................................36 .....■ ...............20.7 Mobile telephone subscribers...............................................37 .....■ ...............83.7
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
85
2: Country/Economy Profiles
Part 1.r3
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Chile Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................27 .....■ .................7.5 Cost of registering property ..................................................15 .....■ .................1.3 Cost of closing a business ....................................................30 .....■ ...............15.0 Time to start a business ........................................................34 .....■ ...............27.0 Time to register property.......................................................25 .....■ ...............31.0 Time to close a business.......................................................49 .....■ .................4.5
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
86
Currency stability Change in real effective exchange rate...................................7 .....■ .................4.8 External vulnerability indicator...............................................24 .....■ .............108.7 Current account balance to GDP...........................................35 .....■ ...............–2.0 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................15 .....■ ...............34.1 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................23 .....■ .................1.3 Financial strengths indicator..................................................10 .....■ .................8.0 Manageability of private debt................................................25 .....■ ...............24.2 Aggregate measure of real estate bubbles.............................2 .....■ .................6.5
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................19 .....■ ...............18.0 Foreign currency sovereign rating.........................................22 .....■ ...............16.0 Aggregate macroprudential indicator ....................................39 .....■ .................4.7 Manageability of public debt ...................................................1 .....■ .................5.2 Credit default swap spreads .................................................22 .....■ .............127.8
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................31 .....■ ...............67.2 Central bank assets to GDP ..................................................16 .....■ .................2.4 Financial system deposits to GDP ........................................37 .....■ ...............49.1 M2 to GDP ............................................................................34 .....■ ...............59.3 Private credit to GDP.............................................................26 .....■ ...............80.2 Bank deposits to GDP ...........................................................37 .....■ ...............49.1 Money market instruments to GDP......................................27 .....■ .................0.0
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................51 .....■ .................2.5 Bank overhead costs.............................................................36 .....■ .................3.3 Public ownership of banks ....................................................36 .....■ ...............16.7 Bank operating costs to assets.............................................38 .....■ .................3.8 Non-performing bank loans to total loans ...............................5 .....■ .................0.9
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................27 .....■ ...............34.5 Public credit registry coverage ................................................7 .....■ ...............28.1
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................48 .....■ .................0.1 IPO proceeds amount ...........................................................47 .....■ .................0.1 Share of world IPOs ..............................................................47 .....■ .................0.1
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Chile Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................34 .....■ .................0.2 M&A transaction value to GDP .............................................26 .....■ .................3.7 Share of total number of M&A deals ....................................39 .....■ .................0.2
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................37 .....■ ..........6,169.0 Insurance density ..................................................................29 .....■ .............370.9 Real growth of direct insurance premiums...........................15 .....■ .................0.1 Insurance penetration............................................................28 .....■ .................0.0 Relative value-added of insurance to GDP............................16 .....■ .................1.6
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................25 .....■ .................2.2 Share of total number of securitization deals .......................22 .....■ .................0.3
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................31 .....■ .................0.2 Outright forward foreign exchange turnover ........................21 .....■ .................0.4 Foreign exchange swap turnover..........................................39 .....■ .................0.0
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................34 .....■ .................0.0 Interest rate derivatives turnover: Swaps .............................36 .....■ .................0.0 Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps .....31 .....■ .................0.1 Foreign exchange derivatives turnover: Options ..................40 .....■ .................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................46 .....■ ...............22.8 Stock market capitalization to GDP.......................................18 .....■ .............118.9 Stock market value traded to GDP........................................38 .....■ ...............27.1 Number of listed companies per 10,000 people...................19 .....■ .................0.1
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............19 .....■ ...............18.7 Public domestic bond market capitalization to GDP .............36 .....■ ...............10.5 Private international bonds to GDP .......................................30 .....■ .................5.5 Public international bonds to GDP ........................................31 .....■ .................1.8
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
87 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................19 .....■ .................5.9 Venture capital availability .....................................................22 .....■ .................3.5 Ease of access to credit........................................................19 .....■ .................3.9 Financing through local equity market ..................................10 .....■ .................4.7 Ease of access to loans ........................................................18 .....■ .................3.9 Foreign direct investment to GDP ........................................13 .....■ .................8.8
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................25 .....■ ........74,632.1 Commercial bank branches...................................................27 .....■ ...............15.0 Total number of ATMs...........................................................19 .....■ ...............55.6 Total number of point of sale (POS) devices.........................23 .....■ .............450.1 MFI borrowers’ penetration rate .............................................6 .....■ ...............15.3
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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China Key indicators
Financial assets by major type, 2007
Population (millions), 2008 ..................................................1,327.7
4.8%
GDP (US$ billions), 2008 ......................................................4,401.6
US$ bn
4.6%
GDP (current prices) per capita, 2008 ..............................3,315.3 GDP (PPP) as share (%) of world total, 2008 ......................11.40
49.6%
Average rate of real GDP growth (%), 2004–08..................10.83
41.0%
■ ■ ■ ■
Public debt securities .......598.6 Private debt securities......583.3 Banking deposits ............5,155.3 Equity securities .............6,226.3 Total
12,563.5
Total/GDP: 371.4%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................26 3.9 1
2
3
4
5
6
7
Factors, policies, and institutions
88
1st pillar: Institutional environment .........................................35
4.1
Financial sector liberalization ....................................................43 Corporate governance.................................................................35 Legal and regulatory issues .......................................................28 Contract enforcement..................................................................20
3.0 4.4 3.9 4.9
2nd pillar: Business environment .............................................40
4.1
Human capital ...............................................................................37 Taxes...............................................................................................40 Infrastructure ................................................................................43 Cost of doing business ................................................................31
4.0 4.1 3.1 5.1
3rd pillar: Financial stability......................................................23
4.8
Currency stability............................................................................7 Banking system stability..............................................................54 Risk of sovereign debt crisis ......................................................10
5.6 3.4 6.0 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................10
4.8
Size index .........................................................................................8 Efficiency index.............................................................................30 Financial information disclosure..................................................3
5.0 4.9 4.0
5th pillar: Non-banking financial services .............................12
3.3
IPO activity.......................................................................................1 M&A activity..................................................................................19 Insurance .......................................................................................26 Securitization.................................................................................44
6.7 2.6 2.7 1.3
6th pillar: Financial markets......................................................26
2.7
Foreign exchange markets .........................................................27 Derivatives markets....................................................................n/a Equity market development ........................................................13 Bond market development..........................................................29
1.2 n/a 4.1 2.4 1
Financial access 7th pillar: Financial access........................................................30
3.3
Commercial access......................................................................45 Retail access ...............................................................................n/a
3.3 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:22 PM
Page 89
China Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–1.1 Commitments to WTO agreement on trade in services.......27 .....■ ...............55.0 Domestic financial sector liberalization .................................45 .....■ .................2.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................18 .....■ .................4.6 Efficacy of corporate boards .................................................45 .....■ .................4.4 Reliance on professional management .................................31 .....■ .................4.9 Willingness to delegate.........................................................41 .....■ .................3.9 Strength of auditing and reporting standards........................42 .....■ .................4.7 Ethical behavior of firms........................................................31 .....■ .................4.3 Protection of minority shareholders’ interests......................39 .....■ .................4.3 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................10 .....■ .................3.9 Centralization of economic policymaking ..............................18 .....■ .................3.7 Regulation of securities exchanges ......................................50 .....■ .................4.0 Property rights.......................................................................25 .....■ .................5.2 Intellectual property protection .............................................28 .....■ .................4.0 Diversion of public funds.......................................................29 .....■ .................3.7 Public trust of politicians .......................................................15 .....■ .................4.0 Corruption perceptions index ................................................36 .....■ .................3.6 Strength of legal rights index ................................................29 .....■ .................6.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................17 .....■ .................4.4 Judicial independence ...........................................................36 .....■ .................3.9 Irregular payments in judicial decisions ................................32 .....■ .................4.3 Time to enforce a contract ....................................................19 .....■ .............406.0 Number of procedures to enforce a contract .......................25 .....■ ...............34.0 Strength of investor protection .............................................38 .....■ .................5.0 Cost of enforcing contracts.....................................................5 .....■ ...............11.1
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................42 .....■ .................4.0 Quality of math and science education.................................20 .....■ .................4.8 Extent of staff training...........................................................32 .....■ .................4.2 Local availability of specialized research and training services .............................................................33 .....■ .................4.4 Brain drain and ease of hiring foreign labor ..........................19 .....■ .................4.6 Tertiary enrollment ................................................................47 .....■ ...............21.6
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................33 .....■ .................4.3 Distortive effect on competition of taxes and subsidies ......18 .....■ .................4.7 Marginal tax variation ............................................................41 .....■ ...............13.0 Time to pay taxes ..................................................................46 .....■ .............504.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................36 .....■ .................4.0 Quality of telephone infrastructure .......................................40 .....■ .................5.8 Internet users ........................................................................46 .....■ ...............16.0 Broadband Internet subscribers ............................................32 .....■ .................5.0 Telephone lines .....................................................................28 .....■ ...............27.5 Mobile telephone subscribers...............................................48 .....■ ...............41.2
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
(Cont’d.)
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China Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................30 .....■ .................8.4 Cost of registering property ..................................................29 .....■ .................3.2 Cost of closing a business ....................................................45 .....■ ...............22.0 Time to start a business ........................................................47 .....■ ...............40.0 Time to register property.......................................................24 .....■ ...............29.0 Time to close a business.......................................................19 .....■ .................1.7
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
90
Currency stability Change in real effective exchange rate.................................41 .....■ ...............–0.3 External vulnerability indicator.................................................2 .....■ ...............16.0 Current account balance to GDP...........................................10 .....■ ...............10.0 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .......................1 .....■ ...............10.9 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................32 .....■ .................1.5 Financial strengths indicator..................................................47 .....■ .................2.0 Manageability of private debt................................................27 .....■ ...............28.0 Aggregate measure of real estate bubbles...........................42 .....■ .................1.8
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................24 .....■ ...............16.0 Foreign currency sovereign rating.........................................22 .....■ ...............16.0 Aggregate macroprudential indicator ......................................6 .....■ .................5.8 Manageability of public debt .................................................10 .....■ ...............15.6 Credit default swap spreads .................................................13 .....■ ...............87.6
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP ....................................n/a .........................n/a Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP .......................................n/a .........................n/a M2 to GDP ..............................................................................2 .....■ .............163.1 Private credit to GDP............................................................n/a .........................n/a Bank deposits to GDP .............................................................3 .....■ .............147.1 Money market instruments to GDP......................................27 .....■ .................0.0
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................34 .....■ .................3.8 Bank overhead costs...............................................................3 .....■ .................1.1 Public ownership of banks ....................................................48 .....■ ...............49.0 Bank operating costs to assets.............................................16 .....■ .................1.8 Non-performing bank loans to total loans .............................22 .....■ .................2.5
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................46 .....■ .................0.0 Public credit registry coverage ................................................1 .....■ ...............58.8
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................1 .....■ ...............19.3 IPO proceeds amount .............................................................8 .....■ .................1.2 Share of world IPOs ................................................................1 .....■ ...............12.9
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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China Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................15 .....■ .................1.2 M&A transaction value to GDP .............................................50 .....■ .................1.1 Share of total number of M&A deals ......................................8 .....■ .................2.8
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................10 .....■ ........92,483.0 Insurance density ..................................................................44 .....■ ...............69.6 Real growth of direct insurance premiums.............................7 .....■ .................0.2 Insurance penetration............................................................35 .....■ .................0.0 Relative value-added of insurance to GDP............................41 .....■ .................0.6
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................52 .....■ .................0.2 Share of total number of securitization deals .......................23 .....■ .................0.3
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................17 .....■ .................0.7 Outright forward foreign exchange turnover ........................40 .....■ .................0.0 Foreign exchange swap turnover..........................................36 .....■ .................0.0
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio.....................................................7 .....■ .............180.2 Stock market capitalization to GDP.......................................12 .....■ .............131.8 Stock market value traded to GDP..........................................7 .....■ .............237.5 Number of listed companies per 10,000 people...................48 .....■ .................0.0
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............13 .....■ ...............26.6 Public domestic bond market capitalization to GDP .............11 .....■ ...............49.0 Private international bonds to GDP .......................................40 .....■ .................1.4 Public international bonds to GDP ........................................38 .....■ .................0.2
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
91 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................46 .....■ .................4.0 Venture capital availability .....................................................28 .....■ .................3.2 Ease of access to credit........................................................17 .....■ .................4.0 Financing through local equity market ..................................42 .....■ .................3.9 Ease of access to loans ........................................................49 .....■ .................2.7 Foreign direct investment to GDP ........................................39 .....■ .................2.5
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ..................................................n/a .........................n/a Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ...........................................24 .....■ .................0.2
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Colombia Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................48.3
US$ bn
GDP (US$ billions), 2008 .........................................................240.7 38.6%
GDP (current prices) per capita, 2008 ..............................4,985.2 43.4%
GDP (PPP) as share (%) of world total, 2008 ........................0.58 Average rate of real GDP growth (%), 2004–08....................5.48
■ ■ ■ ■
Public debt securities .........90.8 Private debt securities..........4.2 Banking deposits .................38.2 Equity securities ................102.0 Total
1.8%
235.1
16.2%
Total/GDP: 113.1%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................46 2.9 1
2
3
4
5
6
7
Factors, policies, and institutions
92
1st pillar: Institutional environment .........................................49
3.3
Financial sector liberalization ....................................................45 Corporate governance.................................................................46 Legal and regulatory issues .......................................................45 Contract enforcement..................................................................53
2.9 4.1 3.2 3.1
2nd pillar: Business environment .............................................38
4.1
Human capital ...............................................................................45 Taxes...............................................................................................41 Infrastructure ................................................................................41 Cost of doing business ................................................................22
3.6 4.1 3.2 5.5
3rd pillar: Financial stability......................................................25
4.8
Currency stability..........................................................................12 Banking system stability..............................................................27 Risk of sovereign debt crisis ......................................................40
5.3 5.1 3.9 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................47
2.6
Size index .......................................................................................49 Efficiency index.............................................................................43 Financial information disclosure................................................33
1.2 4.0 2.3
5th pillar: Non-banking financial services .............................44
1.7
IPO activity.....................................................................................34 M&A activity..................................................................................40 Insurance .......................................................................................48 Securitization.................................................................................37
1.8 1.4 1.7 1.7
6th pillar: Financial markets......................................................55
1.3
Foreign exchange markets .........................................................39 Derivatives markets .....................................................................37 Equity market development ........................................................52 Bond market development..........................................................37
1.0 1.0 1.3 1.6 1
Financial access 7th pillar: Financial access........................................................44
2.9
Commercial access......................................................................39 Retail access.................................................................................38
3.4 2.4 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Colombia Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................42 .....■ ...............–0.1 Commitments to WTO agreement on trade in services.......42 .....■ ...............33.6 Domestic financial sector liberalization .................................34 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................49 .....■ .................3.7 Efficacy of corporate boards .................................................38 .....■ .................4.5 Reliance on professional management .................................43 .....■ .................4.2 Willingness to delegate.........................................................42 .....■ .................3.8 Strength of auditing and reporting standards........................46 .....■ .................4.2 Ethical behavior of firms........................................................37 .....■ .................3.9 Protection of minority shareholders’ interests......................45 .....■ .................4.1 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................39 .....■ .................2.7 Centralization of economic policymaking ..............................32 .....■ .................3.1 Regulation of securities exchanges ......................................46 .....■ .................4.1 Property rights.......................................................................43 .....■ .................4.0 Intellectual property protection .............................................46 .....■ .................3.0 Diversion of public funds.......................................................46 .....■ .................2.9 Public trust of politicians .......................................................40 .....■ .................2.2 Corruption perceptions index ................................................35 .....■ .................3.8 Strength of legal rights index ................................................36 .....■ .................5.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................41 .....■ .................3.0 Judicial independence ...........................................................41 .....■ .................3.6 Irregular payments in judicial decisions ................................38 .....■ .................3.7 Time to enforce a contract ....................................................53 .....■ ..........1,346.0 Number of procedures to enforce a contract .......................25 .....■ ...............34.0 Strength of investor protection .............................................16 .....■ .................6.3 Cost of enforcing contracts...................................................53 .....■ ...............52.6
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................37 .....■ .................4.2 Quality of math and science education.................................39 .....■ .................3.6 Extent of staff training...........................................................50 .....■ .................3.4 Local availability of specialized research and training services .............................................................39 .....■ .................4.1 Brain drain and ease of hiring foreign labor ..........................43 .....■ .................3.7 Tertiary enrollment ................................................................40 .....■ ...............31.8
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................38 .....■ .................3.7 Distortive effect on competition of taxes and subsidies ......46 .....■ .................3.8 Marginal tax variation ............................................................46 .....■ ...............15.1 Time to pay taxes ..................................................................29 .....■ .............256.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................43 .....■ .................3.4 Quality of telephone infrastructure .......................................34 .....■ .................6.0 Internet users ........................................................................34 .....■ ...............26.2 Broadband Internet subscribers ............................................39 .....■ .................2.6 Telephone lines .....................................................................41 .....■ ...............17.2 Mobile telephone subscribers...............................................42 .....■ ...............73.5
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
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Colombia Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................37 .....■ ...............14.1 Cost of registering property ..................................................19 .....■ .................2.4 Cost of closing a business ......................................................1 .....■ .................1.0 Time to start a business ........................................................46 .....■ ...............36.0 Time to register property.......................................................21 .....■ ...............23.0 Time to close a business.......................................................34 .....■ .................3.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
94
Currency stability Change in real effective exchange rate.................................19 .....■ .................2.5 External vulnerability indicator...............................................15 .....■ ...............54.0 Current account balance to GDP...........................................38 .....■ ...............–2.8 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) .......................8 .....■ ...............26.0 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................48 .....■ .................2.3 Financial strengths indicator..................................................37 .....■ .................4.0 Manageability of private debt..................................................6 .....■ .................1.9 Aggregate measure of real estate bubbles.............................9 .....■ .................6.1
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................35 .....■ ...............13.0 Foreign currency sovereign rating.........................................41 .....■ ...............10.0 Aggregate macroprudential indicator ....................................41 .....■ .................4.5 Manageability of public debt .................................................33 .....■ ...............42.6 Credit default swap spreads .................................................30 .....■ .............224.6
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................43 .....■ ...............44.0 Central bank assets to GDP ..................................................34 .....■ .................0.6 Financial system deposits to GDP ........................................51 .....■ ...............20.1 M2 to GDP ............................................................................55 .....■ ...............22.3 Private credit to GDP.............................................................40 .....■ ...............36.1 Bank deposits to GDP ...........................................................53 .....■ ...............20.1 Money market instruments to GDP......................................27 .....■ .................0.0
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................22 .....■ .................4.2 Bank overhead costs.............................................................47 .....■ .................5.3 Public ownership of banks ....................................................17 .....■ .................4.1 Bank operating costs to assets.............................................53 .....■ .................7.2 Non-performing bank loans to total loans .............................38 .....■ .................4.0
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................23 .....■ ...............42.5 Public credit registry coverage ..............................................24 .....■ .................0.0
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................31 .....■ .................0.5 IPO proceeds amount ...........................................................16 .....■ .................0.5 Share of world IPOs ..............................................................47 .....■ .................0.1
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Colombia Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................37 .....■ .................0.2 M&A transaction value to GDP .............................................38 .....■ .................2.6 Share of total number of M&A deals ....................................42 .....■ .................0.2
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................39 .....■ ..........4,103.0 Insurance density ..................................................................41 .....■ ...............88.9 Real growth of direct insurance premiums...........................24 .....■ .................0.1 Insurance penetration............................................................39 .....■ .................0.0 Relative value-added of insurance to GDP............................45 .....■ .................0.5
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................36 .....■ .................1.3 Share of total number of securitization deals .......................24 .....■ .................0.3
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................37 .....■ .................0.1 Outright forward foreign exchange turnover ........................31 .....■ .................0.1 Foreign exchange swap turnover..........................................40 .....■ .................0.0
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................30 .....■ .................0.0 Interest rate derivatives turnover: Swaps .............................38 .....■ .................0.0 Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps .....35 .....■ .................0.0 Foreign exchange derivatives turnover: Options ..................38 .....■ .................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................48 .....■ ...............13.0 Stock market capitalization to GDP.......................................40 .....■ ...............46.1 Stock market value traded to GDP........................................49 .....■ .................6.0 Number of listed companies per 10,000 people...................42 .....■ .................0.0
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............30 .....■ .................0.4 Public domestic bond market capitalization to GDP .............28 .....■ ...............22.8 Private international bonds to GDP .......................................39 .....■ .................1.5 Public international bonds to GDP ........................................15 .....■ .................7.2
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
95 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................41 .....■ .................4.3 Venture capital availability .....................................................44 .....■ .................2.6 Ease of access to credit........................................................20 .....■ .................3.9 Financing through local equity market ..................................46 .....■ .................3.6 Ease of access to loans ........................................................35 .....■ .................3.1 Foreign direct investment to GDP ........................................28 .....■ .................4.3
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................18 .....■ ......115,135.3 Commercial bank branches...................................................29 .....■ ...............13.7 Total number of ATMs...........................................................37 .....■ ...............26.3 Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ...........................................11 .....■ .................6.5
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Czech Republic Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................10.3
US$ bn
16.0% 25.8%
GDP (US$ billions), 2008 .........................................................217.1 GDP (current prices) per capita, 2008 ............................21,027.5
9.0%
GDP (PPP) as share (%) of world total, 2008 ........................0.38 Average rate of real GDP growth (%), 2004–08....................5.35
■ ■ ■ ■
Public debt securities .........45.4 Private debt securities........25.5 Banking deposits ...............139.8 Equity securities ..................73.4 Total
284.2
49.2%
Total/GDP: 163.4%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................33 3.5 1
2
3
4
5
6
7
Factors, policies, and institutions
96
1st pillar: Institutional environment .........................................29
4.3
Financial sector liberalization ....................................................27 Corporate governance.................................................................42 Legal and regulatory issues .......................................................32 Contract enforcement..................................................................37
5.0 4.3 3.7 4.2
2nd pillar: Business environment .............................................35
4.2
Human capital ...............................................................................18 Taxes...............................................................................................49 Infrastructure ................................................................................26 Cost of doing business ................................................................47
4.8 3.1 4.6 4.2
3rd pillar: Financial stability......................................................16
5.1
Currency stability..........................................................................22 Banking system stability..............................................................24 Risk of sovereign debt crisis ......................................................21
4.5 5.3 5.4 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................27
3.8
Size index .......................................................................................35 Efficiency index.............................................................................15 Financial information disclosure................................................22
2.4 5.6 3.2
5th pillar: Non-banking financial services .............................50
1.4
IPO activity.....................................................................................48 M&A activity..................................................................................43 Insurance .......................................................................................42 Securitization.................................................................................42
1.1 1.3 1.8 1.4
6th pillar: Financial markets......................................................33
2.1
Foreign exchange markets .........................................................31 Derivatives markets .....................................................................33 Equity market development ........................................................40 Bond market development..........................................................16
1.1 1.2 1.7 3.6 1
Financial access 7th pillar: Financial access........................................................27
3.5
Commercial access......................................................................25 Retail access.................................................................................19
3.9 3.0 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
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Czech Republic Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................25 .....■ .................1.7 Commitments to WTO agreement on trade in services.......24 .....■ ...............53.4 Domestic financial sector liberalization .................................37 .....■ .................2.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................20 .....■ .................4.6 Efficacy of corporate boards .................................................15 .....■ .................5.2 Reliance on professional management .................................20 .....■ .................5.3 Willingness to delegate.........................................................25 .....■ .................4.4 Strength of auditing and reporting standards........................26 .....■ .................5.3 Ethical behavior of firms........................................................38 .....■ .................3.8 Protection of minority shareholders’ interests......................46 .....■ .................4.1 Official supervisory power ....................................................24 .....■ ...............10.0 Private monitoring of the banking industry ...........................22 .....■ .................6.0
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................45 .....■ .................2.7 Centralization of economic policymaking ..............................12 .....■ .................4.3 Regulation of securities exchanges ......................................24 .....■ .................4.9 Property rights.......................................................................32 .....■ .................4.7 Intellectual property protection .............................................29 .....■ .................4.0 Diversion of public funds.......................................................42 .....■ .................3.0 Public trust of politicians .......................................................48 .....■ .................1.8 Corruption perceptions index ................................................25 .....■ .................5.2 Strength of legal rights index ................................................29 .....■ .................6.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................39 .....■ .................3.2 Judicial independence ...........................................................35 .....■ .................4.0 Irregular payments in judicial decisions ................................28 .....■ .................4.4 Time to enforce a contract ....................................................46 .....■ .............820.0 Number of procedures to enforce a contract .........................7 .....■ ...............27.0 Strength of investor protection .............................................38 .....■ .................5.0 Cost of enforcing contracts...................................................46 .....■ ...............33.0
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................25 .....■ .................4.7 Quality of math and science education...................................6 .....■ .................5.4 Extent of staff training...........................................................21 .....■ .................4.7 Local availability of specialized research and training services .............................................................16 .....■ .................5.3 Brain drain and ease of hiring foreign labor ..........................22 .....■ .................4.4 Tertiary enrollment ................................................................26 .....■ ...............49.8
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................31 .....■ .................4.4 Distortive effect on competition of taxes and subsidies ......36 .....■ .................4.1 Marginal tax variation ............................................................45 .....■ ...............15.0 Time to pay taxes ..................................................................52 .....■ .............930.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................30 .....■ .................4.5 Quality of telephone infrastructure .......................................25 .....■ .................6.4 Internet users ........................................................................26 .....■ ...............49.0 Broadband Internet subscribers ............................................24 .....■ ...............12.9 Telephone lines .....................................................................33 .....■ ...............23.6 Mobile telephone subscribers.................................................7 .....■ .............124.9
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
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2: Country/Economy Profiles
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Czech Republic Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................33 .....■ .................9.6 Cost of registering property ..................................................26 .....■ .................3.0 Cost of closing a business ....................................................30 .....■ ...............15.0 Time to start a business ........................................................23 .....■ ...............15.0 Time to register property.......................................................50 .....■ .............123.0 Time to close a business.......................................................54 .....■ .................6.5
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
98
Currency stability Change in real effective exchange rate.................................15 .....■ .................3.3 External vulnerability indicator...............................................20 .....■ ...............82.3 Current account balance to GDP...........................................39 .....■ ...............–3.1 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................20 .....■ ...............42.6 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................32 .....■ .................1.5 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt................................................21 .....■ ...............17.7 Aggregate measure of real estate bubbles...........................27 .....■ .................4.9
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................24 .....■ ...............16.0 Foreign currency sovereign rating.........................................26 .....■ ...............15.0 Aggregate macroprudential indicator ....................................14 .....■ .................5.4 Manageability of public debt .................................................14 .....■ ...............26.7 Credit default swap spreads .................................................23 .....■ .............128.0
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................36 .....■ ...............55.5 Central bank assets to GDP ..................................................38 .....■ .................0.2 Financial system deposits to GDP ........................................27 .....■ ...............60.3 M2 to GDP ............................................................................25 .....■ ...............75.8 Private credit to GDP.............................................................38 .....■ ...............42.4 Bank deposits to GDP ...........................................................27 .....■ ...............60.3 Money market instruments to GDP .....................................n/a .........................n/a
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................26 .....■ .................4.1 Bank overhead costs.............................................................18 .....■ .................2.1 Public ownership of banks ......................................................1 .....■ .................0.0 Bank operating costs to assets.............................................25 .....■ .................2.3 Non-performing bank loans to total loans .............................33 .....■ .................3.1
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................17 .....■ ...............65.2 Public credit registry coverage ..............................................16 .....■ .................4.6
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................47 .....■ .................0.1 IPO proceeds amount ...........................................................48 .....■ .................0.1 Share of world IPOs ..............................................................44 .....■ .................0.1
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Czech Republic Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................42 .....■ .................0.1 M&A transaction value to GDP .............................................43 .....■ .................1.8 Share of total number of M&A deals ....................................31 .....■ .................0.4
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................35 .....■ ..........6,548.0 Insurance density ..................................................................25 .....■ .............643.9 Real growth of direct insurance premiums...........................26 .....■ .................0.1 Insurance penetration............................................................26 .....■ .................0.0 Relative value-added of insurance to GDP............................50 .....■ .................0.2
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................41 .....■ .................1.0 Share of total number of securitization deals .......................39 .....■ .................0.1
United States ......................16.3 United States ......................60.3
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................35 .....■ .................0.1 Outright forward foreign exchange turnover ........................24 .....■ .................0.2 Foreign exchange swap turnover..........................................31 .....■ .................0.1
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................22 .....■ .................0.1 Interest rate derivatives turnover: Swaps .............................28 .....■ .................0.0 Interest rate derivatives turnover: Options ...........................28 .....■ .................0.0 Foreign exchange derivatives turnover: Currency swaps .....35 .....■ .................0.0 Foreign exchange derivatives turnover: Options ..................32 .....■ .................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................30 .....■ ...............68.4 Stock market capitalization to GDP.......................................46 .....■ ...............36.4 Stock market value traded to GDP........................................40 .....■ ...............24.9 Number of listed companies per 10,000 people...................36 .....■ .................0.0
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............21 .....■ ...............13.1 Public domestic bond market capitalization to GDP ...............7 .....■ ...............53.2 Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
99 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................32 .....■ .................4.8 Venture capital availability .....................................................39 .....■ .................2.9 Ease of access to credit..........................................................7 .....■ .................4.4 Financing through local equity market ..................................26 .....■ .................4.4 Ease of access to loans ........................................................25 .....■ .................3.5 Foreign direct investment to GDP ........................................23 .....■ .................5.2
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................13 .....■ ......167,955.3 Commercial bank branches...................................................16 .....■ ...............22.4 Total number of ATMs...........................................................32 .....■ ...............38.4 Total number of point of sale (POS) devices.........................19 .....■ .............651.1 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Denmark Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................5.5
US$ bn
6.6%
GDP (US$ billions), 2008 .........................................................342.9
22.6%
■ ■ ■ ■
GDP (current prices) per capita, 2008 ............................62,625.6 GDP (PPP) as share (%) of world total, 2008 ........................0.30 Average rate of real GDP growth (%), 2004–08....................1.72 49.8%
21.0%
Public debt securities .........81.5 Private debt securities......613.2 Banking deposits ...............257.8 Equity securities ................277.7 Total
1,230.3
Total/GDP: 396.2%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................10 4.6 1
2
3
4
5
6
7
Factors, policies, and institutions
100
1st pillar: Institutional environment ...........................................2
6.0
Financial sector liberalization ......................................................1 Corporate governance...................................................................6 Legal and regulatory issues .........................................................3 Contract enforcement....................................................................7
7.0 5.5 5.8 5.6
2nd pillar: Business environment ...............................................1
6.1
Human capital .................................................................................2 Taxes.................................................................................................6 Infrastructure ..................................................................................3 Cost of doing business ..................................................................5
5.7 5.9 6.4 6.5
3rd pillar: Financial stability......................................................19
5.0
Currency stability..........................................................................40 Banking system stability..............................................................30 Risk of sovereign debt crisis ........................................................5
3.9 5.0 6.1 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................17
4.3
Size index .......................................................................................11 Efficiency index...............................................................................5 Financial information disclosure................................................50
4.1 6.2 1.2
5th pillar: Non-banking financial services .............................21
2.8
IPO activity.....................................................................................46 M&A activity..................................................................................24 Insurance .......................................................................................11 Securitization.................................................................................10
1.2 2.0 3.8 4.1
6th pillar: Financial markets......................................................17
3.6
Foreign exchange markets .........................................................10 Derivatives markets .......................................................................9 Equity market development ........................................................26 Bond market development..........................................................17
3.0 5.4 2.9 3.5 1
Financial access 7th pillar: Financial access..........................................................6
4.6
Commercial access......................................................................24 Retail access...................................................................................3
4.0 5.2 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
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Page 101
Denmark Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.........1 .....■ ...............73.5 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................16 .....■ .................4.6 Efficacy of corporate boards ...................................................8 .....■ .................5.5 Reliance on professional management ...................................4 .....■ .................6.1 Willingness to delegate...........................................................2 .....■ .................5.9 Strength of auditing and reporting standards........................11 .....■ .................5.9 Ethical behavior of firms..........................................................3 .....■ .................6.6 Protection of minority shareholders’ interests........................4 .....■ .................5.7 Official supervisory power ....................................................24 .....■ ...............10.0 Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................13 .....■ .................3.8 Centralization of economic policymaking ..............................15 .....■ .................3.9 Regulation of securities exchanges ........................................6 .....■ .................5.7 Property rights.........................................................................2 .....■ .................6.5 Intellectual property protection ...............................................6 .....■ .................6.0 Diversion of public funds.........................................................1 .....■ .................6.6 Public trust of politicians .........................................................2 .....■ .................6.1 Corruption perceptions index ..................................................1 .....■ .................9.3 Strength of legal rights index ..................................................4 .....■ .................9.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .......................................2 .....■ .................6.0 Judicial independence .............................................................2 .....■ .................6.5 Irregular payments in judicial decisions ..................................4 .....■ .................6.4 Time to enforce a contract ....................................................14 .....■ .............380.0 Number of procedures to enforce a contract .......................25 .....■ ...............34.0 Strength of investor protection .............................................16 .....■ .................6.3 Cost of enforcing contracts...................................................25 .....■ ...............23.3
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................8 .....■ .................5.6 Quality of math and science education...................................9 .....■ .................5.2 Extent of staff training.............................................................4 .....■ .................5.6 Local availability of specialized research and training services ...............................................................6 .....■ .................5.9 Brain drain and ease of hiring foreign labor ..........................13 .....■ .................4.8 Tertiary enrollment ..................................................................4 .....■ ...............79.9
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................3 .....■ .................6.5 Distortive effect on competition of taxes and subsidies ......11 .....■ .................4.9 Marginal tax variation ............................................................13 .....■ .................1.5 Time to pay taxes ..................................................................16 .....■ .............135.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................8 .....■ .................6.3 Quality of telephone infrastructure .........................................9 .....■ .................6.8 Internet users ..........................................................................3 .....■ ...............81.0 Broadband Internet subscribers ..............................................1 .....■ ...............36.0 Telephone lines .......................................................................9 .....■ ...............51.9 Mobile telephone subscribers...............................................18 .....■ .............114.5
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
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Denmark Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business .....................................................1 .....■ .................0.0 Cost of registering property ....................................................9 .....■ .................0.6 Cost of closing a business ......................................................5 .....■ .................4.0 Time to start a business ..........................................................6 .....■ .................6.0 Time to register property.......................................................34 .....■ ...............42.0 Time to close a business.......................................................11 .....■ .................1.1
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
102
Currency stability Change in real effective exchange rate.................................33 .....■ .................0.3 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................27 .....■ .................0.5 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................16 .....■ ...............–4.0
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator....................................................1 .....■ .................9.0 Manageability of private debt................................................43 .....■ .............249.9 Aggregate measure of real estate bubbles...........................26 .....■ .................4.9
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ....................................36 .....■ .................4.8 Manageability of public debt .................................................19 .....■ ...............32.8 Credit default swap spreads ...................................................9 .....■ ...............62.1
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .......................................1 .....■ .............199.3 Central bank assets to GDP ..................................................35 .....■ .................0.5 Financial system deposits to GDP ........................................24 .....■ ...............62.3 M2 to GDP ............................................................................27 .....■ ...............72.7 Private credit to GDP...............................................................2 .....■ .............190.9 Bank deposits to GDP ...........................................................24 .....■ ...............62.3 Money market instruments to GDP........................................6 .....■ .................5.5
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................16 .....■ .................4.5 Bank overhead costs.............................................................28 .....■ .................2.6 Public ownership of banks ......................................................1 .....■ .................0.0 Bank operating costs to assets...............................................5 .....■ .................1.0 Non-performing bank loans to total loans ...............................1 .....■ .................0.3
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................42 .....■ .................5.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................45 .....■ .................0.1 IPO proceeds amount ...........................................................49 .....■ .................0.1 Share of world IPOs ..............................................................30 .....■ .................0.4
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Denmark Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................26 .....■ .................0.4 M&A transaction value to GDP .............................................20 .....■ .................4.4 Share of total number of M&A deals ....................................23 .....■ .................0.8
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................21 .....■ ........28,435.0 Insurance density ....................................................................5 .....■ ..........5,103.1 Real growth of direct insurance premiums...........................21 .....■ .................0.1 Insurance penetration............................................................11 .....■ .................0.1 Relative value-added of insurance to GDP............................28 .....■ .................1.0
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ..............................................................3 .....■ .................8.5 Share of total number of securitization deals .......................35 .....■ .................0.2
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................12 .....■ .................1.2 Outright forward foreign exchange turnover ..........................9 .....■ .................2.3 Foreign exchange swap turnover............................................9 .....■ .................2.8
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements .............................................................................9 .....■ .................1.1 Interest rate derivatives turnover: Swaps .............................16 .....■ .................0.3 Interest rate derivatives turnover: Options ...........................11 .....■ .................0.5 Foreign exchange derivatives turnover: Currency swaps .......9 .....■ .................1.9 Foreign exchange derivatives turnover: Options ..................15 .....■ .................0.6
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................21 .....■ ...............94.6 Stock market capitalization to GDP.......................................30 .....■ ...............83.1 Stock market value traded to GDP........................................25 .....■ ...............78.6 Number of listed companies per 10,000 people..................n/a .........................n/a
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP..............1 .....■ .............202.7 Public domestic bond market capitalization to GDP .............27 .....■ ...............24.6 Private international bonds to GDP .......................................16 .....■ ...............47.3 Public international bonds to GDP ........................................20 .....■ .................5.5
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
103 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................14 .....■ .................6.0 Venture capital availability .....................................................15 .....■ .................3.8 Ease of access to credit........................................................43 .....■ .................2.9 Financing through local equity market ..................................37 .....■ .................4.1 Ease of access to loans ..........................................................9 .....■ .................4.3 Foreign direct investment to GDP ........................................35 .....■ .................3.6
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts .....................................3 .....■ ......270,610.0 Commercial bank branches.....................................................3 .....■ ...............46.7 Total number of ATMs...........................................................13 .....■ ...............70.4 Total number of point of sale (POS) devices...........................7 .....■ ..........2,022.8 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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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%
GDP (current prices) per capita, 2008 ..............................2,160.9 GDP (PPP) as share (%) of world total, 2008 ........................0.64 Average rate of real GDP growth (%), 2004–08....................5.93
■ ■ ■ ■
0.8%
Public debt securities .......131.1 Private debt securities..........3.1 Banking deposits ...............114.5 Equity securities ................139.3 Total
388.0
29.5%
Total/GDP: 297.7%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................36 3.3 1
2
3
4
5
6
7
Factors, policies, and institutions
104
1st pillar: Institutional environment .........................................38
3.9
Financial sector liberalization ....................................................30 Corporate governance.................................................................36 Legal and regulatory issues .......................................................43 Contract enforcement..................................................................46
4.4 4.4 3.2 3.5
2nd pillar: Business environment .............................................46
3.7
Human capital ...............................................................................53 Taxes...............................................................................................45 Infrastructure ................................................................................46 Cost of doing business ................................................................38
3.3 3.7 2.9 4.8
3rd pillar: Financial stability......................................................45
4.3
Currency stability..........................................................................31 Banking system stability..............................................................19 Risk of sovereign debt crisis ......................................................47
4.3 5.4 2.7 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................40
3.1
Size index .......................................................................................17 Efficiency index.............................................................................51 Financial information disclosure................................................48
3.9 3.3 1.3
5th pillar: Non-banking financial services .............................31
2.2
IPO activity.....................................................................................38 M&A activity..................................................................................25 Insurance .......................................................................................18 Securitization.................................................................................30
1.6 2.0 3.0 2.0
6th pillar: Financial markets......................................................34
2.0
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................37 Bond market development ........................................................n/a
n/a n/a 2.0 n/a 1
Financial access 7th pillar: Financial access........................................................11
4.2
Commercial access......................................................................16 Retail access ...............................................................................n/a
4.2 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Egypt Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................23 .....■ .................2.5 Commitments to WTO agreement on trade in services.......35 .....■ ...............39.7 Domestic financial sector liberalization .................................43 .....■ .................2.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................48 .....■ .................3.8 Efficacy of corporate boards .................................................36 .....■ .................4.6 Reliance on professional management .................................54 .....■ .................3.7 Willingness to delegate.........................................................24 .....■ .................4.4 Strength of auditing and reporting standards........................30 .....■ .................5.1 Ethical behavior of firms........................................................30 .....■ .................4.4 Protection of minority shareholders’ interests......................32 .....■ .................4.6 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................25 .....■ .................3.2 Centralization of economic policymaking ..............................50 .....■ .................2.3 Regulation of securities exchanges ......................................39 .....■ .................4.3 Property rights.......................................................................37 .....■ .................4.4 Intellectual property protection .............................................35 .....■ .................3.7 Diversion of public funds.......................................................40 .....■ .................3.1 Public trust of politicians .......................................................21 .....■ .................3.5 Corruption perceptions index ................................................45 .....■ .................2.8 Strength of legal rights index ................................................49 .....■ .................3.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................33 .....■ .................3.5 Judicial independence ...........................................................37 .....■ .................3.9 Irregular payments in judicial decisions ................................44 .....■ .................3.4 Time to enforce a contract ....................................................51 .....■ ..........1,010.0 Number of procedures to enforce a contract .......................48 .....■ ...............42.0 Strength of investor protection .............................................34 .....■ .................5.3 Cost of enforcing contracts...................................................34 .....■ ...............26.2
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................55 .....■ .................3.3 Quality of math and science education.................................52 .....■ .................2.7 Extent of staff training...........................................................51 .....■ .................3.4 Local availability of specialized research and training services .............................................................47 .....■ .................3.9 Brain drain and ease of hiring foreign labor ..........................49 .....■ .................3.4 Tertiary enrollment ................................................................36 .....■ ...............34.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................44 .....■ .................3.4 Distortive effect on competition of taxes and subsidies ......30 .....■ .................4.1 Marginal tax variation ............................................................24 .....■ .................6.4 Time to pay taxes ..................................................................49 .....■ .............711.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................31 .....■ .................4.4 Quality of telephone infrastructure .......................................18 .....■ .................6.6 Internet users ........................................................................47 .....■ ...............14.0 Broadband Internet subscribers ............................................49 .....■ .................0.6 Telephone lines .....................................................................44 .....■ ...............14.9 Mobile telephone subscribers...............................................49 .....■ ...............39.8
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
(Cont’d.)
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2: Country/Economy Profiles
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Egypt Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................45 .....■ ...............18.3 Cost of registering property ..................................................11 .....■ .................0.9 Cost of closing a business ....................................................45 .....■ ...............22.0 Time to start a business ..........................................................9 .....■ .................7.0 Time to register property.......................................................45 .....■ ...............72.0 Time to close a business.......................................................46 .....■ .................4.2
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
106
Currency stability Change in real effective exchange rate.................................36 .....■ .................0.0 External vulnerability indicator.................................................1 .....■ ...............13.9 Current account balance to GDP...........................................26 .....■ .................0.5 Dollarization vulnerability indicator ........................................37 .....■ ...............62.8 External debt to GDP (developing economies) .......................5 .....■ ...............23.4 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................17 .....■ .................0.8 Financial strengths indicator..................................................42 .....■ .................3.0 Manageability of private debt..................................................5 .....■ .................1.9 Aggregate measure of real estate bubbles.............................5 .....■ .................6.4
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................41 .....■ ...............11.0 Foreign currency sovereign rating.........................................41 .....■ ...............10.0 Aggregate macroprudential indicator ....................................46 .....■ .................4.3 Manageability of public debt .................................................51 .....■ ...............86.5 Credit default swap spreads .................................................38 .....■ .............325.0
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................30 .....■ ...............68.9 Central bank assets to GDP ....................................................1 .....■ ...............27.9 Financial system deposits to GDP ........................................19 .....■ ...............77.5 M2 to GDP ............................................................................20 .....■ ...............90.3 Private credit to GDP.............................................................34 .....■ ...............43.9 Bank deposits to GDP ...........................................................20 .....■ ...............77.5 Money market instruments to GDP .....................................n/a .........................n/a
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................35 .....■ .................3.8 Bank overhead costs.............................................................19 .....■ .................2.1 Public ownership of banks ....................................................54 .....■ ...............68.3 Bank operating costs to assets.............................................30 .....■ .................3.1 Non-performing bank loans to total loans .............................50 .....■ ...............16.5
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................43 .....■ .................4.7 Public credit registry coverage ..............................................17 .....■ .................2.2
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................41 .....■ .................0.2 IPO proceeds amount ...........................................................25 .....■ .................0.4 Share of world IPOs ..............................................................44 .....■ .................0.1
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Egypt Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................30 .....■ .................0.3 M&A transaction value to GDP .............................................12 .....■ .................6.2 Share of total number of M&A deals ....................................44 .....■ .................0.1
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................48 .....■ ..........1,090.0 Insurance density ..................................................................49 .....■ ...............14.4 Real growth of direct insurance premiums...........................14 .....■ .................0.1 Insurance penetration............................................................48 .....■ .................0.0 Relative value-added of insurance to GDP..............................3 .....■ .................3.3
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................17 .....■ .................2.9 Share of total number of securitization deals .......................48 .....■ .................0.1
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................42 .....■ ...............45.4 Stock market capitalization to GDP.......................................27 .....■ ...............91.2 Stock market value traded to GDP........................................35 .....■ ...............41.4 Number of listed companies per 10,000 people...................29 .....■ .................0.1
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
107 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................48 .....■ .................3.8 Venture capital availability .....................................................26 .....■ .................3.4 Ease of access to credit..........................................................4 .....■ .................4.6 Financing through local equity market ..................................15 .....■ .................4.6 Ease of access to loans ........................................................29 .....■ .................3.4 Foreign direct investment to GDP ........................................11 .....■ .................8.9
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ..................................................n/a .........................n/a Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ...........................................10 .....■ .................7.2
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Finland Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................5.3
US$ bn
12.2%
GDP (US$ billions), 2008 .........................................................274.0 GDP (current prices) per capita, 2008 ............................51,989.4
17.0%
GDP (PPP) as share (%) of world total, 2008 ........................0.28
51.4%
Average rate of real GDP growth (%), 2004–08....................3.30
■ ■ ■ ■
Public debt securities .........87.8 Private debt securities......121.7 Banking deposits ...............139.3 Equity securities ................369.2 Total
717.9
19.4%
Total/GDP: 291.5%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................19 4.2 1
2
3
4
5
6
7
Factors, policies, and institutions
108
1st pillar: Institutional environment ...........................................8
5.7
Financial sector liberalization ....................................................21 Corporate governance.................................................................16 Legal and regulatory issues .........................................................4 Contract enforcement....................................................................3
6.0 5.1 5.6 6.0
2nd pillar: Business environment ...............................................6
5.9
Human capital .................................................................................1 Taxes...............................................................................................19 Infrastructure ..................................................................................7 Cost of doing business ..................................................................6
5.8 5.3 6.1 6.3
3rd pillar: Financial stability......................................................11
5.3
Currency stability..........................................................................30 Banking system stability..............................................................23 Risk of sovereign debt crisis ........................................................4
4.3 5.3 6.2 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................29
3.8
Size index .......................................................................................32 Efficiency index...............................................................................6 Financial information disclosure................................................42
2.6 6.2 1.4
5th pillar: Non-banking financial services .............................30
2.3
IPO activity.....................................................................................43 M&A activity..................................................................................26 Insurance .......................................................................................22 Securitization.................................................................................17
1.4 1.9 2.7 3.0
6th pillar: Financial markets......................................................19
3.4
Foreign exchange markets .........................................................29 Derivatives markets .....................................................................24 Equity market development ..........................................................8 Bond market development..........................................................10
1.1 1.9 5.0 4.2 1
Financial access 7th pillar: Financial access........................................................28
3.4
Commercial access......................................................................13 Retail access.................................................................................33
4.3 2.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Finland Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................1.7 Commitments to WTO agreement on trade in services.......31 .....■ ...............29.9 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................30 .....■ .................4.5 Efficacy of corporate boards ...................................................5 .....■ .................5.6 Reliance on professional management ...................................3 .....■ .................6.2 Willingness to delegate...........................................................6 .....■ .................5.4 Strength of auditing and reporting standards..........................2 .....■ .................6.2 Ethical behavior of firms..........................................................2 .....■ .................6.6 Protection of minority shareholders’ interests........................2 .....■ .................5.9 Official supervisory power ....................................................28 .....■ .................9.0 Private monitoring of the banking industry ...........................22 .....■ .................6.0
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation ...........................................5 .....■ .................4.3 Centralization of economic policymaking ..............................13 .....■ .................4.2 Regulation of securities exchanges ......................................10 .....■ .................5.6 Property rights.........................................................................3 .....■ .................6.5 Intellectual property protection ...............................................3 .....■ .................6.1 Diversion of public funds.........................................................4 .....■ .................6.4 Public trust of politicians .........................................................7 .....■ .................5.5 Corruption perceptions index ..................................................4 .....■ .................9.0 Strength of legal rights index ................................................18 .....■ .................7.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .......................................6 .....■ .................5.4 Judicial independence .............................................................3 .....■ .................6.5 Irregular payments in judicial decisions ..................................3 .....■ .................6.4 Time to enforce a contract ......................................................5 .....■ .............235.0 Number of procedures to enforce a contract .......................20 .....■ ...............32.0 Strength of investor protection .............................................25 .....■ .................5.7 Cost of enforcing contracts.....................................................4 .....■ ...............10.4
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................10 .....■ .................5.4 Quality of math and science education...................................2 .....■ .................6.4 Extent of staff training.............................................................8 .....■ .................5.3 Local availability of specialized research and training services ...............................................................5 .....■ .................5.9 Brain drain and ease of hiring foreign labor ............................9 .....■ .................5.0 Tertiary enrollment ..................................................................1 .....■ ...............93.2
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................4 .....■ .................6.5 Distortive effect on competition of taxes and subsidies ......15 .....■ .................4.7 Marginal tax variation ............................................................31 .....■ .................9.0 Time to pay taxes ..................................................................32 .....■ .............269.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................7 .....■ .................6.5 Quality of telephone infrastructure .........................................1 .....■ .................6.9 Internet users ..........................................................................5 .....■ ...............79.0 Broadband Internet subscribers ..............................................6 .....■ ...............30.6 Telephone lines .....................................................................22 .....■ ...............33.0 Mobile telephone subscribers...............................................15 .....■ .............115.2
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
(Cont’d.)
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2: Country/Economy Profiles
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Finland Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................10 .....■ .................1.0 Cost of registering property ..................................................31 .....■ .................4.0 Cost of closing a business ......................................................5 .....■ .................4.0 Time to start a business ........................................................21 .....■ ...............14.0 Time to register property.......................................................12 .....■ ...............14.0 Time to close a business.........................................................5 .....■ .................0.9
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
110
Currency stability Change in real effective exchange rate.................................22 .....■ .................1.8 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................20 .....■ .................2.5 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................7 .....■ ................-0.2
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................23 .....■ .................1.3 Financial strengths indicator....................................................1 .....■ .................9.0 Manageability of private debt................................................32 .....■ ...............70.9 Aggregate measure of real estate bubbles...........................36 .....■ .................3.8
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ....................................23 .....■ .................5.1 Manageability of public debt .................................................20 .....■ ...............33.4 Credit default swap spreads ...................................................2 .....■ ...............37.5
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................26 .....■ ...............81.6 Central bank assets to GDP ..................................................39 .....■ .................0.2 Financial system deposits to GDP ........................................34 .....■ ...............49.7 M2 to GDP ............................................................................31 .....■ ...............64.0 Private credit to GDP.............................................................27 .....■ ...............77.8 Bank deposits to GDP ...........................................................34 .....■ ...............49.7 Money market instruments to GDP........................................9 .....■ .................3.7
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................29 .....■ .................4.0 Bank overhead costs.............................................................15 .....■ .................1.9 Public ownership of banks ....................................................12 .....■ .................0.6 Bank operating costs to assets...............................................2 .....■ .................0.9 Non-performing bank loans to total loans ...............................2 .....■ .................0.4
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................34 .....■ ...............14.8 Public credit registry coverage ..............................................24 .....■ .................0.0
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................39 .....■ .................0.3 IPO proceeds amount ...........................................................36 .....■ .................0.2 Share of world IPOs ..............................................................37 .....■ .................0.3
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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Finland Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................28 .....■ .................0.3 M&A transaction value to GDP .............................................22 .....■ .................4.1 Share of total number of M&A deals ....................................22 .....■ .................0.8
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................24 .....■ ........20,630.0 Insurance density ....................................................................9 .....■ ..........3,923.8 Real growth of direct insurance premiums...........................48 .....■ .................0.0 Insurance penetration............................................................13 .....■ .................0.1 Relative value-added of insurance to GDP............................46 .....■ .................0.5
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ..............................................................9 .....■ .................5.3 Share of total number of securitization deals .......................41 .....■ .................0.1
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................41 .....■ .................0.1 Outright forward foreign exchange turnover ........................33 .....■ .................0.1 Foreign exchange swap turnover..........................................24 .....■ .................0.3
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................25 .....■ .................0.0 Interest rate derivatives turnover: Swaps .............................22 .....■ .................0.1 Interest rate derivatives turnover: Options ...........................13 .....■ .................0.3 Foreign exchange derivatives turnover: Currency swaps .....28 .....■ .................0.1 Foreign exchange derivatives turnover: Options ..................27 .....■ .................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................10 .....■ .............170.4 Stock market capitalization to GDP.......................................13 .....■ .............129.6 Stock market value traded to GDP..........................................8 .....■ .............220.9 Number of listed companies per 10,000 people..................n/a .........................n/a
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP..............9 .....■ ...............38.4 Public domestic bond market capitalization to GDP .............12 .....■ ...............48.8 Private international bonds to GDP .......................................18 .....■ ...............32.5 Public international bonds to GDP ..........................................4 .....■ ...............32.7
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
111 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................13 .....■ .................6.0 Venture capital availability .......................................................5 .....■ .................4.3 Ease of access to credit........................................................22 .....■ .................3.7 Financing through local equity market ..................................25 .....■ .................4.4 Ease of access to loans ..........................................................1 .....■ .................4.7 Foreign direct investment to GDP ........................................36 .....■ .................3.4
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches...................................................21 .....■ ...............18.5 Total number of ATMs...........................................................31 .....■ ...............38.7 Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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France Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................62.3
US$ bn
17.8% 29.8%
GDP (US$ billions), 2008 ......................................................2,865.7 GDP (current prices) per capita, 2008 ............................46,015.9 GDP (PPP) as share (%) of world total, 2008 ........................3.08 Average rate of real GDP growth (%), 2004–08....................1.86
31.3%
■ ■ ■ ■
Public debt securities ....1,655.3 Private debt securities...2,907.9 Banking deposits ............1,958.2 Equity securities .............2,771.2 Total
21.1%
9,292.6
Total/GDP: 358.3%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................11 4.6 1
2
3
4
5
6
7
Factors, policies, and institutions
112
1st pillar: Institutional environment .........................................18
5.4
Financial sector liberalization ....................................................11 Corporate governance.................................................................28 Legal and regulatory issues .......................................................18 Contract enforcement..................................................................17
6.9 4.7 4.6 5.2
2nd pillar: Business environment .............................................20
5.1
Human capital ...............................................................................11 Taxes...............................................................................................35 Infrastructure ................................................................................15 Cost of doing business ................................................................29
5.2 4.3 5.7 5.1
3rd pillar: Financial stability......................................................12
5.3
Currency stability..........................................................................37 Banking system stability................................................................8 Risk of sovereign debt crisis ......................................................12
4.0 5.7 5.9 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................23
4.1
Size index .......................................................................................23 Efficiency index.............................................................................14 Financial information disclosure................................................28
3.2 5.7 2.4
5th pillar: Non-banking financial services ...............................8
4.0
IPO activity.....................................................................................18 M&A activity....................................................................................6 Insurance .......................................................................................10 Securitization.................................................................................11
2.8 5.0 4.0 4.1
6th pillar: Financial markets........................................................8
4.4
Foreign exchange markets ...........................................................9 Derivatives markets .......................................................................1 Equity market development ........................................................22 Bond market development............................................................7
3.5 7.0 3.3 4.5 1
Financial access 7th pillar: Financial access........................................................19
3.9
Commercial access......................................................................18 Retail access.................................................................................10
4.1 3.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:22 PM
Page 113
France Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................22 .....■ .................1.5 Commitments to WTO agreement on trade in services.........1 .....■ ...............72.4 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 Turkey..................................83.5 Multiple (33) ..........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ................................8 .....■ .................5.0 Efficacy of corporate boards .................................................22 .....■ .................5.1 Reliance on professional management .................................23 .....■ .................5.2 Willingness to delegate.........................................................32 .....■ .................4.2 Strength of auditing and reporting standards........................17 .....■ .................5.6 Ethical behavior of firms........................................................20 .....■ .................5.4 Protection of minority shareholders’ interests......................26 .....■ .................4.9 Official supervisory power ....................................................28 .....■ .................9.0 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.2 South Africa...........................6.2 Sweden .................................6.7 Sweden .................................6.0 Multiple (3) ..........................14.0 South Africa...........................9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................51 .....■ .................2.3 Centralization of economic policymaking ..............................36 .....■ .................2.9 Regulation of securities exchanges ......................................13 .....■ .................5.3 Property rights.......................................................................16 .....■ .................5.8 Intellectual property protection ...............................................8 .....■ .................5.8 Diversion of public funds.......................................................21 .....■ .................4.9 Public trust of politicians .......................................................16 .....■ .................3.9 Corruption perceptions index ................................................18 .....■ .................6.9 Strength of legal rights index ................................................18 .....■ .................7.0
Singapore ..............................5.6 Switzerland............................5.7 Sweden .................................5.9 Switzerland............................6.5 Singapore ..............................6.2 Denmark................................6.6 Singapore ..............................6.4 Multiple (2) ............................9.3 Multiple (3) ..........................10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................12 .....■ .................4.7 Judicial independence ...........................................................25 .....■ .................4.8 Irregular payments in judicial decisions ................................23 .....■ .................5.1 Time to enforce a contract ....................................................11 .....■ .............331.0 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Strength of investor protection .............................................34 .....■ .................5.3 Cost of enforcing contracts...................................................18 .....■ ...............17.4
Singapore ..............................6.5 Sweden .................................6.6 Singapore ..............................6.6 Singapore ..........................150.0 Ireland..................................20.0 Singapore ..............................9.3 United States ........................9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................3 .....■ .................5.9 Quality of math and science education...................................5 .....■ .................5.5 Extent of staff training...........................................................15 .....■ .................4.9 Local availability of specialized research and training services ...............................................................8 .....■ .................5.8 Brain drain and ease of hiring foreign labor ..........................34 .....■ .................4.1 Tertiary enrollment ................................................................23 .....■ ...............56.2
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................23 .....■ .................5.1 Distortive effect on competition of taxes and subsidies ......22 .....■ .................4.5 Marginal tax variation ............................................................51 .....■ ...............26.1 Time to pay taxes ..................................................................15 .....■ .............132.0
Singapore ..............................6.5 Hong Kong SAR ....................6.1 Germany ..............................–6.9 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................5 .....■ .................6.6 Quality of telephone infrastructure .......................................12 .....■ .................6.7 Internet users ........................................................................25 .....■ ...............51.2 Broadband Internet subscribers ............................................12 .....■ ...............25.2 Telephone lines .......................................................................5 .....■ ...............56.5 Mobile telephone subscribers...............................................32 .....■ ...............89.8
Switzerland............................6.8 Finland ...................................6.9 Norway ................................85.0 Denmark..............................36.0 Switzerland..........................65.9 United Arab Emirates ........176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Singapore ..............................6.4 Sweden .................................5.7 Switzerland............................6.3 United Arab Emirates ............6.0 Finland .................................93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
113
2: Country/Economy Profiles
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France Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................10 .....■ .................1.0 Cost of registering property ..................................................43 .....■ .................6.3 Cost of closing a business ....................................................20 .....■ .................9.0 Time to start a business ..........................................................9 .....■ .................7.0 Time to register property.......................................................49 .....■ .............113.0 Time to close a business.......................................................22 .....■ .................1.9
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
114
Currency stability Change in real effective exchange rate.................................25 .....■ .................1.5 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................32 .....■ ...............–1.6 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................14 .....■ ...............–1.8
Brazil....................................11.7 Egypt ...................................13.9 Kuwait .................................44.7 Multiple (22) ..........................0.0 China ...................................10.9 Hong Kong SAR ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator..................................................10 .....■ .................8.0 Manageability of private debt ...............................................n/a .........................n/a Aggregate measure of real estate bubbles...........................34 .....■ .................4.2
Multiple (14) ..........................0.0 Multiple (9) ............................9.0 Nigeria ...................................0.3 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ......................................9 .....■ .................5.5 Manageability of public debt .................................................49 .....■ ...............68.1 Credit default swap spreads ...................................................4 .....■ ...............40.0
Multiple (13) ........................20.0 Multiple (13) ........................20.0 Peru .......................................6.5 Chile ......................................5.2 Norway ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................13 .....■ .............117.3 Central bank assets to GDP ..................................................33 .....■ .................0.6 Financial system deposits to GDP ........................................22 .....■ ...............68.5 M2 to GDP ............................................................................21 .....■ ...............80.2 Private credit to GDP.............................................................18 .....■ .............100.6 Bank deposits to GDP ...........................................................22 .....■ ...............68.5 Money market instruments to GDP......................................12 .....■ .................2.8
Denmark............................199.3 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 United States ....................202.4 Hong Kong SAR ................267.9 Ireland..................................45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................31 .....■ .................3.9 Bank overhead costs.............................................................34 .....■ .................3.0 Public ownership of banks ......................................................1 .....■ .................0.0 Bank operating costs to assets...............................................8 .....■ .................1.2 Non-performing bank loans to total loans .............................28 .....■ .................2.7
Saudi Arabia ..........................6.4 Singapore ..............................1.0 Belgium .................................0.0 Japan .....................................0.8 Denmark................................0.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................46 .....■ .................0.0 Public credit registry coverage ................................................6 .....■ ...............28.3
Australia.............................100.0 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................14 .....■ .................1.9 IPO proceeds amount ...........................................................45 .....■ .................0.2 Share of world IPOs ................................................................8 .....■ .................4.4
China ...................................19.3 Hong Kong SAR ....................2.8 China ...................................12.9
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France Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share..................................................................4 .....■ .................4.3 M&A transaction value to GDP .............................................15 .....■ .................5.3 Share of total number of M&A deals ......................................7 .....■ .................3.9
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ....................................................4 .....■ ......272,732.0 Insurance density ....................................................................6 .....■ ..........4,169.7 Real growth of direct insurance premiums...........................47 .....■ .................0.0 Insurance penetration..............................................................7 .....■ .................0.1 Relative value-added of insurance to GDP............................30 .....■ .................0.9
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................18 .....■ .................2.8 Share of total number of securitization deals .........................5 .....■ .................2.0
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover..............................................9 .....■ .................2.0 Outright forward foreign exchange turnover ........................10 .....■ .................1.8 Foreign exchange swap turnover............................................8 .....■ .................4.0
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements .............................................................................4 .....■ .................5.6 Interest rate derivatives turnover: Swaps ...............................3 .....■ .................9.0 Interest rate derivatives turnover: Options .............................4 .....■ .................6.0 Foreign exchange derivatives turnover: Currency swaps .......5 .....■ .................3.6 Foreign exchange derivatives turnover: Options ....................7 .....■ .................2.2
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................17 .....■ .............130.6 Stock market capitalization to GDP.......................................24 .....■ .............102.2 Stock market value traded to GDP........................................16 .....■ .............133.4 Number of listed companies per 10,000 people...................20 .....■ .................0.1
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ...............2 .....■ ...............82.6 Private international bonds to GDP .........................................9 .....■ .............102.1 Public international bonds to GDP ........................................26 .....■ .................2.8
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
115 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication ...............................................9 .....■ .................6.2 Venture capital availability .....................................................23 .....■ .................3.5 Ease of access to credit........................................................38 .....■ .................3.0 Financing through local equity market ....................................5 .....■ .................4.8 Ease of access to loans ........................................................27 .....■ .................3.5 Foreign direct investment to GDP ........................................22 .....■ .................6.1
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................10 .....■ ......180,080.0 Commercial bank branches...................................................14 .....■ ...............23.0 Total number of ATMs.............................................................8 .....■ .............102.6 Total number of point of sale (POS) devices.........................26 .....■ .............249.6 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Germany Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................82.1
17.7%
US$ bn
18.1%
GDP (US$ billions), 2008 ......................................................3,667.5
■ ■ ■ ■
GDP (current prices) per capita, 2008 ............................44,660.4 GDP (PPP) as share (%) of world total, 2008 ........................4.23 Average rate of real GDP growth (%), 2004–08....................1.74 32.8%
31.4%
Public debt securities ....2,155.5 Private debt securities...3,910.5 Banking deposits ............3,740.5 Equity securities .............2,105.5 Total
11,911.9
Total/GDP: 358.7%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................12 4.5 1
2
3
4
5
6
7
Factors, policies, and institutions
116
1st pillar: Institutional environment ...........................................9
5.7
Financial sector liberalization ......................................................1 Corporate governance.................................................................17 Legal and regulatory issues .......................................................11 Contract enforcement..................................................................10
7.0 5.0 5.1 5.5
2nd pillar: Business environment .............................................13
5.6
Human capital ...............................................................................16 Taxes...............................................................................................12 Infrastructure ..................................................................................6 Cost of doing business ................................................................17
4.8 5.6 6.2 5.7
3rd pillar: Financial stability......................................................10
5.3
Currency stability..........................................................................32 Banking system stability................................................................7 Risk of sovereign debt crisis ......................................................13
4.2 5.8 5.9 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................19
4.2
Size index .......................................................................................15 Efficiency index.............................................................................36 Financial information disclosure................................................11
4.0 4.6 4.0
5th pillar: Non-banking financial services .............................10
3.5
IPO activity.....................................................................................17 M&A activity....................................................................................8 Insurance .......................................................................................16 Securitization.................................................................................13
2.8 4.5 3.1 3.7
6th pillar: Financial markets........................................................7
4.4
Foreign exchange markets ...........................................................8 Derivatives markets .......................................................................8 Equity market development ........................................................24 Bond market development............................................................4
4.1 6.1 3.1 4.9 1
Financial access 7th pillar: Financial access........................................................41
3.0
Commercial access......................................................................43 Retail access.................................................................................35
3.4 2.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Germany Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................1.7 Commitments to WTO agreement on trade in services.........1 .....■ ...............73.5 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ................................6 .....■ .................5.0 Efficacy of corporate boards .................................................12 .....■ .................5.3 Reliance on professional management .................................13 .....■ .................5.7 Willingness to delegate...........................................................8 .....■ .................5.2 Strength of auditing and reporting standards........................12 .....■ .................5.8 Ethical behavior of firms........................................................11 .....■ .................5.9 Protection of minority shareholders’ interests........................8 .....■ .................5.4 Official supervisory power ....................................................28 .....■ .................9.0 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................29 .....■ .................3.0 Centralization of economic policymaking ................................5 .....■ .................4.7 Regulation of securities exchanges ......................................14 .....■ .................5.3 Property rights.........................................................................8 .....■ .................6.3 Intellectual property protection .............................................10 .....■ .................5.7 Diversion of public funds.......................................................10 .....■ .................5.7 Public trust of politicians .......................................................14 .....■ .................4.1 Corruption perceptions index ................................................11 .....■ .................7.9 Strength of legal rights index ................................................18 .....■ .................7.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................15 .....■ .................4.6 Judicial independence .............................................................5 .....■ .................6.4 Irregular payments in judicial decisions ................................16 .....■ .................5.6 Time to enforce a contract ....................................................15 .....■ .............394.0 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Strength of investor protection .............................................38 .....■ .................5.0 Cost of enforcing contracts...................................................11 .....■ ...............14.4
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................21 .....■ .................5.0 Quality of math and science education.................................26 .....■ .................4.5 Extent of staff training...........................................................10 .....■ .................5.2 Local availability of specialized research and training services ...............................................................2 .....■ .................6.0 Brain drain and ease of hiring foreign labor ..........................26 .....■ .................4.2 Tertiary enrollment ................................................................30 .....■ ...............46.3
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................18 .....■ .................5.6 Distortive effect on competition of taxes and subsidies ......47 .....■ .................3.8 Marginal tax variation ..............................................................1 .....■ ...............–6.9 Time to pay taxes ..................................................................23 .....■ .............196.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................6 .....■ .................6.5 Quality of telephone infrastructure .......................................16 .....■ .................6.6 Internet users ........................................................................10 .....■ ...............72.0 Broadband Internet subscribers ............................................14 .....■ ...............23.7 Telephone lines .......................................................................2 .....■ ...............65.1 Mobile telephone subscribers...............................................12 .....■ .............117.6
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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117
2: Country/Economy Profiles
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Germany Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................24 .....■ .................5.6 Cost of registering property ..................................................40 .....■ .................5.2 Cost of closing a business ....................................................17 .....■ .................8.0 Time to start a business ........................................................28 .....■ ...............18.0 Time to register property.......................................................32 .....■ ...............40.0 Time to close a business.......................................................15 .....■ .................1.2
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
118
Currency stability Change in real effective exchange rate.................................43 .....■ ...............–0.4 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................13 .....■ .................6.4 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................15 .....■ ...............–2.3
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator..................................................17 .....■ .................7.0 Manageability of private debt ...............................................n/a .........................n/a Aggregate measure of real estate bubbles...........................22 .....■ .................5.1
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ....................................16 .....■ .................5.3 Manageability of public debt .................................................47 .....■ ...............66.0 Credit default swap spreads ...................................................3 .....■ ...............37.8
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................10 .....■ .............126.7 Central bank assets to GDP ..................................................40 .....■ .................0.2 Financial system deposits to GDP ........................................11 .....■ .............100.8 M2 to GDP ............................................................................11 .....■ .............118.8 Private credit to GDP.............................................................14 .....■ .............104.9 Bank deposits to GDP ...........................................................12 .....■ .............100.8 Money market instruments to GDP......................................10 .....■ .................3.4
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................48 .....■ .................3.2 Bank overhead costs.............................................................48 .....■ .................5.5 Public ownership of banks ....................................................41 .....■ ...............27.6 Bank operating costs to assets...............................................4 .....■ .................1.0 Non-performing bank loans to total loans .............................28 .....■ .................2.7
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................9 .....■ ...............98.4 Public credit registry coverage ..............................................22 .....■ .................0.7
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................7 .....■ .................3.2 IPO proceeds amount ...........................................................37 .....■ .................0.2 Share of world IPOs ..............................................................12 .....■ .................2.6
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Germany Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share..................................................................5 .....■ .................3.5 M&A transaction value to GDP .............................................30 .....■ .................3.4 Share of total number of M&A deals ......................................6 .....■ .................4.3
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ....................................................5 .....■ ......223,429.0 Insurance density ..................................................................17 .....■ ..........2,666.6 Real growth of direct insurance premiums...........................46 .....■ .................0.0 Insurance penetration............................................................18 .....■ .................0.1 Relative value-added of insurance to GDP............................36 .....■ .................0.7
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................20 .....■ .................2.7 Share of total number of securitization deals .........................7 .....■ .................1.7
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................10 .....■ .................1.9 Outright forward foreign exchange turnover ..........................5 .....■ .................5.3 Foreign exchange swap turnover..........................................10 .....■ .................2.3
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements .............................................................................3 .....■ .................7.3 Interest rate derivatives turnover: Swaps ...............................4 .....■ .................4.1 Interest rate derivatives turnover: Options .............................8 .....■ .................0.7 Foreign exchange derivatives turnover: Currency swaps .....19 .....■ .................0.5 Foreign exchange derivatives turnover: Options ..................11 .....■ .................1.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio.....................................................8 .....■ .............178.7 Stock market capitalization to GDP.......................................36 .....■ ...............57.1 Stock market value traded to GDP........................................22 .....■ .............102.0 Number of listed companies per 10,000 people...................23 .....■ .................0.1
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ...............4 .....■ ...............60.4 Private international bonds to GDP .........................................8 .....■ .............118.1 Public international bonds to GDP ........................................10 .....■ ...............12.7
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
119 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................16 .....■ .................6.0 Venture capital availability .....................................................37 .....■ .................3.0 Ease of access to credit........................................................52 .....■ .................2.6 Financing through local equity market ..................................38 .....■ .................4.0 Ease of access to loans ........................................................39 .....■ .................3.0 Foreign direct investment to GDP ........................................49 .....■ .................1.5
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches...................................................24 .....■ ...............16.3 Total number of ATMs...........................................................12 .....■ ...............79.7 Total number of point of sale (POS) devices.........................31 .....■ ...............65.8 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Hong Kong SAR Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................7.0
1.4% 5.2%
US$ bn
GDP (US$ billions), 2008 .........................................................215.6 GDP (current prices) per capita, 2008 ............................30,755.1 GDP (PPP) as share (%) of world total, 2008 ........................0.45
32.1%
61.3%
Average rate of real GDP growth (%), 2004–08....................6.28
■ ■ ■ ■
Public debt securities .........25.9 Private debt securities........99.3 Banking deposits ...............609.0 Equity securities .............1,162.6 Total
1,896.7
Total/GDP: 916.2%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index........................................................5 5.0 1
2
3
4
5
6
7
Factors, policies, and institutions
120
1st pillar: Institutional environment .........................................10
5.6
Financial sector liberalization ....................................................23 Corporate governance.................................................................12 Legal and regulatory issues .........................................................6 Contract enforcement....................................................................2
5.9 5.1 5.5 6.1
2nd pillar: Business environment ...............................................9
5.8
Human capital ...............................................................................20 Taxes.................................................................................................1 Infrastructure ..................................................................................4 Cost of doing business ................................................................16
4.7 6.4 6.4 5.8
3rd pillar: Financial stability........................................................3
5.6
Currency stability..........................................................................11 Banking system stability..............................................................21 Risk of sovereign debt crisis ........................................................3
5.3 5.3 6.3 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services........................................1
5.4
Size index .........................................................................................2 Efficiency index...............................................................................4 Financial information disclosure................................................24
5.6 6.3 3.1
5th pillar: Non-banking financial services ...............................9
3.7
IPO activity.......................................................................................6 M&A activity..................................................................................10 Insurance .........................................................................................3 Securitization.................................................................................48
4.4 4.0 5.3 1.2
6th pillar: Financial markets........................................................9
4.4
Foreign exchange markets ...........................................................6 Derivatives markets .....................................................................12 Equity market development ..........................................................1 Bond market development..........................................................34
4.8 5.1 6.1 1.9 1
Financial access 7th pillar: Financial access........................................................13
4.2
Commercial access........................................................................1 Retail access.................................................................................15
5.2 3.2 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Hong Kong SAR Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.......33 .....■ ...............35.3 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ................................5 .....■ .................5.1 Efficacy of corporate boards .................................................29 .....■ .................4.7 Reliance on professional management .................................27 .....■ .................5.0 Willingness to delegate.........................................................30 .....■ .................4.2 Strength of auditing and reporting standards..........................7 .....■ .................6.0 Ethical behavior of firms........................................................13 .....■ .................5.8 Protection of minority shareholders’ interests......................22 .....■ .................5.0 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation ...........................................2 .....■ .................5.2 Centralization of economic policymaking ..............................23 .....■ .................3.5 Regulation of securities exchanges ......................................12 .....■ .................5.4 Property rights.........................................................................7 .....■ .................6.3 Intellectual property protection .............................................19 .....■ .................5.3 Diversion of public funds.........................................................9 .....■ .................5.8 Public trust of politicians .......................................................11 .....■ .................4.8 Corruption perceptions index ..................................................9 .....■ .................8.1 Strength of legal rights index ..................................................1 .....■ ...............10.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................25 .....■ .................4.1 Judicial independence ...........................................................12 .....■ .................6.0 Irregular payments in judicial decisions ................................11 .....■ .................6.0 Time to enforce a contract ......................................................2 .....■ .............211.0 Number of procedures to enforce a contract .........................3 .....■ ...............24.0 Strength of investor protection ...............................................2 .....■ .................9.0 Cost of enforcing contracts...................................................12 .....■ ...............14.5
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................22 .....■ .................4.9 Quality of math and science education...................................7 .....■ .................5.4 Extent of staff training...........................................................19 .....■ .................4.8 Local availability of specialized research and training services .............................................................18 .....■ .................5.1 Brain drain and ease of hiring foreign labor ............................6 .....■ .................5.2 Tertiary enrollment ................................................................38 .....■ ...............33.0
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................11 .....■ .................6.0 Distortive effect on competition of taxes and subsidies ........1 .....■ .................6.1 Marginal tax variation ..............................................................5 .....■ ...............–2.1 Time to pay taxes ....................................................................6 .....■ ...............80.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................3 .....■ .................6.7 Quality of telephone infrastructure .........................................5 .....■ .................6.9 Internet users ........................................................................20 .....■ ...............55.0 Broadband Internet subscribers ..............................................9 .....■ ...............26.4 Telephone lines .......................................................................4 .....■ ...............57.2 Mobile telephone subscribers.................................................3 .....■ .............149.2
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
121
2: Country/Economy Profiles
Part 1.r3
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Hong Kong SAR Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................13 .....■ .................2.0 Cost of registering property ..................................................37 .....■ .................5.0 Cost of closing a business ....................................................20 .....■ .................9.0 Time to start a business ........................................................15 .....■ ...............11.0 Time to register property.......................................................42 .....■ ...............54.0 Time to close a business.......................................................11 .....■ .................1.1
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
122
Currency stability Change in real effective exchange rate.................................50 .....■ ...............–4.5 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP.............................................7 .....■ ...............14.2 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................1 .....■ .............251.9
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator....................................................1 .....■ .................9.0 Manageability of private debt................................................33 .....■ ...............72.7 Aggregate measure of real estate bubbles...........................40 .....■ .................2.8
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................16 .....■ ...............19.0 Foreign currency sovereign rating.........................................16 .....■ ...............19.0 Aggregate macroprudential indicator ....................................19 .....■ .................5.2 Manageability of public debt ...................................................7 .....■ ...............13.9 Credit default swap spreads .................................................12 .....■ ...............75.3
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .......................................8 .....■ .............147.7 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ..........................................1 .....■ .............267.9 M2 to GDP ..............................................................................1 .....■ .............312.7 Private credit to GDP.............................................................10 .....■ .............132.4 Bank deposits to GDP .............................................................1 .....■ .............267.9 Money market instruments to GDP......................................14 .....■ .................1.5
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................20 .....■ .................4.4 Bank overhead costs...............................................................5 .....■ .................1.3 Public ownership of banks ......................................................1 .....■ .................0.0 Bank operating costs to assets.............................................13 .....■ .................1.4 Non-performing bank loans to total loans ...............................7 .....■ .................1.0
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................16 .....■ ...............69.9 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................10 .....■ .................2.6 IPO proceeds amount .............................................................1 .....■ .................2.8 Share of world IPOs ..............................................................10 .....■ .................2.9
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Hong Kong SAR Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................17 .....■ .................1.1 M&A transaction value to GDP ...............................................1 .....■ ...............16.8 Share of total number of M&A deals ....................................18 .....■ .................1.5
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................22 .....■ ........24,657.0 Insurance density ..................................................................12 .....■ ..........3,421.8 Real growth of direct insurance premiums.............................2 .....■ .................0.2 Insurance penetration..............................................................4 .....■ .................0.1 Relative value-added of insurance to GDP..............................1 .....■ .................3.9
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ...........................................................n/a .........................n/a Share of total number of securitization deals .......................37 .....■ .................0.1
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover..............................................7 .....■ .................3.0 Outright forward foreign exchange turnover ..........................7 .....■ .................3.5 Foreign exchange swap turnover............................................3 .....■ .................5.5
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................18 .....■ .................0.2 Interest rate derivatives turnover: Swaps .............................11 .....■ .................1.0 Interest rate derivatives turnover: Options ...........................17 .....■ .................0.2 Foreign exchange derivatives turnover: Currency swaps .....10 .....■ .................1.6 Foreign exchange derivatives turnover: Options ....................6 .....■ .................2.3
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................23 .....■ ...............88.6 Stock market capitalization to GDP.........................................1 .....■ .............500.5 Stock market value traded to GDP..........................................1 .....■ .............443.6 Number of listed companies per 10,000 people.....................1 .....■ .................1.5
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............15 .....■ ...............22.9 Public domestic bond market capitalization to GDP .............35 .....■ ...............12.0 Private international bonds to GDP .......................................15 .....■ ...............50.4 Public international bonds to GDP ........................................33 .....■ .................1.3
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
123 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication ...............................................4 .....■ .................6.4 Venture capital availability .......................................................1 .....■ .................4.6 Ease of access to credit........................................................31 .....■ .................3.5 Financing through local equity market ....................................1 .....■ .................5.3 Ease of access to loans ..........................................................6 .....■ .................4.4 Foreign direct investment to GDP ..........................................1 .....■ ...............28.9
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches...................................................12 .....■ ...............24.4 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices.........................17 .....■ .............880.3 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Hungary Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................10.1
US$ bn
20.3%
GDP (US$ billions), 2008 .........................................................156.3 39.7%
GDP (current prices) per capita, 2008 ............................15,542.3 GDP (PPP) as share (%) of world total, 2008 ........................0.29 Average rate of real GDP growth (%), 2004–08....................2.91
■ ■ ■ ■
30.8%
Public debt securities .........93.2 Private debt securities........21.7 Banking deposits .................72.3 Equity securities ..................47.7 Total
234.8
9.2%
Total/GDP: 169.6%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................41 3.1 1
2
3
4
5
6
7
Factors, policies, and institutions
124
1st pillar: Institutional environment .........................................28
4.4
Financial sector liberalization ....................................................26 Corporate governance.................................................................34 Legal and regulatory issues .......................................................36 Contract enforcement..................................................................26
5.0 4.5 3.5 4.6
2nd pillar: Business environment .............................................26
4.7
Human capital ...............................................................................24 Taxes...............................................................................................34 Infrastructure ................................................................................24 Cost of doing business ................................................................30
4.5 4.4 4.7 5.1
3rd pillar: Financial stability......................................................52
3.7
Currency stability..........................................................................53 Banking system stability..............................................................14 Risk of sovereign debt crisis ......................................................46
1.9 5.7 2.9 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................53
2.4
Size index .......................................................................................39 Efficiency index.............................................................................50 Financial information disclosure................................................45
2.0 3.3 1.3
5th pillar: Non-banking financial services .............................49
1.5
IPO activity.....................................................................................50 M&A activity..................................................................................36 Insurance .......................................................................................39 Securitization.................................................................................43
1.1 1.6 1.9 1.4
6th pillar: Financial markets......................................................35
2.0
Foreign exchange markets .........................................................33 Derivatives markets .....................................................................30 Equity market development ........................................................38 Bond market development..........................................................22
1.1 1.3 2.0 2.9 1
Financial access 7th pillar: Financial access........................................................42
3.0
Commercial access......................................................................50 Retail access.................................................................................22
3.1 2.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:22 PM
Page 125
Hungary Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................30 .....■ .................1.7 Commitments to WTO agreement on trade in services.......16 .....■ ...............81.3 Domestic financial sector liberalization .................................41 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................34 .....■ .................4.4 Efficacy of corporate boards .................................................43 .....■ .................4.5 Reliance on professional management .................................46 .....■ .................4.1 Willingness to delegate.........................................................54 .....■ .................3.0 Strength of auditing and reporting standards........................23 .....■ .................5.3 Ethical behavior of firms........................................................46 .....■ .................3.6 Protection of minority shareholders’ interests......................42 .....■ .................4.3 Official supervisory power ......................................................1 .....■ ...............14.0 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................53 .....■ .................2.1 Centralization of economic policymaking ..............................37 .....■ .................2.9 Regulation of securities exchanges ......................................31 .....■ .................4.6 Property rights.......................................................................33 .....■ .................4.6 Intellectual property protection .............................................32 .....■ .................3.9 Diversion of public funds.......................................................44 .....■ .................3.0 Public trust of politicians .......................................................47 .....■ .................1.9 Corruption perceptions index ................................................26 .....■ .................5.1 Strength of legal rights index ................................................18 .....■ .................7.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................48 .....■ .................2.5 Judicial independence ...........................................................31 .....■ .................4.1 Irregular payments in judicial decisions ................................33 .....■ .................4.3 Time to enforce a contract ....................................................12 .....■ .............335.0 Number of procedures to enforce a contract .......................23 .....■ ...............33.0 Strength of investor protection .............................................47 .....■ .................4.3 Cost of enforcing contracts.....................................................7 .....■ ...............13.0
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................41 .....■ .................4.1 Quality of math and science education.................................17 .....■ .................4.9 Extent of staff training...........................................................47 .....■ .................3.6 Local availability of specialized research and training services .............................................................35 .....■ .................4.3 Brain drain and ease of hiring foreign labor ..........................36 .....■ .................3.9 Tertiary enrollment ................................................................10 .....■ ...............68.6
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................32 .....■ .................4.3 Distortive effect on competition of taxes and subsidies ......52 .....■ .................3.3 Marginal tax variation ............................................................25 .....■ .................6.9 Time to pay taxes ..................................................................38 .....■ .............330.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................32 .....■ .................4.3 Quality of telephone infrastructure .......................................24 .....■ .................6.4 Internet users ........................................................................23 .....■ ...............52.0 Broadband Internet subscribers ............................................23 .....■ ...............14.2 Telephone lines .....................................................................24 .....■ ...............32.4 Mobile telephone subscribers...............................................22 .....■ .............110.0
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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Hungary Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................30 .....■ .................8.4 Cost of registering property ..................................................53 .....■ ...............11.0 Cost of closing a business ....................................................30 .....■ ...............15.0 Time to start a business ..........................................................4 .....■ .................5.0 Time to register property.......................................................15 .....■ ...............17.0 Time to close a business.......................................................23 .....■ .................2.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
126
Currency stability Change in real effective exchange rate.................................27 .....■ .................1.2 External vulnerability indicator...............................................32 .....■ .............286.0 Current account balance to GDP...........................................50 .....■ ...............–7.8 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................31 .....■ .............104.4 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................23 .....■ .................1.3 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt................................................22 .....■ ...............18.9 Aggregate measure of real estate bubbles...........................13 .....■ .................5.9
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................42 .....■ ...............11.0 Foreign currency sovereign rating.........................................38 .....■ ...............11.0 Aggregate macroprudential indicator ....................................45 .....■ .................4.4 Manageability of public debt .................................................48 .....■ ...............67.7 Credit default swap spreads .................................................42 .....■ .............375.0
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................29 .....■ ...............70.6 Central bank assets to GDP ..................................................30 .....■ .................0.8 Financial system deposits to GDP ........................................39 .....■ ...............44.7 M2 to GDP ............................................................................38 .....■ ...............57.0 Private credit to GDP.............................................................32 .....■ ...............57.2 Bank deposits to GDP ...........................................................40 .....■ ...............44.7 Money market instruments to GDP......................................27 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................50 .....■ .................2.8 Bank overhead costs.............................................................54 .....■ ...............10.9 Public ownership of banks ....................................................18 .....■ .................4.2 Bank operating costs to assets.............................................50 .....■ .................6.6 Non-performing bank loans to total loans .............................30 .....■ .................2.9
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................37 .....■ ...............10.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................50 .....■ .................0.0 IPO proceeds amount ...........................................................50 .....■ .................0.0 Share of world IPOs ..............................................................50 .....■ .................0.0
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Hungary Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................38 .....■ .................0.1 M&A transaction value to GDP .............................................28 .....■ .................3.5 Share of total number of M&A deals ....................................38 .....■ .................0.2
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................38 .....■ ..........4,924.0 Insurance density ..................................................................26 .....■ .............489.8 Real growth of direct insurance premiums...........................28 .....■ .................0.1 Insurance penetration............................................................29 .....■ .................0.0 Relative value-added of insurance to GDP............................32 .....■ .................0.8
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................39 .....■ .................1.1 Share of total number of securitization deals .......................46 .....■ .................0.1
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................30 .....■ .................0.2 Outright forward foreign exchange turnover ........................38 .....■ .................0.0 Foreign exchange swap turnover..........................................28 .....■ .................0.2
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................19 .....■ .................0.2 Interest rate derivatives turnover: Swaps .............................27 .....■ .................0.0 Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps .....37 .....■ .................0.0 Foreign exchange derivatives turnover: Options ..................25 .....■ .................0.1
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................20 .....■ .............105.3 Stock market capitalization to GDP.......................................49 .....■ ...............32.6 Stock market value traded to GDP........................................36 .....■ ...............34.4 Number of listed companies per 10,000 people...................34 .....■ .................0.0
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............22 .....■ .................7.9 Public domestic bond market capitalization to GDP .............10 .....■ ...............50.3 Private international bonds to GDP .......................................25 .....■ ...............10.9 Public international bonds to GDP ..........................................7 .....■ ...............17.9
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
127 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................40 .....■ .................4.3 Venture capital availability .....................................................48 .....■ .................2.4 Ease of access to credit........................................................40 .....■ .................2.9 Financing through local equity market ..................................52 .....■ .................3.0 Ease of access to loans ........................................................43 .....■ .................2.8 Foreign direct investment to GDP ........................................31 .....■ .................4.0
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................15 .....■ ......157,082.2 Commercial bank branches...................................................23 .....■ ...............17.1 Total number of ATMs...........................................................21 .....■ ...............54.2 Total number of point of sale (POS) devices.........................21 .....■ .............485.8 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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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 GDP (current prices) per capita, 2008 ..............................1,016.2
2.4%
GDP (PPP) as share (%) of world total, 2008 ........................4.77
54.2%
Average rate of real GDP growth (%), 2004–08....................8.70
■ ■ ■ ■
22.7%
Public debt securities .......696.7 Private debt securities........79.5 Banking deposits ...............761.5 Equity securities .............1,819.1 Total
3,356.9
Total/GDP: 304.5%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................38 3.3 1
2
3
4
5
6
7
Factors, policies, and institutions
128
1st pillar: Institutional environment .........................................48
3.4
Financial sector liberalization ....................................................51 Corporate governance.................................................................30 Legal and regulatory issues .......................................................31 Contract enforcement..................................................................50
1.9 4.6 3.8 3.2
2nd pillar: Business environment .............................................48
3.5
Human capital ...............................................................................33 Taxes...............................................................................................38 Infrastructure ................................................................................51 Cost of doing business ................................................................50
4.1 4.2 2.3 3.4
3rd pillar: Financial stability......................................................46
4.2
Currency stability..........................................................................10 Banking system stability..............................................................49 Risk of sovereign debt crisis ......................................................43
5.4 4.0 3.4 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................39
3.1
Size index .......................................................................................36 Efficiency index.............................................................................32 Financial information disclosure................................................44
2.3 4.8 1.3
5th pillar: Non-banking financial services .............................17
3.1
IPO activity.......................................................................................9 M&A activity..................................................................................20 Insurance .......................................................................................17 Securitization.................................................................................16
3.8 2.6 3.0 3.0
6th pillar: Financial markets......................................................22
3.0
Foreign exchange markets .........................................................13 Derivatives markets .....................................................................13 Equity market development ........................................................28 Bond market development..........................................................27
2.0 4.9 2.7 2.6 1
Financial access 7th pillar: Financial access........................................................48
2.8
Commercial access......................................................................27 Retail access.................................................................................47
3.9 1.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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India Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–1.1 Commitments to WTO agreement on trade in services.......47 .....■ .................6.2 Domestic financial sector liberalization .................................42 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................28 .....■ .................4.5 Efficacy of corporate boards .................................................35 .....■ .................4.6 Reliance on professional management .................................22 .....■ .................5.3 Willingness to delegate.........................................................28 .....■ .................4.3 Strength of auditing and reporting standards........................18 .....■ .................5.5 Ethical behavior of firms........................................................33 .....■ .................4.1 Protection of minority shareholders’ interests......................24 .....■ .................4.9 Official supervisory power ....................................................24 .....■ ...............10.0 Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................35 .....■ .................2.9 Centralization of economic policymaking ..............................21 .....■ .................3.7 Regulation of securities exchanges ........................................9 .....■ .................5.6 Property rights.......................................................................31 .....■ .................4.8 Intellectual property protection .............................................36 .....■ .................3.6 Diversion of public funds.......................................................31 .....■ .................3.6 Public trust of politicians .......................................................36 .....■ .................2.4 Corruption perceptions index ................................................42 .....■ .................3.4 Strength of legal rights index ................................................11 .....■ .................8.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................14 .....■ .................4.6 Judicial independence ...........................................................23 .....■ .................5.0 Irregular payments in judicial decisions ................................45 .....■ .................3.4 Time to enforce a contract ....................................................54 .....■ ..........1,420.0 Number of procedures to enforce a contract .......................51 .....■ ...............46.0 Strength of investor protection .............................................21 .....■ .................6.0 Cost of enforcing contracts...................................................49 .....■ ...............39.6
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................12 .....■ .................5.4 Quality of math and science education.................................13 .....■ .................5.0 Extent of staff training...........................................................25 .....■ .................4.5 Local availability of specialized research and training services .............................................................26 .....■ .................4.7 Brain drain and ease of hiring foreign labor ..........................31 .....■ .................4.1 Tertiary enrollment ................................................................51 .....■ ...............11.8
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................45 .....■ .................3.4 Distortive effect on competition of taxes and subsidies ......38 .....■ .................4.0 Marginal tax variation ............................................................36 .....■ ...............11.1 Time to pay taxes ..................................................................33 .....■ .............271.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................46 .....■ .................3.2 Quality of telephone infrastructure .......................................26 .....■ .................6.3 Internet users ........................................................................51 .....■ .................6.9 Broadband Internet subscribers ............................................51 .....■ .................0.3 Telephone lines .....................................................................52 .....■ .................3.4 Mobile telephone subscribers...............................................55 .....■ ...............20.0
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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India Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................53 .....■ ...............70.1 Cost of registering property ..................................................45 .....■ .................7.5 Cost of closing a business ....................................................20 .....■ .................9.0 Time to start a business ........................................................39 .....■ ...............30.0 Time to register property.......................................................37 .....■ ...............45.0 Time to close a business.......................................................55 .....■ ...............10.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
130
Currency stability Change in real effective exchange rate.................................24 .....■ .................1.6 External vulnerability indicator.................................................6 .....■ ...............29.5 Current account balance to GDP...........................................37 .....■ ...............–2.8 Dollarization vulnerability indicator ........................................26 .....■ .................4.7 External debt to GDP (developing economies) .......................2 .....■ ...............17.7 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................23 .....■ .................1.3 Financial strengths indicator..................................................37 .....■ .................4.0 Manageability of private debt................................................19 .....■ .................7.8 Aggregate measure of real estate bubbles...........................43 .....■ .................1.4
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................43 .....■ ...............10.8 Foreign currency sovereign rating.........................................40 .....■ ...............10.8 Aggregate macroprudential indicator ....................................37 .....■ .................4.7 Manageability of public debt .................................................41 .....■ ...............56.4 Credit default swap spreads.................................................n/a .........................n/a
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................34 .....■ ...............61.1 Central bank assets to GDP ..................................................18 .....■ .................2.1 Financial system deposits to GDP ........................................29 .....■ ...............57.6 M2 to GDP ............................................................................22 .....■ ...............78.3 Private credit to GDP.............................................................36 .....■ ...............43.4 Bank deposits to GDP ...........................................................30 .....■ ...............57.6 Money market instruments to GDP......................................27 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................27 .....■ .................4.1 Bank overhead costs.............................................................14 .....■ .................1.8 Public ownership of banks ....................................................46 .....■ ...............40.7 Bank operating costs to assets.............................................33 .....■ .................3.2 Non-performing bank loans to total loans .............................19 .....■ .................2.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................36 .....■ ...............10.5 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................9 .....■ .................2.7 IPO proceeds amount ...........................................................13 .....■ .................0.6 Share of world IPOs ................................................................6 .....■ .................5.7
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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India Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................18 .....■ .................0.9 M&A transaction value to GDP .............................................35 .....■ .................2.8 Share of total number of M&A deals ....................................10 .....■ .................2.4
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................14 .....■ ........58,725.0 Insurance density ..................................................................45 .....■ ...............50.3 Real growth of direct insurance premiums.............................6 .....■ .................0.2 Insurance penetration............................................................23 .....■ .................0.1 Relative value-added of insurance to GDP............................27 .....■ .................1.0
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................38 .....■ .................1.2 Share of total number of securitization deals .........................8 .....■ .................1.6
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................14 .....■ .................1.1 Outright forward foreign exchange turnover ........................12 .....■ .................1.5 Foreign exchange swap turnover..........................................18 .....■ .................0.6
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps .............................19 .....■ .................0.2 Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps .....12 .....■ .................1.3 Foreign exchange derivatives turnover: Options ....................9 .....■ .................1.5
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................27 .....■ ...............83.9 Stock market capitalization to GDP.......................................20 .....■ .............112.7 Stock market value traded to GDP........................................23 .....■ ...............94.6 Number of listed companies per 10,000 people...................32 .....■ .................0.0
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............26 .....■ .................4.0 Public domestic bond market capitalization to GDP ...............6 .....■ ...............54.9 Private international bonds to GDP .......................................33 .....■ .................3.8 Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
131 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................27 .....■ .................5.3 Venture capital availability .....................................................17 .....■ .................3.6 Ease of access to credit........................................................14 .....■ .................4.0 Financing through local equity market ....................................2 .....■ .................5.0 Ease of access to loans ........................................................23 .....■ .................3.6 Foreign direct investment to GDP ........................................43 .....■ .................2.1
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................28 .....■ ........68,047.1 Commercial bank branches...................................................38 .....■ .................9.3 Total number of ATMs...........................................................41 .....■ .................3.6 Total number of point of sale (POS) devices.........................30 .....■ ...............77.8 MFI borrowers’ penetration rate ...........................................12 .....■ .................4.8
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Indonesia Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .....................................................227.8
US$ bn
27.3%
GDP (US$ billions), 2008 .........................................................511.8 GDP (current prices) per capita, 2008 ..............................2,246.3
39.4%
GDP (PPP) as share (%) of world total, 2008 ........................1.31 4.1%
Average rate of real GDP growth (%), 2004–08....................5.71
■ ■ ■ ■
Public debt securities .......146.5 Private debt securities........22.2 Banking deposits ...............156.3 Equity securities ................211.7 Total
536.7
29.1%
Total/GDP: 124.2%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................48 2.9 1
2
3
4
5
6
7
Factors, policies, and institutions
132
1st pillar: Institutional environment .........................................45
3.5
Financial sector liberalization ....................................................47 Corporate governance.................................................................33 Legal and regulatory issues .......................................................35 Contract enforcement..................................................................47
2.6 4.5 3.6 3.4
2nd pillar: Business environment .............................................52
3.3
Human capital ...............................................................................38 Taxes...............................................................................................32 Infrastructure ................................................................................53 Cost of doing business ................................................................55
4.0 4.6 2.1 2.3
3rd pillar: Financial stability......................................................43
4.4
Currency stability..........................................................................14 Banking system stability..............................................................31 Risk of sovereign debt crisis ......................................................44
4.9 4.9 3.3 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................44
2.6
Size index .......................................................................................43 Efficiency index.............................................................................48 Financial information disclosure................................................30
1.8 3.6 2.3
5th pillar: Non-banking financial services .............................36
2.0
IPO activity.....................................................................................31 M&A activity..................................................................................44 Insurance .......................................................................................33 Securitization.................................................................................25
1.9 1.3 2.4 2.2
6th pillar: Financial markets......................................................52
1.4
Foreign exchange markets .........................................................38 Derivatives markets .....................................................................32 Equity market development ........................................................41 Bond market development..........................................................42
1.1 1.3 1.7 1.3 1
Financial access 7th pillar: Financial access........................................................36
3.1
Commercial access......................................................................30 Retail access.................................................................................39
3.9 2.4 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Indonesia Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................35 .....■ .................1.2 Commitments to WTO agreement on trade in services.......43 .....■ ...............29.8 Domestic financial sector liberalization .................................50 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................24 .....■ .................4.5 Efficacy of corporate boards .................................................23 .....■ .................5.0 Reliance on professional management .................................35 .....■ .................4.7 Willingness to delegate.........................................................21 .....■ .................4.5 Strength of auditing and reporting standards........................43 .....■ .................4.6 Ethical behavior of firms........................................................48 .....■ .................3.5 Protection of minority shareholders’ interests......................29 .....■ .................4.7 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................12 .....■ .................3.9 Centralization of economic policymaking ................................4 .....■ .................4.7 Regulation of securities exchanges ......................................27 .....■ .................4.8 Property rights.......................................................................42 .....■ .................4.1 Intellectual property protection .............................................39 .....■ .................3.5 Diversion of public funds.......................................................32 .....■ .................3.6 Public trust of politicians .......................................................30 .....■ .................3.2 Corruption perceptions index ................................................48 .....■ .................2.6 Strength of legal rights index ................................................49 .....■ .................3.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................32 .....■ .................3.5 Judicial independence ...........................................................38 .....■ .................3.8 Irregular payments in judicial decisions ................................47 .....■ .................3.1 Time to enforce a contract ....................................................35 .....■ .............570.0 Number of procedures to enforce a contract .......................41 .....■ ...............39.0 Strength of investor protection .............................................25 .....■ .................5.7 Cost of enforcing contracts...................................................55 .....■ .............122.7
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................32 .....■ .................4.3 Quality of math and science education.................................28 .....■ .................4.5 Extent of staff training...........................................................24 .....■ .................4.5 Local availability of specialized research and training services .............................................................34 .....■ .................4.3 Brain drain and ease of hiring foreign labor ..........................18 .....■ .................4.6 Tertiary enrollment ................................................................49 .....■ ...............17.0
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................47 .....■ .................3.1 Distortive effect on competition of taxes and subsidies ......24 .....■ .................4.3 Marginal tax variation ............................................................18 .....■ .................3.4 Time to pay taxes ..................................................................31 .....■ .............266.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................48 .....■ .................3.1 Quality of telephone infrastructure .......................................52 .....■ .................4.8 Internet users ........................................................................54 .....■ .................5.6 Broadband Internet subscribers ............................................52 .....■ .................0.1 Telephone lines .....................................................................50 .....■ .................7.7 Mobile telephone subscribers...............................................51 .....■ ...............35.3
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
133
2: Country/Economy Profiles
Part 1.r3
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Indonesia Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................54 .....■ ...............77.9 Cost of registering property ..................................................52 .....■ ...............10.7 Cost of closing a business ....................................................37 .....■ ...............18.0 Time to start a business ........................................................53 .....■ ...............76.0 Time to register property.......................................................31 .....■ ...............39.0 Time to close a business.......................................................52 .....■ .................5.5
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
134
Currency stability Change in real effective exchange rate...................................6 .....■ .................5.0 External vulnerability indicator...............................................16 .....■ ...............59.1 Current account balance to GDP...........................................28 .....■ .................0.1 Dollarization vulnerability indicator ........................................32 .....■ ...............28.8 External debt to GDP (developing economies) .....................13 .....■ ...............31.5 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................32 .....■ .................1.5 Financial strengths indicator..................................................42 .....■ .................3.0 Manageability of private debt................................................12 .....■ .................5.6 Aggregate measure of real estate bubbles...........................16 .....■ .................5.5
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................44 .....■ ...............10.0 Foreign currency sovereign rating.........................................46 .....■ .................8.0 Aggregate macroprudential indicator ....................................38 .....■ .................4.7 Manageability of public debt .................................................16 .....■ ...............29.3 Credit default swap spreads .................................................40 .....■ .............340.3
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................47 .....■ ...............31.5 Central bank assets to GDP ....................................................5 .....■ .................7.7 Financial system deposits to GDP ........................................44 .....■ ...............34.1 M2 to GDP ............................................................................49 .....■ ...............38.2 Private credit to GDP.............................................................47 .....■ ...............22.7 Bank deposits to GDP ...........................................................45 .....■ ...............34.1 Money market instruments to GDP......................................27 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................39 .....■ .................3.6 Bank overhead costs.............................................................31 .....■ .................2.9 Public ownership of banks ....................................................52 .....■ ...............61.3 Bank operating costs to assets.............................................41 .....■ .................4.9 Non-performing bank loans to total loans .............................37 .....■ .................3.5
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................46 .....■ .................0.0 Public credit registry coverage ................................................8 .....■ ...............26.1
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................25 .....■ .................0.7 IPO proceeds amount ...........................................................27 .....■ .................0.4 Share of world IPOs ..............................................................20 .....■ .................0.9
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Indonesia Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................31 .....■ .................0.2 M&A transaction value to GDP .............................................46 .....■ .................1.6 Share of total number of M&A deals ....................................34 .....■ .................0.3
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................34 .....■ ..........6,938.0 Insurance density ..................................................................47 .....■ ...............30.0 Real growth of direct insurance premiums.............................5 .....■ .................0.2 Insurance penetration............................................................42 .....■ .................0.0 Relative value-added of insurance to GDP............................35 .....■ .................0.7
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................35 .....■ .................1.5 Share of total number of securitization deals .......................19 .....■ .................0.7
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................32 .....■ .................0.1 Outright forward foreign exchange turnover ........................30 .....■ .................0.1 Foreign exchange swap turnover..........................................38 .....■ .................0.0
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................31 .....■ .................0.0 Interest rate derivatives turnover: Swaps .............................33 .....■ .................0.0 Interest rate derivatives turnover: Options ...........................29 .....■ .................0.0 Foreign exchange derivatives turnover: Currency swaps .....22 .....■ .................0.3 Foreign exchange derivatives turnover: Options ..................28 .....■ .................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................32 .....■ ...............64.1 Stock market capitalization to GDP.......................................44 .....■ ...............40.7 Stock market value traded to GDP........................................39 .....■ ...............26.1 Number of listed companies per 10,000 people...................44 .....■ .................0.0
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............27 .....■ .................2.2 Public domestic bond market capitalization to GDP .............33 .....■ ...............16.5 Private international bonds to GDP .......................................35 .....■ .................3.4 Public international bonds to GDP ........................................27 .....■ .................2.5
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
135 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................38 .....■ .................4.5 Venture capital availability .....................................................13 .....■ .................3.8 Ease of access to credit..........................................................8 .....■ .................4.4 Financing through local equity market ....................................9 .....■ .................4.7 Ease of access to loans ........................................................14 .....■ .................4.0 Foreign direct investment to GDP ........................................48 .....■ .................1.6
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................32 .....■ ........48,425.5 Commercial bank branches...................................................42 .....■ .................6.7 Total number of ATMs...........................................................39 .....■ ...............13.4 Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate .............................................4 .....■ ...............19.7
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Ireland Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................4.4
15.3%
GDP (US$ billions), 2008 .........................................................273.3
US$ bn
6.7%
■ ■ ■ ■
GDP (current prices) per capita, 2008 ............................61,809.6 GDP (PPP) as share (%) of world total, 2008 ........................0.27 Average rate of real GDP growth (%), 2004–08....................4.11
28.4%
49.6%
Public debt securities .........62.8 Private debt securities......466.6 Banking deposits ...............267.3 Equity securities ................144.0 Total
940.8
Total/GDP: 360.1%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................16 4.4 1
2
3
4
5
6
7
Factors, policies, and institutions
136
1st pillar: Institutional environment .........................................13
5.6
Financial sector liberalization ......................................................1 Corporate governance.................................................................15 Legal and regulatory issues .......................................................17 Contract enforcement....................................................................6
7.0 5.1 4.6 5.7
2nd pillar: Business environment .............................................14
5.5
Human capital ...............................................................................13 Taxes.................................................................................................3 Infrastructure ................................................................................19 Cost of doing business ................................................................21
5.1 6.2 5.2 5.5
3rd pillar: Financial stability......................................................41
4.5
Currency stability..........................................................................34 Banking system stability..............................................................46 Risk of sovereign debt crisis ......................................................23
4.1 4.3 5.2 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services........................................6
5.0
Size index .........................................................................................7 Efficiency index.............................................................................21 Financial information disclosure..................................................3
5.1 5.4 4.0
5th pillar: Non-banking financial services .............................14
3.2
IPO activity.....................................................................................23 M&A activity..................................................................................29 Insurance .........................................................................................2 Securitization.................................................................................14
2.2 1.7 5.5 3.5
6th pillar: Financial markets......................................................24
2.9
Foreign exchange markets .........................................................24 Derivatives markets .....................................................................19 Equity market development ........................................................31 Bond market development............................................................5
1.2 2.6 2.5 4.6 1
Financial access 7th pillar: Financial access........................................................15
4.0
Commercial access......................................................................20 Retail access ...............................................................................n/a
4.0 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Ireland Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.........1 .....■ ...............71.3 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................19 .....■ .................4.6 Efficacy of corporate boards .................................................24 .....■ .................4.9 Reliance on professional management .................................11 .....■ .................5.8 Willingness to delegate.........................................................18 .....■ .................4.6 Strength of auditing and reporting standards........................22 .....■ .................5.3 Ethical behavior of firms........................................................14 .....■ .................5.6 Protection of minority shareholders’ interests......................21 .....■ .................5.0 Official supervisory power ......................................................5 .....■ ...............13.0 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................26 .....■ .................3.1 Centralization of economic policymaking ..............................52 .....■ .................1.8 Regulation of securities exchanges ......................................35 .....■ .................4.5 Property rights.......................................................................13 .....■ .................6.1 Intellectual property protection .............................................13 .....■ .................5.6 Diversion of public funds.......................................................11 .....■ .................5.7 Public trust of politicians .......................................................28 .....■ .................3.3 Corruption perceptions index ................................................13 .....■ .................7.7 Strength of legal rights index ................................................11 .....■ .................8.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................16 .....■ .................4.4 Judicial independence .............................................................8 .....■ .................6.3 Irregular payments in judicial decisions ..................................6 .....■ .................6.1 Time to enforce a contract ....................................................31 .....■ .............515.0 Number of procedures to enforce a contract .........................1 .....■ ...............20.0 Strength of investor protection ...............................................4 .....■ .................8.3 Cost of enforcing contracts...................................................36 .....■ ...............26.9
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................16 .....■ .................5.3 Quality of math and science education.................................15 .....■ .................4.9 Extent of staff training...........................................................13 .....■ .................4.9 Local availability of specialized research and training services .............................................................20 .....■ .................4.9 Brain drain and ease of hiring foreign labor ............................4 .....■ .................5.2 Tertiary enrollment ................................................................19 .....■ ...............58.8
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................6 .....■ .................6.2 Distortive effect on competition of taxes and subsidies ........9 .....■ .................5.0 Marginal tax variation ..............................................................6 .....■ ...............–1.7 Time to pay taxes ....................................................................4 .....■ ...............76.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................35 .....■ .................4.1 Quality of telephone infrastructure .......................................32 .....■ .................6.1 Internet users ........................................................................17 .....■ ...............57.0 Broadband Internet subscribers ............................................20 .....■ ...............18.7 Telephone lines .....................................................................10 .....■ ...............49.1 Mobile telephone subscribers...............................................14 .....■ .............115.9
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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2: Country/Economy Profiles
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Ireland Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business .....................................................2 .....■ .................0.3 Cost of registering property ..................................................49 .....■ .................9.6 Cost of closing a business ....................................................20 .....■ .................9.0 Time to start a business ........................................................17 .....■ ...............13.0 Time to register property.......................................................30 .....■ ...............38.0 Time to close a business.........................................................1 .....■ .................0.4
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
138
Currency stability Change in real effective exchange rate.................................13 .....■ .................3.7 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................43 .....■ ...............–4.5 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................8 .....■ ...............–0.2
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................41 .....■ .................2.0 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt................................................44 .....■ .............296.2 Aggregate measure of real estate bubbles.............................1 .....■ .................6.7
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................18 .....■ ...............18.4 Foreign currency sovereign rating.........................................18 .....■ ...............18.4 Aggregate macroprudential indicator ....................................43 .....■ .................4.5 Manageability of public debt .................................................21 .....■ ...............34.8 Credit default swap spreads .................................................34 .....■ .............230.3
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .......................................3 .....■ .............185.9 Central bank assets to GDP ..................................................43 .....■ .................0.0 Financial system deposits to GDP ........................................13 .....■ ...............93.1 M2 to GDP ............................................................................15 .....■ .............101.0 Private credit to GDP...............................................................3 .....■ .............184.3 Bank deposits to GDP ...........................................................14 .....■ ...............93.1 Money market instruments to GDP........................................1 .....■ ...............45.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................40 .....■ .................3.6 Bank overhead costs.............................................................16 .....■ .................2.0 Public ownership of banks ....................................................37 .....■ ...............16.7 Bank operating costs to assets...............................................6 .....■ .................1.0 Non-performing bank loans to total loans ............................n/a .........................n/a
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....■ .............100.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................24 .....■ .................0.7 IPO proceeds amount ...........................................................12 .....■ .................0.6 Share of world IPOs ..............................................................30 .....■ .................0.4
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Ireland Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................29 .....■ .................0.3 M&A transaction value to GDP .............................................29 .....■ .................3.5 Share of total number of M&A deals ....................................27 .....■ .................0.5
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................12 .....■ ........63,064.0 Insurance density ....................................................................2 .....■ ..........7,262.0 Real growth of direct insurance premiums...........................10 .....■ .................0.2 Insurance penetration..............................................................5 .....■ .................0.1 Relative value-added of insurance to GDP..............................5 .....■ .................3.0
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ..............................................................7 .....■ .................6.4 Share of total number of securitization deals .......................30 .....■ .................0.2
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................23 .....■ .................0.3 Outright forward foreign exchange turnover ........................25 .....■ .................0.2 Foreign exchange swap turnover..........................................26 .....■ .................0.3
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................26 .....■ .................0.0 Interest rate derivatives turnover: Swaps .............................15 .....■ .................0.4 Interest rate derivatives turnover: Options ...........................23 .....■ .................0.1 Foreign exchange derivatives turnover: Currency swaps .....14 .....■ .................1.0 Foreign exchange derivatives turnover: Options ..................20 .....■ .................0.2
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................24 .....■ ...............88.1 Stock market capitalization to GDP.......................................34 .....■ ...............60.8 Stock market value traded to GDP........................................31 .....■ ...............53.6 Number of listed companies per 10,000 people..................n/a .........................n/a
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............10 .....■ ...............35.9 Public domestic bond market capitalization to GDP .............26 .....■ ...............28.5 Private international bonds to GDP .........................................1 .....■ .............279.1 Public international bonds to GDP ..........................................5 .....■ ...............27.9
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
139 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................24 .....■ .................5.5 Venture capital availability .....................................................29 .....■ .................3.2 Ease of access to credit........................................................54 .....■ .................2.3 Financing through local equity market ..................................47 .....■ .................3.4 Ease of access to loans ........................................................38 .....■ .................3.0 Foreign direct investment to GDP ..........................................4 .....■ ...............11.7
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches.....................................................7 .....■ ...............34.1 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Israel Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................7.1
US$ bn
24.3%
GDP (US$ billions), 2008 .........................................................201.8 GDP (current prices) per capita, 2008 ............................28,365.4
44.1%
GDP (PPP) as share (%) of world total, 2008 ........................0.29
1.9%
Average rate of real GDP growth (%), 2004–08....................4.93
■ ■ ■ ■
Public debt securities .......130.3 Private debt securities........10.2 Banking deposits ...............158.7 Equity securities ................236.4 Total
535.6
29.6%
Total/GDP: 326.4%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................28 3.7 1
2
3
4
5
6
7
Factors, policies, and institutions
140
1st pillar: Institutional environment .........................................24
4.7
Financial sector liberalization ....................................................29 Corporate governance.................................................................21 Legal and regulatory issues .......................................................21 Contract enforcement..................................................................22
4.6 4.9 4.4 4.8
2nd pillar: Business environment .............................................27
4.6
Human capital ...............................................................................31 Taxes...............................................................................................14 Infrastructure ................................................................................23 Cost of doing business ................................................................49
4.2 5.6 5.1 3.5
3rd pillar: Financial stability......................................................27
4.8
Currency stability..........................................................................47 Banking system stability..............................................................11 Risk of sovereign debt crisis ......................................................30
3.4 5.7 4.8 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................26
4.0
Size index .......................................................................................31 Efficiency index.............................................................................25 Financial information disclosure................................................15
2.8 5.2 3.7
5th pillar: Non-banking financial services .............................37
1.9
IPO activity.....................................................................................29 M&A activity..................................................................................33 Insurance .......................................................................................19 Securitization.................................................................................54
1.9 1.6 3.0 1.0
6th pillar: Financial markets......................................................32
2.3
Foreign exchange markets .........................................................25 Derivatives markets....................................................................n/a Equity market development ........................................................15 Bond market development..........................................................39
1.2 n/a 3.8 1.5 1
Financial access 7th pillar: Financial access........................................................24
3.7
Commercial access......................................................................19 Retail access.................................................................................14
4.1 3.3 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:22 PM
Page 141
Israel Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................26 .....■ .................2.5 Commitments to WTO agreement on trade in services.......41 .....■ ...............28.6 Domestic financial sector liberalization .................................26 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................17 .....■ .................4.6 Efficacy of corporate boards .................................................30 .....■ .................4.7 Reliance on professional management .................................19 .....■ .................5.4 Willingness to delegate.........................................................33 .....■ .................4.1 Strength of auditing and reporting standards........................27 .....■ .................5.2 Ethical behavior of firms........................................................22 .....■ .................5.2 Protection of minority shareholders’ interests......................20 .....■ .................5.0 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................28 .....■ .................3.1 Centralization of economic policymaking ..............................17 .....■ .................3.8 Regulation of securities exchanges ......................................33 .....■ .................4.5 Property rights.......................................................................35 .....■ .................4.5 Intellectual property protection .............................................27 .....■ .................4.0 Diversion of public funds.......................................................16 .....■ .................5.3 Public trust of politicians .......................................................22 .....■ .................3.5 Corruption perceptions index ................................................21 .....■ .................6.0 Strength of legal rights index ..................................................4 .....■ .................9.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................22 .....■ .................4.2 Judicial independence ...........................................................13 .....■ .................6.0 Irregular payments in judicial decisions ................................17 .....■ .................5.4 Time to enforce a contract ....................................................49 .....■ .............890.0 Number of procedures to enforce a contract .......................29 .....■ ...............35.0 Strength of investor protection ...............................................4 .....■ .................8.3 Cost of enforcing contracts...................................................30 .....■ ...............25.3
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................39 .....■ .................4.1 Quality of math and science education.................................46 .....■ .................3.2 Extent of staff training...........................................................26 .....■ .................4.5 Local availability of specialized research and training services .............................................................23 .....■ .................4.8 Brain drain and ease of hiring foreign labor ..........................45 .....■ .................3.6 Tertiary enrollment ................................................................21 .....■ ...............57.6
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................17 .....■ .................5.7 Distortive effect on competition of taxes and subsidies ......19 .....■ .................4.6 Marginal tax variation ............................................................12 .....■ .................0.8 Time to pay taxes ..................................................................26 .....■ .............230.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................29 .....■ .................4.5 Quality of telephone infrastructure .......................................10 .....■ .................6.8 Internet users ........................................................................32 .....■ ...............28.9 Broadband Internet subscribers ............................................17 .....■ ...............22.1 Telephone lines .....................................................................16 .....■ ...............43.9 Mobile telephone subscribers.................................................6 .....■ .............128.5
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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Israel Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................18 .....■ .................4.4 Cost of registering property ..................................................45 .....■ .................7.5 Cost of closing a business ....................................................50 .....■ ...............23.0 Time to start a business ........................................................44 .....■ ...............34.0 Time to register property.......................................................52 .....■ .............144.0 Time to close a business.......................................................41 .....■ .................4.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
142
Currency stability Change in real effective exchange rate.................................41 .....■ ...............–0.3 External vulnerability indicator...............................................29 .....■ .............141.2 Current account balance to GDP...........................................23 .....■ .................1.2 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................25 .....■ ...............55.5 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................15 .....■ .................0.5 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt................................................13 .....■ .................6.2 Aggregate measure of real estate bubbles...........................23 .....■ .................5.0
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................21 .....■ ...............17.0 Foreign currency sovereign rating.........................................26 .....■ ...............15.0 Aggregate macroprudential indicator ......................................5 .....■ .................5.8 Manageability of public debt .................................................50 .....■ ...............78.0 Credit default swap spreads .................................................25 .....■ .............175.0
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................21 .....■ ...............95.9 Central bank assets to GDP ..................................................27 .....■ .................1.0 Financial system deposits to GDP ........................................15 .....■ ...............86.5 M2 to GDP ............................................................................45 .....■ ...............49.0 Private credit to GDP.............................................................23 .....■ ...............86.6 Bank deposits to GDP ...........................................................16 .....■ ...............86.5 Money market instruments to GDP......................................27 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................30 .....■ .................3.9 Bank overhead costs.............................................................22 .....■ .................2.4 Public ownership of banks ....................................................39 .....■ ...............18.3 Bank operating costs to assets.............................................29 .....■ .................3.0 Non-performing bank loans to total loans .............................15 .....■ .................1.7
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................10 .....■ ...............91.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................32 .....■ .................0.4 IPO proceeds amount ...........................................................14 .....■ .................0.5 Share of world IPOs ..............................................................29 .....■ .................0.5
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Israel Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................33 .....■ .................0.2 M&A transaction value to GDP .............................................27 .....■ .................3.5 Share of total number of M&A deals ....................................36 .....■ .................0.3
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................29 .....■ ..........8,857.0 Insurance density ..................................................................22 .....■ ..........1,278.5 Real growth of direct insurance premiums...........................30 .....■ .................0.0 Insurance penetration............................................................21 .....■ .................0.1 Relative value-added of insurance to GDP..............................7 .....■ .................2.6
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................49 .....■ .................0.3 Share of total number of securitization deals .......................55 .....■ .................0.0
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................24 .....■ .................0.3 Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover..........................................27 .....■ .................0.2
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options ..................21 .....■ .................0.2
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................37 .....■ ...............55.1 Stock market capitalization to GDP.......................................15 .....■ .............127.2 Stock market value traded to GDP........................................26 .....■ ...............70.1 Number of listed companies per 10,000 people.....................4 .....■ .................0.9
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP .......................................29 .....■ .................6.2 Public international bonds to GDP ........................................21 .....■ .................4.9
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
143 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................20 .....■ .................5.7 Venture capital availability .....................................................12 .....■ .................3.9 Ease of access to credit........................................................33 .....■ .................3.4 Financing through local equity market ..................................28 .....■ .................4.3 Ease of access to loans ........................................................34 .....■ .................3.1 Foreign direct investment to GDP ........................................21 .....■ .................6.1
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts .....................................6 .....■ ......225,362.1 Commercial bank branches...................................................18 .....■ ...............19.8 Total number of ATMs...........................................................26 .....■ ...............47.4 Total number of point of sale (POS) devices.........................20 .....■ .............584.7 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Italy Key indicators
Financial assets by major type, 2007 15.4%
Population (millions), 2008 .......................................................59.3
US$ bn
GDP (US$ billions), 2008 ......................................................2,313.9
31.5%
GDP (current prices) per capita, 2008 ............................38,996.2 GDP (PPP) as share (%) of world total, 2008 ........................2.64
21.7%
Average rate of real GDP growth (%), 2004–08....................0.95
■ ■ ■ ■
Public debt securities ....2,188.5 Private debt securities...2,180.9 Banking deposits ............1,509.2 Equity securities .............1,072.7 Total
6,951.3
31.4%
Total/GDP: 328.3%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................21 4.0 1
2
3
4
5
6
7
Factors, policies, and institutions
144
1st pillar: Institutional environment .........................................32
4.2
Financial sector liberalization ......................................................1 Corporate governance.................................................................54 Legal and regulatory issues .......................................................40 Contract enforcement..................................................................52
7.0 3.4 3.3 3.2
2nd pillar: Business environment .............................................22
4.9
Human capital ...............................................................................30 Taxes...............................................................................................29 Infrastructure ................................................................................22 Cost of doing business ................................................................18
4.2 4.8 5.1 5.6
3rd pillar: Financial stability......................................................44
4.4
Currency stability..........................................................................26 Banking system stability..............................................................38 Risk of sovereign debt crisis ......................................................37
4.3 4.7 4.3 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................25
4.0
Size index .......................................................................................25 Efficiency index.............................................................................28 Financial information disclosure................................................14
3.1 5.0 3.8
5th pillar: Non-banking financial services .............................19
2.8
IPO activity.....................................................................................22 M&A activity..................................................................................13 Insurance .......................................................................................23 Securitization.................................................................................19
2.2 3.7 2.7 2.7
6th pillar: Financial markets......................................................15
3.7
Foreign exchange markets .........................................................17 Derivatives markets .....................................................................10 Equity market development ........................................................21 Bond market development............................................................9
1.7 5.3 3.3 4.5 1
Financial access 7th pillar: Financial access........................................................21
3.7
Commercial access......................................................................52 Retail access...................................................................................7
2.9 4.5 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Italy Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.........1 .....■ ...............72.8 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................44 .....■ .................4.1 Efficacy of corporate boards .................................................53 .....■ .................3.9 Reliance on professional management .................................55 .....■ .................3.5 Willingness to delegate.........................................................53 .....■ .................3.0 Strength of auditing and reporting standards........................48 .....■ .................4.0 Ethical behavior of firms........................................................42 .....■ .................3.6 Protection of minority shareholders’ interests......................53 .....■ .................3.4 Official supervisory power ....................................................33 .....■ .................7.5 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................52 .....■ .................2.2 Centralization of economic policymaking ..............................20 .....■ .................3.7 Regulation of securities exchanges ......................................43 .....■ .................4.2 Property rights.......................................................................38 .....■ .................4.4 Intellectual property protection .............................................31 .....■ .................3.9 Diversion of public funds.......................................................39 .....■ .................3.1 Public trust of politicians .......................................................46 .....■ .................1.9 Corruption perceptions index ................................................31 .....■ .................4.8 Strength of legal rights index ................................................49 .....■ .................3.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................46 .....■ .................2.6 Judicial independence ...........................................................46 .....■ .................3.1 Irregular payments in judicial decisions ................................37 .....■ .................3.9 Time to enforce a contract ....................................................52 .....■ ..........1,210.0 Number of procedures to enforce a contract .......................45 .....■ ...............41.0 Strength of investor protection .............................................25 .....■ .................5.7 Cost of enforcing contracts...................................................40 .....■ ...............29.9
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................30 .....■ .................4.4 Quality of math and science education.................................38 .....■ .................3.7 Extent of staff training...........................................................54 .....■ .................3.1 Local availability of specialized research and training services .............................................................31 .....■ .................4.5 Brain drain and ease of hiring foreign labor ..........................39 .....■ .................3.9 Tertiary enrollment ................................................................12 .....■ ...............67.0
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................37 .....■ .................3.9 Distortive effect on competition of taxes and subsidies ......50 .....■ .................3.7 Marginal tax variation ..............................................................8 .....■ ...............–0.5 Time to pay taxes ..................................................................39 .....■ .............334.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................40 .....■ .................3.8 Quality of telephone infrastructure .......................................49 .....■ .................5.3 Internet users ........................................................................21 .....■ ...............54.4 Broadband Internet subscribers ............................................21 .....■ ...............18.4 Telephone lines .....................................................................16 .....■ ...............43.9 Mobile telephone subscribers.................................................2 .....■ .............153.1
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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Italy Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................44 .....■ ...............17.8 Cost of registering property ....................................................9 .....■ .................0.6 Cost of closing a business ....................................................45 .....■ ...............22.0 Time to start a business ........................................................12 .....■ ...............10.0 Time to register property.......................................................23 .....■ ...............27.0 Time to close a business.......................................................20 .....■ .................1.8
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
146
Currency stability Change in real effective exchange rate...................................9 .....■ .................4.6 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................40 .....■ ...............–3.2 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................13 .....■ ...............–1.5
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator..................................................17 .....■ .................7.0 Manageability of private debt................................................38 .....■ .............146.3 Aggregate measure of real estate bubbles...........................38 .....■ .................3.7
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................24 .....■ ...............16.0 Foreign currency sovereign rating.........................................22 .....■ ...............16.0 Aggregate macroprudential indicator ....................................42 .....■ .................4.5 Manageability of public debt .................................................54 .....■ .............105.8 Credit default swap spreads .................................................18 .....■ .............110.4
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................15 .....■ .............116.2 Central bank assets to GDP ..................................................11 .....■ .................4.8 Financial system deposits to GDP ........................................26 .....■ ...............60.7 M2 to GDP ............................................................................23 .....■ ...............78.1 Private credit to GDP.............................................................20 .....■ ...............96.5 Bank deposits to GDP ...........................................................26 .....■ ...............60.7 Money market instruments to GDP......................................26 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................44 .....■ .................3.4 Bank overhead costs.............................................................29 .....■ .................2.7 Public ownership of banks ....................................................26 .....■ .................8.1 Bank operating costs to assets.............................................23 .....■ .................2.2 Non-performing bank loans to total loans .............................41 .....■ .................4.6
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................14 .....■ ...............74.9 Public credit registry coverage ..............................................13 .....■ ...............11.8
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................13 .....■ .................2.0 IPO proceeds amount ...........................................................39 .....■ .................0.2 Share of world IPOs ..............................................................16 .....■ .................1.8
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Italy Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share..................................................................9 .....■ .................3.0 M&A transaction value to GDP .............................................19 .....■ .................4.6 Share of total number of M&A deals ....................................13 .....■ .................2.0
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ....................................................6 .....■ ......142,328.0 Insurance density ..................................................................20 .....■ ..........2,322.0 Real growth of direct insurance premiums...........................50 .....■ ...............–0.1 Insurance penetration............................................................19 .....■ .................0.1 Relative value-added of insurance to GDP............................38 .....■ .................0.7
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................28 .....■ .................2.0 Share of total number of securitization deals .......................14 .....■ .................1.0
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................16 .....■ .................0.9 Outright forward foreign exchange turnover ........................16 .....■ .................0.6 Foreign exchange swap turnover..........................................15 .....■ .................1.0
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................12 .....■ .................0.7 Interest rate derivatives turnover: Swaps ...............................9 .....■ .................1.6 Interest rate derivatives turnover: Options .............................7 .....■ .................1.0 Foreign exchange derivatives turnover: Currency swaps .....21 .....■ .................0.3 Foreign exchange derivatives turnover: Options ..................12 .....■ .................0.7
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio.....................................................2 .....■ .............218.7 Stock market capitalization to GDP.......................................39 .....■ ...............50.2 Stock market value traded to GDP........................................21 .....■ .............109.8 Number of listed companies per 10,000 people...................30 .....■ .................0.1
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP..............3 .....■ ...............85.7 Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP .......................................13 .....■ ...............60.5 Public international bonds to GDP ..........................................9 .....■ ...............15.0
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
147 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................42 .....■ .................4.3 Venture capital availability .....................................................51 .....■ .................2.3 Ease of access to credit........................................................35 .....■ .................3.3 Financing through local equity market ..................................45 .....■ .................3.7 Ease of access to loans ........................................................53 .....■ .................2.2 Foreign direct investment to GDP ........................................46 .....■ .................1.9
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................23 .....■ ........76,320.5 Commercial bank branches.....................................................1 .....■ ...............53.0 Total number of ATMs.............................................................9 .....■ ...............93.9 Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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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%
GDP (current prices) per capita, 2008 ............................38,559.1 GDP (PPP) as share (%) of world total, 2008 ........................6.37 Average rate of real GDP growth (%), 2004–08....................1.69 37.7%
■ ■ ■ ■
Public debt securities ....7,471.5 Private debt securities...2,069.6 Banking deposits ............8,463.4 Equity securities .............4,453.5 Total
9.2%
22,457.9
Total/GDP: 512.2%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index........................................................9 4.6 1
2
3
4
5
6
7
Factors, policies, and institutions
148
1st pillar: Institutional environment .........................................17
5.4
Financial sector liberalization ....................................................17 Corporate governance.................................................................11 Legal and regulatory issues .......................................................19 Contract enforcement..................................................................12
6.5 5.1 4.6 5.5
2nd pillar: Business environment .............................................15
5.4
Human capital ...............................................................................17 Taxes...............................................................................................15 Infrastructure ................................................................................18 Cost of doing business ................................................................13
4.8 5.5 5.4 6.0
3rd pillar: Financial stability......................................................34
4.6
Currency stability..........................................................................36 Banking system stability..............................................................40 Risk of sovereign debt crisis ......................................................25
4.0 4.6 5.1 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services........................................3
5.1
Size index .........................................................................................4 Efficiency index.............................................................................13 Financial information disclosure................................................20
5.5 5.7 3.3
5th pillar: Non-banking financial services ...............................6
4.0
IPO activity.......................................................................................7 M&A activity....................................................................................7 Insurance .........................................................................................8 Securitization.................................................................................20
4.3 4.7 4.5 2.7
6th pillar: Financial markets........................................................5
4.8
Foreign exchange markets ...........................................................3 Derivatives markets .......................................................................4 Equity market development ........................................................17 Bond market development..........................................................19
6.7 6.9 3.7 3.3 1
Financial access 7th pillar: Financial access........................................................37
3.0
Commercial access......................................................................41 Retail access.................................................................................31
3.4 2.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Japan Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................24 .....■ .................1.7 Commitments to WTO agreement on trade in services.......14 .....■ ...............62.5 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................32 .....■ .................4.4 Efficacy of corporate boards .................................................18 .....■ .................5.1 Reliance on professional management .................................15 .....■ .................5.6 Willingness to delegate.........................................................13 .....■ .................4.8 Strength of auditing and reporting standards........................24 .....■ .................5.3 Ethical behavior of firms........................................................19 .....■ .................5.4 Protection of minority shareholders’ interests......................23 .....■ .................4.9 Official supervisory power ....................................................13 .....■ ...............12.0 Private monitoring of the banking industry .............................2 .....■ .................8.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................11 .....■ .................3.9 Centralization of economic policymaking ..............................46 .....■ .................2.5 Regulation of securities exchanges ......................................26 .....■ .................4.9 Property rights.......................................................................14 .....■ .................5.9 Intellectual property protection .............................................16 .....■ .................5.4 Diversion of public funds.......................................................20 .....■ .................4.9 Public trust of politicians .......................................................32 .....■ .................3.1 Corruption perceptions index ................................................15 .....■ .................7.3 Strength of legal rights index ................................................18 .....■ .................7.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................20 .....■ .................4.3 Judicial independence ...........................................................16 .....■ .................5.5 Irregular payments in judicial decisions ................................13 .....■ .................6.0 Time to enforce a contract ....................................................10 .....■ .............316.0 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Strength of investor protection .............................................11 .....■ .................7.0 Cost of enforcing contracts...................................................24 .....■ ...............22.7
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................44 .....■ .................3.9 Quality of math and science education.................................16 .....■ .................4.9 Extent of staff training.............................................................5 .....■ .................5.4 Local availability of specialized research and training services .............................................................13 .....■ .................5.5 Brain drain and ease of hiring foreign labor ..........................29 .....■ .................4.2 Tertiary enrollment ................................................................22 .....■ ...............57.3
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................13 .....■ .................6.0 Distortive effect on competition of taxes and subsidies ......32 .....■ .................4.1 Marginal tax variation ..............................................................3 .....■ ...............–4.0 Time to pay taxes ..................................................................40 .....■ .............355.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................14 .....■ .................5.8 Quality of telephone infrastructure .........................................8 .....■ .................6.8 Internet users ........................................................................13 .....■ ...............68.9 Broadband Internet subscribers ............................................16 .....■ ...............22.1 Telephone lines .....................................................................21 .....■ ...............40.0 Mobile telephone subscribers...............................................36 .....■ ...............83.9
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
149
2: Country/Economy Profiles
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Japan Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................27 .....■ .................7.5 Cost of registering property ..................................................37 .....■ .................5.0 Cost of closing a business ......................................................5 .....■ .................4.0 Time to start a business ........................................................32 .....■ ...............23.0 Time to register property.......................................................12 .....■ ...............14.0 Time to close a business.........................................................2 .....■ .................0.6
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
150
Currency stability Change in real effective exchange rate.................................48 .....■ ...............–4.2 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................18 .....■ .................3.2 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................5 .....■ ...............53.3
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................32 .....■ .................1.5 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt ...............................................n/a .........................n/a Aggregate measure of real estate bubbles...........................31 .....■ .................4.3
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................19 .....■ ...............18.0 Foreign currency sovereign rating.........................................19 .....■ ...............18.0 Aggregate macroprudential indicator ....................................15 .....■ .................5.4 Manageability of public debt .................................................55 .....■ .............172.1 Credit default swap spreads ...................................................6 .....■ ...............49.5
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .......................................7 .....■ .............153.3 Central bank assets to GDP ....................................................2 .....■ ...............14.8 Financial system deposits to GDP ..........................................2 .....■ .............186.2 M2 to GDP ..............................................................................5 .....■ .............144.7 Private credit to GDP.............................................................19 .....■ ...............96.8 Bank deposits to GDP .............................................................2 .....■ .............186.2 Money market instruments to GDP......................................22 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................49 .....■ .................3.0 Bank overhead costs...............................................................8 .....■ .................1.4 Public ownership of banks ....................................................20 .....■ .................5.9 Bank operating costs to assets...............................................1 .....■ .................0.8 Non-performing bank loans to total loans .............................13 .....■ .................1.5
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................13 .....■ ...............76.2 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................6 .....■ .................3.9 IPO proceeds amount ...........................................................43 .....■ .................0.2 Share of world IPOs ................................................................3 .....■ ...............10.6
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Japan Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share..................................................................8 .....■ .................3.2 M&A transaction value to GDP .............................................40 .....■ .................2.2 Share of total number of M&A deals ......................................3 .....■ .................6.8
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ....................................................3 .....■ ......424,755.0 Insurance density ..................................................................13 .....■ ..........3,319.3 Real growth of direct insurance premiums...........................49 .....■ .................0.0 Insurance penetration..............................................................9 .....■ .................0.1 Relative value-added of insurance to GDP............................11 .....■ .................2.0
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................42 .....■ .................1.0 Share of total number of securitization deals .......................11 .....■ .................1.3
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover..............................................4 .....■ .................7.9 Outright forward foreign exchange turnover ..........................3 .....■ .................6.0 Foreign exchange swap turnover............................................6 .....■ .................5.1
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................11 .....■ .................1.0 Interest rate derivatives turnover: Swaps ...............................7 .....■ .................3.2 Interest rate derivatives turnover: Options .............................3 .....■ .................8.8 Foreign exchange derivatives turnover: Currency swaps .......8 .....■ .................2.7 Foreign exchange derivatives turnover: Options ....................4 .....■ .................4.3
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................15 .....■ .............140.3 Stock market capitalization to GDP.......................................23 .....■ .............105.8 Stock market value traded to GDP........................................15 .....■ .............148.4 Number of listed companies per 10,000 people...................14 .....■ .................0.3
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ...............1 .....■ .............198.6 Private international bonds to GDP .......................................22 .....■ ...............21.3 Public international bonds to GDP ........................................39 .....■ .................0.1
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
151 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................31 .....■ .................4.9 Venture capital availability .....................................................38 .....■ .................3.0 Ease of access to credit........................................................25 .....■ .................3.6 Financing through local equity market ..................................20 .....■ .................4.5 Ease of access to loans ........................................................33 .....■ .................3.2 Foreign direct investment to GDP ........................................51 .....■ .................0.5
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches...................................................32 .....■ ...............12.5 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices.........................12 .....■ ..........1,353.1 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Jordan Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................5.9
US$ bn
16.1%
GDP (US$ billions), 2008 ...........................................................20.0 GDP (current prices) per capita, 2008 ..............................3,421.4 GDP (PPP) as share (%) of world total, 2008 ........................0.05 57.7%
Average rate of real GDP growth (%), 2004–08....................7.45
26.2%
■ ■ ■ ■
Public debt securities .........11.5 Private debt securities.........n/a Banking deposits .................18.7 Equity securities ..................41.2 Total
71.4
Total/GDP: 432.1%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................25 3.9 1
2
3
4
5
6
7
Factors, policies, and institutions
152
1st pillar: Institutional environment .........................................23
4.7
Financial sector liberalization ....................................................20 Corporate governance.................................................................41 Legal and regulatory issues .......................................................25 Contract enforcement..................................................................38
6.3 4.3 4.2 4.1
2nd pillar: Business environment .............................................37
4.1
Human capital ...............................................................................35 Taxes...............................................................................................23 Infrastructure ................................................................................40 Cost of doing business ................................................................48
4.1 5.1 3.4 3.9
3rd pillar: Financial stability......................................................50
3.8
Currency stability..........................................................................51 Banking system stability..............................................................16 Risk of sovereign debt crisis ......................................................50
2.6 5.6 2.6 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................15
4.4
Size index .........................................................................................9 Efficiency index.............................................................................11 Financial information disclosure................................................52
4.7 5.8 1.1
5th pillar: Non-banking financial services .............................23
2.6
IPO activity.....................................................................................16 M&A activity..................................................................................31 Insurance .....................................................................................n/a Securitization.................................................................................15
2.8 1.6 n/a 3.3
6th pillar: Financial markets......................................................13
3.8
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................14 Bond market development ........................................................n/a
n/a n/a 3.8 n/a 1
Financial access 7th pillar: Financial access........................................................20
3.7
Commercial access........................................................................9 Retail access.................................................................................20
4.5 3.0 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Jordan Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.......21 .....■ ...............49.4 Domestic financial sector liberalization ................................n/a .........................n/a
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................52 .....■ .................3.5 Efficacy of corporate boards .................................................33 .....■ .................4.7 Reliance on professional management .................................41 .....■ .................4.2 Willingness to delegate.........................................................37 .....■ .................4.0 Strength of auditing and reporting standards........................19 .....■ .................5.4 Ethical behavior of firms........................................................23 .....■ .................5.0 Protection of minority shareholders’ interests........................9 .....■ .................5.3 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ...........................22 .....■ .................6.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation ...........................................7 .....■ .................4.0 Centralization of economic policymaking ..............................38 .....■ .................2.8 Regulation of securities exchanges ......................................18 .....■ .................5.2 Property rights.......................................................................18 .....■ .................5.8 Intellectual property protection .............................................22 .....■ .................4.7 Diversion of public funds.......................................................23 .....■ .................4.7 Public trust of politicians .......................................................17 .....■ .................3.9 Corruption perceptions index ................................................26 .....■ .................5.1 Strength of legal rights index ................................................39 .....■ .................4.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................30 .....■ .................3.7 Judicial independence ...........................................................21 .....■ .................5.0 Irregular payments in judicial decisions ................................22 .....■ .................5.1 Time to enforce a contract ....................................................45 .....■ .............689.0 Number of procedures to enforce a contract .......................41 .....■ ...............39.0 Strength of investor protection .............................................47 .....■ .................4.3 Cost of enforcing contracts...................................................42 .....■ ...............31.2
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................33 .....■ .................4.3 Quality of math and science education.................................22 .....■ .................4.7 Extent of staff training...........................................................38 .....■ .................4.0 Local availability of specialized research and training services .............................................................32 .....■ .................4.5 Brain drain and ease of hiring foreign labor ..........................48 .....■ .................3.4 Tertiary enrollment ................................................................34 .....■ ...............39.0
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................22 .....■ .................5.2 Distortive effect on competition of taxes and subsidies ......21 .....■ .................4.5 Marginal tax variation ............................................................33 .....■ .................9.9 Time to pay taxes ....................................................................9 .....■ .............101.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................21 .....■ .................5.2 Quality of telephone infrastructure .......................................17 .....■ .................6.6 Internet users ........................................................................44 .....■ ...............19.0 Broadband Internet subscribers ............................................45 .....■ .................1.5 Telephone lines .....................................................................47 .....■ .................9.9 Mobile telephone subscribers...............................................40 .....■ ...............80.5
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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2: Country/Economy Profiles
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Jordan Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................52 .....■ ...............60.4 Cost of registering property ..................................................50 .....■ ...............10.0 Cost of closing a business ....................................................20 .....■ .................9.0 Time to start a business ........................................................21 .....■ ...............14.0 Time to register property.......................................................20 .....■ ...............22.0 Time to close a business.......................................................48 .....■ .................4.3
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
154
Currency stability Change in real effective exchange rate.................................36 .....■ .................0.0 External vulnerability indicator...............................................25 .....■ .............112.9 Current account balance to GDP...........................................55 .....■ .............–12.7 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................29 .....■ ...............90.0 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................20 .....■ .................1.0 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt ...............................................n/a .........................n/a Aggregate measure of real estate bubbles.............................8 .....■ .................6.1
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................39 .....■ ...............12.0 Foreign currency sovereign rating.........................................44 .....■ .................9.0 Aggregate macroprudential indicator ....................................50 .....■ .................3.5 Manageability of public debt .................................................44 .....■ ...............62.2 Credit default swap spreads.................................................n/a .........................n/a
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................14 .....■ .............116.3 Central bank assets to GDP ....................................................9 .....■ .................5.7 Financial system deposits to GDP ..........................................8 .....■ .............111.7 M2 to GDP ..............................................................................9 .....■ .............126.3 Private credit to GDP.............................................................21 .....■ ...............92.5 Bank deposits to GDP .............................................................9 .....■ .............111.7 Money market instruments to GDP .....................................n/a .........................n/a
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................12 .....■ .................4.7 Bank overhead costs.............................................................17 .....■ .................2.0 Public ownership of banks ......................................................1 .....■ .................0.0 Bank operating costs to assets.............................................21 .....■ .................2.0 Non-performing bank loans to total loans .............................38 .....■ .................4.0
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................46 .....■ .................0.0 Public credit registry coverage ..............................................20 .....■ .................1.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................46 .....■ .................0.1 IPO proceeds amount .............................................................7 .....■ .................1.2 Share of world IPOs ..............................................................34 .....■ .................0.3
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Jordan Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................50 .....■ .................0.0 M&A transaction value to GDP .............................................18 .....■ .................4.7 Share of total number of M&A deals ....................................50 .....■ .................0.1
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct..................................................n/a .........................n/a Insurance density .................................................................n/a .........................n/a Real growth of direct insurance premiums ..........................n/a .........................n/a Insurance penetration...........................................................n/a .........................n/a Relative value-added of insurance to GDP............................12 .....■ .................1.9
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ..............................................................6 .....■ .................6.5 Share of total number of securitization deals .......................54 .....■ .................0.0
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................40 .....■ ...............48.9 Stock market capitalization to GDP.........................................4 .....■ .............225.2 Stock market value traded to GDP........................................20 .....■ .............110.1 Number of listed companies per 10,000 people.....................9 .....■ .................0.4
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
155 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................33 .....■ .................4.8 Venture capital availability .....................................................32 .....■ .................3.1 Ease of access to credit........................................................11 .....■ .................4.2 Financing through local equity market ....................................4 .....■ .................4.9 Ease of access to loans ........................................................30 .....■ .................3.4 Foreign direct investment to GDP ..........................................5 .....■ ...............11.1
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................21 .....■ ........81,423.0 Commercial bank branches...................................................25 .....■ ...............16.2 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate .............................................7 .....■ ...............12.4
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Kazakhstan Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................15.6
US$ bn
7.3%
GDP (US$ billions), 2008 .........................................................132.2 GDP (current prices) per capita, 2008 ..............................8,502.1
37.4% 26.6%
GDP (PPP) as share (%) of world total, 2008 ........................0.26 Average rate of real GDP growth (%), 2004–08....................8.42
■ ■ ■ ■
Public debt securities ...........8.1 Private debt securities........29.5 Banking deposits .................31.8 Equity securities ..................41.4 Total
110.8
Total/GDP: 105.6%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................47 2.9 1
2
3
4
5
6
7
Factors, policies, and institutions
156
1st pillar: Institutional environment .........................................47
3.4
Financial sector liberalization ....................................................49 Corporate governance.................................................................49 Legal and regulatory issues .......................................................48 Contract enforcement..................................................................29
2.2 3.9 3.1 4.3
2nd pillar: Business environment .............................................41
4.1
Human capital ...............................................................................40 Taxes...............................................................................................43 Infrastructure ................................................................................44 Cost of doing business ................................................................25
3.8 4.0 3.0 5.4
3rd pillar: Financial stability......................................................54
3.5
Currency stability..........................................................................49 Banking system stability..............................................................50 Risk of sovereign debt crisis ......................................................42
3.0 3.9 3.5 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................48
2.5
Size index .......................................................................................46 Efficiency index.............................................................................45 Financial information disclosure................................................38
1.5 3.9 1.8
5th pillar: Non-banking financial services .............................20
2.8
IPO activity.....................................................................................13 M&A activity..................................................................................41 Insurance .......................................................................................41 Securitization...................................................................................4
3.1 1.4 1.8 4.9
6th pillar: Financial markets......................................................51
1.4
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................49 Bond market development ........................................................n/a
n/a n/a 1.4 n/a 1
Financial access 7th pillar: Financial access........................................................46
2.9
Commercial access......................................................................37 Retail access.................................................................................40
3.5 2.3 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:22 PM
Page 157
Kazakhstan Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–1.1 Commitments to WTO agreement on trade in services......n/a .........................n/a Domestic financial sector liberalization .................................47 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................45 .....■ .................4.0 Efficacy of corporate boards .................................................47 .....■ .................4.3 Reliance on professional management .................................53 .....■ .................3.9 Willingness to delegate.........................................................48 .....■ .................3.4 Strength of auditing and reporting standards........................47 .....■ .................4.1 Ethical behavior of firms........................................................43 .....■ .................3.6 Protection of minority shareholders’ interests......................49 .....■ .................3.7 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................30 .....■ .................3.0 Centralization of economic policymaking ..............................24 .....■ .................3.4 Regulation of securities exchanges ......................................54 .....■ .................3.2 Property rights.......................................................................50 .....■ .................3.6 Intellectual property protection .............................................41 .....■ .................3.2 Diversion of public funds.......................................................37 .....■ .................3.2 Public trust of politicians .......................................................31 .....■ .................3.1 Corruption perceptions index ................................................52 .....■ .................2.2 Strength of legal rights index ................................................36 .....■ .................5.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................28 .....■ .................3.7 Judicial independence ...........................................................49 .....■ .................3.1 Irregular payments in judicial decisions ................................42 .....■ .................3.4 Time to enforce a contract ......................................................3 .....■ .............230.0 Number of procedures to enforce a contract .......................38 .....■ ...............38.0 Strength of investor protection .............................................25 .....■ .................5.7 Cost of enforcing contracts...................................................22 .....■ ...............22.0
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................49 .....■ .................3.6 Quality of math and science education.................................35 .....■ .................3.9 Extent of staff training...........................................................44 .....■ .................3.7 Local availability of specialized research and training services .............................................................41 .....■ .................4.0 Brain drain and ease of hiring foreign labor ..........................46 .....■ .................3.6 Tertiary enrollment ................................................................28 .....■ ...............47.0
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................42 .....■ .................3.4 Distortive effect on competition of taxes and subsidies ......51 .....■ .................3.6 Marginal tax variation ............................................................44 .....■ ...............14.4 Time to pay taxes ..................................................................33 .....■ .............271.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................38 .....■ .................3.8 Quality of telephone infrastructure .......................................51 .....■ .................5.0 Internet users ........................................................................48 .....■ ...............12.3 Broadband Internet subscribers ............................................42 .....■ .................1.8 Telephone lines .....................................................................35 .....■ ...............21.0 Mobile telephone subscribers...............................................41 .....■ ...............79.9
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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2: Country/Economy Profiles
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Kazakhstan Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................21 .....■ .................5.2 Cost of registering property ....................................................2 .....■ .................0.1 Cost of closing a business ....................................................37 .....■ ...............18.0 Time to start a business ........................................................30 .....■ ...............21.0 Time to register property.......................................................32 .....■ ...............40.0 Time to close a business.......................................................38 .....■ .................3.3
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
158
Currency stability Change in real effective exchange rate.................................36 .....■ .................0.0 External vulnerability indicator...............................................31 .....■ .............201.8 Current account balance to GDP...........................................15 .....■ .................5.3 Dollarization vulnerability indicator ........................................31 .....■ ...............26.7 External debt to GDP (developing economies) .....................30 .....■ ...............93.5 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................41 .....■ .................2.0 Financial strengths indicator..................................................47 .....■ .................2.0 Manageability of private debt................................................29 .....■ ...............32.7 Aggregate measure of real estate bubbles ..........................n/a .........................n/a
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................40 .....■ ...............11.9 Foreign currency sovereign rating.........................................39 .....■ ...............10.9 Aggregate macroprudential indicator ....................................47 .....■ .................4.2 Manageability of public debt ...................................................4 .....■ .................8.6 Credit default swap spreads .................................................43 .....■ .............508.9
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................39 .....■ ...............49.6 Central bank assets to GDP ..................................................41 .....■ .................0.2 Financial system deposits to GDP ........................................46 .....■ ...............26.8 M2 to GDP ............................................................................48 .....■ ...............40.0 Private credit to GDP.............................................................33 .....■ ...............48.2 Bank deposits to GDP ...........................................................48 .....■ ...............26.8 Money market instruments to GDP .....................................n/a .........................n/a
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................19 .....■ .................4.4 Bank overhead costs.............................................................35 .....■ .................3.1 Public ownership of banks ....................................................44 .....■ ...............36.4 Bank operating costs to assets.............................................44 .....■ .................5.4 Non-performing bank loans to total loans .............................45 .....■ .................6.5
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................32 .....■ ...............25.6 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................27 .....■ .................0.7 IPO proceeds amount .............................................................5 .....■ .................1.4 Share of world IPOs ..............................................................40 .....■ .................0.2
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Kazakhstan Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................43 .....■ .................0.1 M&A transaction value to GDP .............................................33 .....■ .................2.8 Share of total number of M&A deals ....................................49 .....■ .................0.1
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................45 .....■ ..........1,202.0 Insurance density ..................................................................42 .....■ ...............78.0 Real growth of direct insurance premiums...........................19 .....■ .................0.1 Insurance penetration............................................................45 .....■ .................0.0 Relative value-added of insurance to GDP ...........................n/a .........................n/a
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ..............................................................4 .....■ .................8.4 Share of total number of securitization deals .......................16 .....■ .................0.9
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................47 .....■ ...............20.7 Stock market capitalization to GDP.......................................43 .....■ ...............41.3 Stock market value traded to GDP........................................46 .....■ .................8.6 Number of listed companies per 10,000 people...................28 .....■ .................0.1
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
159 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................51 .....■ .................3.5 Venture capital availability .....................................................40 .....■ .................2.9 Ease of access to credit........................................................46 .....■ .................2.9 Financing through local equity market ..................................51 .....■ .................3.1 Ease of access to loans ........................................................46 .....■ .................2.7 Foreign direct investment to GDP ..........................................6 .....■ .................9.8
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches...................................................17 .....■ ...............21.6 Total number of ATMs...........................................................22 .....■ ...............52.8 Total number of point of sale (POS) devices.........................28 .....■ .............173.2 MFI borrowers’ penetration rate ...........................................14 .....■ .................3.4
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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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 GDP (current prices) per capita, 2008 ............................19,504.5
40.8%
25.9%
GDP (PPP) as share (%) of world total, 2008 ........................1.85 Average rate of real GDP growth (%), 2004–08....................4.22
■ ■ ■ ■
Public debt securities .......308.4 Private debt securities......713.5 Banking deposits ...............608.0 Equity securities .............1,123.6 Total
2,753.5
22.1%
Total/GDP: 262.4%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................23 3.9 1
2
3
4
5
6
7
Factors, policies, and institutions
160
1st pillar: Institutional environment .........................................31
4.3
Financial sector liberalization ....................................................37 Corporate governance.................................................................31 Legal and regulatory issues .......................................................27 Contract enforcement..................................................................21
3.6 4.6 4.0 4.8
2nd pillar: Business environment .............................................16
5.3
Human capital ...............................................................................15 Taxes...............................................................................................31 Infrastructure ................................................................................11 Cost of doing business ................................................................15
5.0 4.7 5.8 5.8
3rd pillar: Financial stability......................................................28
4.7
Currency stability..........................................................................19 Banking system stability..............................................................43 Risk of sovereign debt crisis ......................................................22
4.6 4.5 5.2 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................22
4.2
Size index .......................................................................................26 Efficiency index.............................................................................19 Financial information disclosure................................................16
3.1 5.4 3.7
5th pillar: Non-banking financial services .............................18
3.0
IPO activity.....................................................................................14 M&A activity..................................................................................18 Insurance .........................................................................................6 Securitization.................................................................................36
3.1 2.7 4.5 1.7
6th pillar: Financial markets......................................................20
3.3
Foreign exchange markets .........................................................15 Derivatives markets .....................................................................18 Equity market development ........................................................11 Bond market development..........................................................18
1.9 3.3 4.5 3.3 1
Financial access 7th pillar: Financial access........................................................52
2.5
Commercial access......................................................................47 Retail access.................................................................................45
3.2 1.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Korea, Rep. Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................36 .....■ .................0.2 Commitments to WTO agreement on trade in services......n/a .........................n/a Domestic financial sector liberalization .................................38 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................38 .....■ .................4.3 Efficacy of corporate boards .................................................31 .....■ .................4.7 Reliance on professional management .................................29 .....■ .................4.9 Willingness to delegate.........................................................43 .....■ .................3.7 Strength of auditing and reporting standards........................34 .....■ .................4.9 Ethical behavior of firms........................................................28 .....■ .................4.6 Protection of minority shareholders’ interests......................41 .....■ .................4.3 Official supervisory power ....................................................11 .....■ ...............12.5 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................36 .....■ .................2.8 Centralization of economic policymaking ..............................27 .....■ .................3.3 Regulation of securities exchanges ......................................32 .....■ .................4.5 Property rights.......................................................................29 .....■ .................5.0 Intellectual property protection .............................................26 .....■ .................4.2 Diversion of public funds.......................................................25 .....■ .................4.1 Public trust of politicians .......................................................34 .....■ .................2.8 Corruption perceptions index ................................................23 .....■ .................5.6 Strength of legal rights index ................................................18 .....■ .................7.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................47 .....■ .................2.6 Judicial independence ...........................................................32 .....■ .................4.1 Irregular payments in judicial decisions ................................27 .....■ .................4.8 Time to enforce a contract ......................................................3 .....■ .............230.0 Number of procedures to enforce a contract .......................29 .....■ ...............35.0 Strength of investor protection .............................................34 .....■ .................5.3 Cost of enforcing contracts.....................................................3 .....■ ...............10.3
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................28 .....■ .................4.5 Quality of math and science education.................................11 .....■ .................5.2 Extent of staff training...........................................................22 .....■ .................4.7 Local availability of specialized research and training services .............................................................27 .....■ .................4.6 Brain drain and ease of hiring foreign labor ..........................33 .....■ .................4.1 Tertiary enrollment ..................................................................2 .....■ ...............92.6
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................26 .....■ .................4.8 Distortive effect on competition of taxes and subsidies ......34 .....■ .................4.1 Marginal tax variation ............................................................30 .....■ .................8.9 Time to pay taxes ..................................................................28 .....■ .............250.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................16 .....■ .................5.8 Quality of telephone infrastructure .......................................29 .....■ .................6.1 Internet users ..........................................................................7 .....■ ...............76.3 Broadband Internet subscribers ..............................................7 .....■ ...............30.5 Telephone lines .....................................................................12 .....■ ...............46.4 Mobile telephone subscribers...............................................30 .....■ ...............90.2
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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Korea, Rep. Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................43 .....■ ...............16.9 Cost of registering property ..................................................39 .....■ .................5.1 Cost of closing a business ......................................................5 .....■ .................4.0 Time to start a business ........................................................26 .....■ ...............17.0 Time to register property.......................................................10 .....■ ...............11.0 Time to close a business.......................................................16 .....■ .................1.5
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
162
Currency stability Change in real effective exchange rate.................................11 .....■ .................3.8 External vulnerability indicator...............................................18 .....■ ...............74.7 Current account balance to GDP...........................................30 .....■ ...............–0.7 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................19 .....■ ...............40.9 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................32 .....■ .................1.5 Financial strengths indicator..................................................32 .....■ .................5.0 Manageability of private debt................................................35 .....■ ...............86.3 Aggregate measure of real estate bubbles ..........................n/a .........................n/a
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................24 .....■ ...............16.0 Foreign currency sovereign rating.........................................26 .....■ ...............15.0 Aggregate macroprudential indicator ....................................20 .....■ .................5.2 Manageability of public debt .................................................13 .....■ ...............24.4 Credit default swap spreads .................................................29 .....■ .............196.9
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................19 .....■ .............107.6 Central bank assets to GDP ..................................................25 .....■ .................1.3 Financial system deposits to GDP ........................................23 .....■ ...............63.4 M2 to GDP ............................................................................30 .....■ ...............66.8 Private credit to GDP.............................................................16 .....■ .............100.9 Bank deposits to GDP ...........................................................23 .....■ ...............63.4 Money market instruments to GDP .....................................n/a .........................n/a
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................32 .....■ .................3.8 Bank overhead costs.............................................................12 .....■ .................1.7 Public ownership of banks ....................................................31 .....■ .................9.3 Bank operating costs to assets.............................................36 .....■ .................3.6 Non-performing bank loans to total loans ...............................9 .....■ .................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................11 .....■ ...............90.4 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................16 .....■ .................1.4 IPO proceeds amount ...........................................................29 .....■ .................0.3 Share of world IPOs ................................................................7 .....■ .................5.6
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Korea, Rep. Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................14 .....■ .................1.2 M&A transaction value to GDP .............................................24 .....■ .................4.0 Share of total number of M&A deals ....................................15 .....■ .................1.9
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ....................................................7 .....■ ......116,384.0 Insurance density ..................................................................19 .....■ ..........2,372.6 Real growth of direct insurance premiums...........................20 .....■ .................0.1 Insurance penetration..............................................................6 .....■ .................0.1 Relative value-added of insurance to GDP..............................6 .....■ .................2.6
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ...........................................................n/a .........................n/a Share of total number of securitization deals .......................20 .....■ .................0.4
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................11 .....■ .................1.4 Outright forward foreign exchange turnover ........................14 .....■ .................1.2 Foreign exchange swap turnover..........................................19 .....■ .................0.5
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................23 .....■ .................0.1 Interest rate derivatives turnover: Swaps .............................17 .....■ .................0.3 Interest rate derivatives turnover: Options ...........................18 .....■ .................0.2 Foreign exchange derivatives turnover: Currency swaps .......6 .....■ .................3.2 Foreign exchange derivatives turnover: Options ..................19 .....■ .................0.3
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio.....................................................5 .....■ .............200.5 Stock market capitalization to GDP.......................................25 .....■ .............101.5 Stock market value traded to GDP........................................11 .....■ .............203.5 Number of listed companies per 10,000 people...................12 .....■ .................0.4
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP..............6 .....■ ...............73.2 Public domestic bond market capitalization to GDP .............14 .....■ ...............47.7 Private international bonds to GDP .......................................23 .....■ ...............13.3 Public international bonds to GDP ........................................34 .....■ .................0.7
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
163 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................39 .....■ .................4.5 Venture capital availability .....................................................41 .....■ .................2.8 Ease of access to credit........................................................16 .....■ .................4.0 Financing through local equity market ..................................27 .....■ .................4.3 Ease of access to loans ........................................................44 .....■ .................2.8 Foreign direct investment to GDP ........................................55 .....■ .................0.0
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches...................................................31 .....■ ...............12.6 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices.........................18 .....■ .............673.7 MFI borrowers’ penetration rate ...........................................25 .....■ .................0.1
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Kuwait Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................3.4
US$ bn
3.9% 1.3%
GDP (US$ billions), 2008 .........................................................158.1 GDP (current prices) per capita, 2008 ............................45,920.3
26.9%
GDP (PPP) as share (%) of world total, 2008 ........................0.20 Average rate of real GDP growth (%), 2004–08....................6.97
■ ■ ■ ■
67.9%
Public debt securities .........10.9 Private debt securities..........3.6 Banking deposits .................74.4 Equity securities ................188.0 Total
276.9
Total/GDP: 247.7%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................30 3.6 1
2
3
4
5
6
7
Factors, policies, and institutions
164
1st pillar: Institutional environment .........................................36
3.9
Financial sector liberalization ....................................................35 Corporate governance.................................................................38 Legal and regulatory issues .......................................................37 Contract enforcement..................................................................36
3.8 4.3 3.5 4.2
2nd pillar: Business environment .............................................29
4.5
Human capital ...............................................................................48 Taxes...............................................................................................16 Infrastructure ................................................................................36 Cost of doing business ................................................................24
3.5 5.5 3.6 5.4
3rd pillar: Financial stability........................................................8
5.5
Currency stability..........................................................................18 Banking system stability................................................................6 Risk of sovereign debt crisis ......................................................11
4.6 5.8 5.9 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................28
3.8
Size index .......................................................................................33 Efficiency index...............................................................................8 Financial information disclosure................................................37
2.5 6.0 1.9
5th pillar: Non-banking financial services .............................54
1.1
IPO activity.....................................................................................51 M&A activity..................................................................................50 Insurance .......................................................................................52 Securitization.................................................................................47
1.0 1.1 1.1 1.3
6th pillar: Financial markets......................................................18
3.5
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................20 Bond market development ........................................................n/a
n/a n/a 3.5 n/a 1
Financial access 7th pillar: Financial access........................................................39
3.0
Commercial access......................................................................42 Retail access.................................................................................34
3.4 2.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Kuwait Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................32 .....■ .................1.2 Commitments to WTO agreement on trade in services.......38 .....■ ...............27.7 Domestic financial sector liberalization .................................39 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................27 .....■ .................4.5 Efficacy of corporate boards .................................................50 .....■ .................4.3 Reliance on professional management .................................52 .....■ .................3.9 Willingness to delegate.........................................................22 .....■ .................4.5 Strength of auditing and reporting standards........................38 .....■ .................4.8 Ethical behavior of firms........................................................32 .....■ .................4.2 Protection of minority shareholders’ interests......................44 .....■ .................4.2 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................46 .....■ .................2.6 Centralization of economic policymaking ..............................49 .....■ .................2.3 Regulation of securities exchanges ......................................51 .....■ .................4.0 Property rights.......................................................................28 .....■ .................5.1 Intellectual property protection .............................................30 .....■ .................4.0 Diversion of public funds.......................................................34 .....■ .................3.5 Public trust of politicians .......................................................23 .....■ .................3.5 Corruption perceptions index ................................................34 .....■ .................4.3 Strength of legal rights index ................................................39 .....■ .................4.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................37 .....■ .................3.2 Judicial independence ...........................................................27 .....■ .................4.6 Irregular payments in judicial decisions ................................35 .....■ .................4.1 Time to enforce a contract ....................................................34 .....■ .............566.0 Number of procedures to enforce a contract .......................54 .....■ ...............50.0 Strength of investor protection .............................................16 .....■ .................6.3 Cost of enforcing contracts.....................................................8 .....■ ...............13.3
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................50 .....■ .................3.6 Quality of math and science education.................................40 .....■ .................3.5 Extent of staff training...........................................................39 .....■ .................3.9 Local availability of specialized research and training services .............................................................48 .....■ .................3.8 Brain drain and ease of hiring foreign labor ..........................16 .....■ .................4.7 Tertiary enrollment ................................................................48 .....■ ...............17.6
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................35 .....■ .................4.0 Distortive effect on competition of taxes and subsidies ......23 .....■ .................4.3 Marginal tax variation ..............................................................4 .....■ ...............–3.7 Time to pay taxes ..................................................................12 .....■ .............118.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................28 .....■ .................4.7 Quality of telephone infrastructure .......................................48 .....■ .................5.4 Internet users ........................................................................30 .....■ ...............31.6 Broadband Internet subscribers ............................................47 .....■ .................0.9 Telephone lines .....................................................................38 .....■ ...............18.7 Mobile telephone subscribers...............................................29 .....■ ...............97.3
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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Kuwait Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................12 .....■ .................1.3 Cost of registering property ....................................................6 .....■ .................0.5 Cost of closing a business ......................................................1 .....■ .................1.0 Time to start a business ........................................................45 .....■ ...............35.0 Time to register property.......................................................43 .....■ ...............55.0 Time to close a business.......................................................46 .....■ .................4.2
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
166
Currency stability Change in real effective exchange rate.................................36 .....■ .................0.0 External vulnerability indicator...............................................30 .....■ .............148.0 Current account balance to GDP.............................................1 .....■ ...............44.7 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................14 .....■ ...............31.6 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................17 .....■ .................0.8 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt..................................................9 .....■ .................2.6 Aggregate measure of real estate bubbles ..........................n/a .........................n/a
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................21 .....■ ...............17.0 Foreign currency sovereign rating.........................................20 .....■ ...............17.0 Aggregate macroprudential indicator ....................................18 .....■ .................5.3 Manageability of public debt ...................................................3 .....■ .................7.5 Credit default swap spreads.................................................n/a .........................n/a
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................33 .....■ ...............61.1 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................31 .....■ ...............52.4 M2 to GDP ............................................................................40 .....■ ...............54.9 Private credit to GDP.............................................................31 .....■ ...............61.5 Bank deposits to GDP ...........................................................32 .....■ ...............52.4 Money market instruments to GDP .....................................n/a .........................n/a
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................4 .....■ .................6.0 Bank overhead costs.............................................................10 .....■ .................1.6 Public ownership of banks ....................................................33 .....■ ...............14.0 Bank operating costs to assets.............................................26 .....■ .................2.6 Non-performing bank loans to total loans .............................33 .....■ .................3.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................30 .....■ ...............31.2 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................51 .....■ .................0.0 IPO proceeds amount ...........................................................51 .....■ .................0.0 Share of world IPOs ..............................................................50 .....■ .................0.0
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Kuwait Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................47 .....■ .................0.1 M&A transaction value to GDP .............................................48 .....■ .................1.5 Share of total number of M&A deals ....................................47 .....■ .................0.1
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................51 .....■ .............701.0 Insurance density ..................................................................32 .....■ .............245.8 Real growth of direct insurance premiums ..........................n/a .........................n/a Insurance penetration............................................................53 .....■ .................0.0 Relative value-added of insurance to GDP............................49 .....■ .................0.2
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................43 .....■ .................0.9 Share of total number of securitization deals .......................49 .....■ .................0.1
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................29 .....■ ...............75.8 Stock market capitalization to GDP.......................................14 .....■ .............128.3 Stock market value traded to GDP........................................30 .....■ ...............54.7 Number of listed companies per 10,000 people.....................7 .....■ .................0.7
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
167 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................37 .....■ .................4.5 Venture capital availability .....................................................24 .....■ .................3.4 Ease of access to credit........................................................29 .....■ .................3.5 Financing through local equity market ..................................36 .....■ .................4.1 Ease of access to loans ........................................................19 .....■ .................3.8 Foreign direct investment to GDP ........................................54 .....■ .................0.1
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches...................................................26 .....■ ...............15.1 Total number of ATMs...........................................................24 .....■ ...............50.1 Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Malaysia Key indicators
Financial assets by major type, 2007 10.0%
Population (millions), 2008 .......................................................27.3
US$ bn
GDP (US$ billions), 2008 .........................................................222.2 GDP (current prices) per capita, 2008 ..............................8,140.7
18.6%
42.2%
GDP (PPP) as share (%) of world total, 2008 ........................0.56 Average rate of real GDP growth (%), 2004–08....................5.78
■ ■ ■ ■
Public debt securities .........77.6 Private debt securities......144.0 Banking deposits ...............225.1 Equity securities ................325.7 Total
772.4
29.1%
Total/GDP: 413.7%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................22 4.0 1
2
3
4
5
6
7
Factors, policies, and institutions
168
1st pillar: Institutional environment .........................................22
4.9
Financial sector liberalization ....................................................28 Corporate governance.................................................................18 Legal and regulatory issues .......................................................20 Contract enforcement..................................................................19
5.0 5.0 4.6 4.9
2nd pillar: Business environment .............................................30
4.5
Human capital ...............................................................................26 Taxes...............................................................................................28 Infrastructure ................................................................................29 Cost of doing business ................................................................39
4.4 4.8 4.1 4.7
3rd pillar: Financial stability......................................................13
5.1
Currency stability............................................................................8 Banking system stability..............................................................33 Risk of sovereign debt crisis ......................................................27
5.6 4.8 5.1 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................12
4.7
Size index .......................................................................................18 Efficiency index.............................................................................35 Financial information disclosure..................................................1
3.8 4.6 6.4
5th pillar: Non-banking financial services .............................25
2.4
IPO activity.....................................................................................25 M&A activity..................................................................................14 Insurance .......................................................................................40 Securitization.................................................................................26
2.0 3.7 1.9 2.2
6th pillar: Financial markets......................................................29
2.5
Foreign exchange markets .........................................................37 Derivatives markets .....................................................................34 Equity market development ........................................................23 Bond market development..........................................................15
1.1 1.1 3.2 3.6 1
Financial access 7th pillar: Financial access........................................................22
3.7
Commercial access......................................................................14 Retail access.................................................................................18
4.3 3.1 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Malaysia Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................38 .....■ ...............–0.1 Commitments to WTO agreement on trade in services.......25 .....■ ...............44.6 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................13 .....■ .................4.7 Efficacy of corporate boards .................................................19 .....■ .................5.1 Reliance on professional management .................................21 .....■ .................5.3 Willingness to delegate.........................................................17 .....■ .................4.6 Strength of auditing and reporting standards........................28 .....■ .................5.2 Ethical behavior of firms........................................................27 .....■ .................4.7 Protection of minority shareholders’ interests......................14 .....■ .................5.1 Official supervisory power ......................................................5 .....■ ...............13.0 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation ...........................................6 .....■ .................4.1 Centralization of economic policymaking ..............................16 .....■ .................3.8 Regulation of securities exchanges ......................................21 .....■ .................5.0 Property rights.......................................................................26 .....■ .................5.2 Intellectual property protection .............................................24 .....■ .................4.5 Diversion of public funds.......................................................26 .....■ .................4.1 Public trust of politicians .......................................................19 .....■ .................3.8 Corruption perceptions index ................................................26 .....■ .................5.1 Strength of legal rights index ..................................................1 .....■ ...............10.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................10 .....■ .................4.7 Judicial independence ...........................................................28 .....■ .................4.2 Irregular payments in judicial decisions ................................34 .....■ .................4.2 Time to enforce a contract ....................................................38 .....■ .............600.0 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Strength of investor protection ...............................................3 .....■ .................8.7 Cost of enforcing contracts...................................................37 .....■ ...............27.5
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................24 .....■ .................4.8 Quality of math and science education.................................19 .....■ .................4.8 Extent of staff training...........................................................14 .....■ .................4.9 Local availability of specialized research and training services .............................................................21 .....■ .................4.9 Brain drain and ease of hiring foreign labor ..........................23 .....■ .................4.4 Tertiary enrollment ................................................................42 .....■ ...............28.6
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................34 .....■ .................4.2 Distortive effect on competition of taxes and subsidies ......27 .....■ .................4.2 Marginal tax variation ............................................................32 .....■ .................9.2 Time to pay taxes ..................................................................17 .....■ .............145.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................19 .....■ .................5.4 Quality of telephone infrastructure .......................................36 .....■ .................5.9 Internet users ........................................................................19 .....■ ...............55.7 Broadband Internet subscribers ............................................35 .....■ .................3.8 Telephone lines .....................................................................42 .....■ ...............16.4 Mobile telephone subscribers...............................................33 .....■ ...............87.9
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
169
2: Country/Economy Profiles
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Malaysia Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................38 .....■ ...............14.7 Cost of registering property ..................................................21 .....■ .................2.5 Cost of closing a business ....................................................30 .....■ ...............15.0 Time to start a business ........................................................17 .....■ ...............13.0 Time to register property.......................................................52 .....■ .............144.0 Time to close a business.......................................................27 .....■ .................2.3
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
170
Currency stability Change in real effective exchange rate.................................46 .....■ ...............–2.0 External vulnerability indicator.................................................3 .....■ ...............21.1 Current account balance to GDP.............................................4 .....■ ...............17.4 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................12 .....■ ...............30.2 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................32 .....■ .................1.5 Financial strengths indicator..................................................32 .....■ .................5.0 Manageability of private debt................................................36 .....■ .............122.4 Aggregate measure of real estate bubbles.............................4 .....■ .................6.4
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................24 .....■ ...............16.0 Foreign currency sovereign rating.........................................30 .....■ ...............14.0 Aggregate macroprudential indicator ....................................21 .....■ .................5.2 Manageability of public debt .................................................28 .....■ ...............40.0 Credit default swap spreads .................................................19 .....■ .............117.8
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................20 .....■ .............106.8 Central bank assets to GDP ..................................................28 .....■ .................0.9 Financial system deposits to GDP ........................................10 .....■ .............109.8 M2 to GDP ............................................................................10 .....■ .............120.7 Private credit to GDP.............................................................17 .....■ .............100.7 Bank deposits to GDP ...........................................................10 .....■ .............109.8 Money market instruments to GDP......................................27 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................21 .....■ .................4.2 Bank overhead costs.............................................................13 .....■ .................1.7 Public ownership of banks ....................................................49 .....■ ...............50.3 Bank operating costs to assets.............................................18 .....■ .................1.8 Non-performing bank loans to total loans .............................42 .....■ .................5.1
4.13 4.14
Financial information disclosure Private credit bureau coverage.............................................n/a .........................n/a Public credit registry coverage ................................................3 .....■ ...............52.9
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................40 .....■ .................0.2 IPO proceeds amount ...........................................................32 .....■ .................0.3 Share of world IPOs ..............................................................13 .....■ .................2.5
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Malaysia Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................22 .....■ .................0.6 M&A transaction value to GDP ...............................................7 .....■ ...............10.6 Share of total number of M&A deals ....................................12 .....■ .................2.2
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................30 .....■ ..........8,512.0 Insurance density ..................................................................30 .....■ .............320.3 Real growth of direct insurance premiums...........................43 .....■ .................0.0 Insurance penetration............................................................25 .....■ .................0.0 Relative value-added of insurance to GDP............................24 .....■ .................1.1
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................16 .....■ .................2.9 Share of total number of securitization deals .......................29 .....■ .................0.2
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................33 .....■ .................0.1 Outright forward foreign exchange turnover ........................34 .....■ .................0.1 Foreign exchange swap turnover..........................................33 .....■ .................0.1
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................28 .....■ .................0.0 Interest rate derivatives turnover: Swaps .............................31 .....■ .................0.0 Interest rate derivatives turnover: Options ...........................29 .....■ .................0.0 Foreign exchange derivatives turnover: Currency swaps .....30 .....■ .................0.1 Foreign exchange derivatives turnover: Options ..................36 .....■ .................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................39 .....■ ...............53.2 Stock market capitalization to GDP.........................................6 .....■ .............156.0 Stock market value traded to GDP........................................24 .....■ ...............83.0 Number of listed companies per 10,000 people...................11 .....■ .................0.4
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP..............2 .....■ ...............98.0 Public domestic bond market capitalization to GDP .............21 .....■ ...............39.6 Private international bonds to GDP .......................................21 .....■ ...............24.2 Public international bonds to GDP ........................................25 .....■ .................3.1
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
171 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................26 .....■ .................5.4 Venture capital availability .....................................................10 .....■ .................3.9 Ease of access to credit..........................................................9 .....■ .................4.2 Financing through local equity market ..................................11 .....■ .................4.7 Ease of access to loans ........................................................10 .....■ .................4.3 Foreign direct investment to GDP ........................................26 .....■ .................4.5
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts .....................................7 .....■ ......222,673.9 Commercial bank branches...................................................34 .....■ ...............11.6 Total number of ATMs...........................................................27 .....■ ...............43.3 Total number of point of sale (POS) devices.........................10 .....■ ..........1,412.9 MFI borrowers’ penetration rate .............................................9 .....■ .................7.8
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Mexico Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .....................................................106.3
19.5%
GDP (US$ billions), 2008 ......................................................1,088.1 37.9%
GDP (current prices) per capita, 2008 ............................10,234.8 GDP (PPP) as share (%) of world total, 2008 ........................2.24
20.5%
Average rate of real GDP growth (%), 2004–08....................3.40
US$ bn
■ ■ ■ ■
Public debt securities .......204.2 Private debt securities......214.7 Banking deposits ...............232.4 Equity securities ................397.7 Total
1,049.0
22.2%
Total/GDP: 102.3%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................43 3.1 1
2
3
4
5
6
7
Factors, policies, and institutions
172
1st pillar: Institutional environment .........................................44
3.6
Financial sector liberalization ....................................................44 Corporate governance.................................................................39 Legal and regulatory issues .......................................................46 Contract enforcement..................................................................41
3.0 4.3 3.1 3.9
2nd pillar: Business environment .............................................43
3.9
Human capital ...............................................................................49 Taxes...............................................................................................42 Infrastructure ................................................................................42 Cost of doing business ................................................................37
3.5 4.1 3.2 4.8
3rd pillar: Financial stability......................................................14
5.1
Currency stability..........................................................................13 Banking system stability..............................................................22 Risk of sovereign debt crisis ......................................................31
5.2 5.3 4.8 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................54
2.4
Size index .......................................................................................51 Efficiency index.............................................................................49 Financial information disclosure................................................23
1.1 3.3 3.1
5th pillar: Non-banking financial services .............................35
2.0
IPO activity.....................................................................................39 M&A activity..................................................................................27 Insurance .......................................................................................37 Securitization.................................................................................24
1.6 1.8 2.2 2.5
6th pillar: Financial markets......................................................48
1.5
Foreign exchange markets .........................................................23 Derivatives markets .....................................................................29 Equity market development ........................................................48 Bond market development..........................................................36
1.3 1.5 1.4 1.6 1
Financial access 7th pillar: Financial access........................................................43
2.9
Commercial access......................................................................49 Retail access.................................................................................23
3.1 2.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Mexico Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................37 .....■ .................1.2 Commitments to WTO agreement on trade in services.......46 .....■ ...............16.7 Domestic financial sector liberalization .................................33 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................46 .....■ .................4.0 Efficacy of corporate boards .................................................49 .....■ .................4.3 Reliance on professional management .................................47 .....■ .................4.1 Willingness to delegate.........................................................45 .....■ .................3.6 Strength of auditing and reporting standards........................40 .....■ .................4.7 Ethical behavior of firms........................................................45 .....■ .................3.6 Protection of minority shareholders’ interests......................40 .....■ .................4.3 Official supervisory power ....................................................18 .....■ ...............11.5 Private monitoring of the banking industry .............................2 .....■ .................8.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................47 .....■ .................2.6 Centralization of economic policymaking ..............................30 .....■ .................3.1 Regulation of securities exchanges ......................................36 .....■ .................4.5 Property rights.......................................................................44 .....■ .................4.0 Intellectual property protection .............................................42 .....■ .................3.2 Diversion of public funds.......................................................47 .....■ .................2.9 Public trust of politicians .......................................................42 .....■ .................2.1 Corruption perceptions index ................................................36 .....■ .................3.6 Strength of legal rights index ................................................39 .....■ .................4.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................45 .....■ .................2.6 Judicial independence ...........................................................45 .....■ .................3.2 Irregular payments in judicial decisions ................................40 .....■ .................3.6 Time to enforce a contract ....................................................20 .....■ .............415.0 Number of procedures to enforce a contract .......................38 .....■ ...............38.0 Strength of investor protection .............................................21 .....■ .................6.0 Cost of enforcing contracts...................................................44 .....■ ...............32.0
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................31 .....■ .................4.4 Quality of math and science education.................................53 .....■ .................2.6 Extent of staff training...........................................................41 .....■ .................3.8 Local availability of specialized research and training services .............................................................37 .....■ .................4.2 Brain drain and ease of hiring foreign labor ..........................42 .....■ .................3.7 Tertiary enrollment ................................................................44 .....■ ...............26.1
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................40 .....■ .................3.6 Distortive effect on competition of taxes and subsidies ......44 .....■ .................3.8 Marginal tax variation ............................................................22 .....■ .................4.8 Time to pay taxes ..................................................................47 .....■ .............549.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................39 .....■ .................3.8 Quality of telephone infrastructure .......................................37 .....■ .................5.9 Internet users ........................................................................37 .....■ ...............22.4 Broadband Internet subscribers ............................................34 .....■ .................4.3 Telephone lines .....................................................................39 .....■ ...............18.5 Mobile telephone subscribers...............................................44 .....■ ...............62.5
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
173
2: Country/Economy Profiles
Part 1.r3
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Mexico Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................34 .....■ ...............12.5 Cost of registering property ..................................................35 .....■ .................4.8 Cost of closing a business ....................................................37 .....■ ...............18.0 Time to start a business ........................................................36 .....■ ...............28.0 Time to register property.......................................................46 .....■ ...............74.0 Time to close a business.......................................................20 .....■ .................1.8
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
174
Currency stability Change in real effective exchange rate.................................35 .....■ .................0.0 External vulnerability indicator...............................................13 .....■ ...............45.0 Current account balance to GDP...........................................31 .....■ ...............–1.4 Dollarization vulnerability indicator ........................................25 .....■ .................3.2 External debt to GDP (developing economies) .......................4 .....■ ...............21.6 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................41 .....■ .................2.0 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt................................................24 .....■ ...............20.5 Aggregate measure of real estate bubbles...........................14 .....■ .................5.6
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................30 .....■ ...............15.8 Foreign currency sovereign rating.........................................32 .....■ ...............12.8 Aggregate macroprudential indicator ....................................11 .....■ .................5.4 Manageability of public debt .................................................22 .....■ ...............35.8 Credit default swap spreads .................................................32 .....■ .............228.2
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................48 .....■ ...............29.7 Central bank assets to GDP ..................................................31 .....■ .................0.7 Financial system deposits to GDP ........................................49 .....■ ...............21.1 M2 to GDP ............................................................................54 .....■ ...............26.9 Private credit to GDP.............................................................48 .....■ ...............20.0 Bank deposits to GDP ...........................................................51 .....■ ...............21.1 Money market instruments to GDP......................................25 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................55 .....■ .................1.0 Bank overhead costs.............................................................55 .....■ ...............12.1 Public ownership of banks ....................................................22 .....■ .................6.5 Bank operating costs to assets.............................................49 .....■ .................6.1 Non-performing bank loans to total loans .............................22 .....■ .................2.5
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................15 .....■ ...............70.8 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................19 .....■ .................0.9 IPO proceeds amount ...........................................................41 .....■ .................0.2 Share of world IPOs ..............................................................34 .....■ .................0.3
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Mexico Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................20 .....■ .................0.8 M&A transaction value to GDP .............................................37 .....■ .................2.6 Share of total number of M&A deals ....................................30 .....■ .................0.4
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................26 .....■ ........17,856.0 Insurance density ..................................................................36 .....■ .............167.6 Real growth of direct insurance premiums...........................17 .....■ .................0.1 Insurance penetration............................................................41 .....■ .................0.0 Relative value-added of insurance to GDP............................31 .....■ .................0.8
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................40 .....■ .................1.0 Share of total number of securitization deals .......................13 .....■ .................1.1
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................22 .....■ .................0.4 Outright forward foreign exchange turnover ........................32 .....■ .................0.1 Foreign exchange swap turnover..........................................21 .....■ .................0.5
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................24 .....■ .................0.1 Interest rate derivatives turnover: Swaps .............................20 .....■ .................0.2 Interest rate derivatives turnover: Options ...........................21 .....■ .................0.1 Foreign exchange derivatives turnover: Currency swaps .....34 .....■ .................0.0 Foreign exchange derivatives turnover: Options ..................26 .....■ .................0.1
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................44 .....■ ...............30.8 Stock market capitalization to GDP.......................................42 .....■ ...............42.0 Stock market value traded to GDP........................................44 .....■ ...............12.9 Number of listed companies per 10,000 people...................47 .....■ .................0.0
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............20 .....■ ...............15.4 Public domestic bond market capitalization to GDP .............30 .....■ ...............19.6 Private international bonds to GDP .......................................31 .....■ .................5.1 Public international bonds to GDP ........................................22 .....■ .................4.0
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
175 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................36 .....■ .................4.6 Venture capital availability .....................................................50 .....■ .................2.4 Ease of access to credit........................................................32 .....■ .................3.4 Financing through local equity market ..................................48 .....■ .................3.3 Ease of access to loans ........................................................45 .....■ .................2.7 Foreign direct investment to GDP ........................................41 .....■ .................2.4
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................19 .....■ ......101,362.8 Commercial bank branches...................................................28 .....■ ...............14.0 Total number of ATMs...........................................................30 .....■ ...............40.1 Total number of point of sale (POS) devices.........................35 .....■ .................1.8 MFI borrowers’ penetration rate .............................................3 .....■ ...............21.0
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Netherlands Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................16.7
8.6%
GDP (US$ billions), 2008 .........................................................868.9
US$ bn
23.6%
■ ■ ■ ■
GDP (current prices) per capita, 2008 ............................52,019.0 GDP (PPP) as share (%) of world total, 2008 ........................0.98 Average rate of real GDP growth (%), 2004–08....................2.63
Public debt securities .......348.4 Private debt securities...1,694.7 Banking deposits ............1,048.3 Equity securities ................956.5
41.9%
Total
4,047.9
25.9%
Total/GDP: 520.8%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index........................................................8 4.8 1
2
3
4
5
6
7
Factors, policies, and institutions
176
1st pillar: Institutional environment ...........................................5
5.8
Financial sector liberalization ......................................................1 Corporate governance...................................................................4 Legal and regulatory issues .........................................................9 Contract enforcement..................................................................13
7.0 5.6 5.2 5.4
2nd pillar: Business environment ...............................................8
5.8
Human capital .................................................................................8 Taxes...............................................................................................13 Infrastructure ..................................................................................5 Cost of doing business ..................................................................9
5.3 5.6 6.2 6.1
3rd pillar: Financial stability......................................................21
4.9
Currency stability..........................................................................25 Banking system stability..............................................................41 Risk of sovereign debt crisis ........................................................7
4.3 4.5 6.0 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services........................................7
4.9
Size index .........................................................................................3 Efficiency index.............................................................................31 Financial information disclosure................................................19
5.6 4.9 3.4
5th pillar: Non-banking financial services ...............................5
4.1
IPO activity.....................................................................................24 M&A activity....................................................................................5 Insurance .........................................................................................7 Securitization...................................................................................5
2.1 5.1 4.5 4.7
6th pillar: Financial markets......................................................10
4.2
Foreign exchange markets .........................................................18 Derivatives markets .....................................................................16 Equity market development ..........................................................5 Bond market development............................................................3
1.7 4.0 5.3 5.0 1
Financial access 7th pillar: Financial access........................................................14
4.2
Commercial access........................................................................4 Retail access.................................................................................11
4.8 3.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:22 PM
Page 177
Netherlands Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.........1 .....■ ...............74.6 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................23 .....■ .................4.6 Efficacy of corporate boards ...................................................9 .....■ .................5.4 Reliance on professional management ...................................5 .....■ .................6.1 Willingness to delegate...........................................................3 .....■ .................5.8 Strength of auditing and reporting standards........................10 .....■ .................5.9 Ethical behavior of firms..........................................................6 .....■ .................6.4 Protection of minority shareholders’ interests......................13 .....■ .................5.2 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry .............................2 .....■ .................8.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................33 .....■ .................2.9 Centralization of economic policymaking ..............................14 .....■ .................3.9 Regulation of securities exchanges ......................................11 .....■ .................5.5 Property rights.......................................................................12 .....■ .................6.1 Intellectual property protection ...............................................7 .....■ .................5.8 Diversion of public funds.........................................................8 .....■ .................5.9 Public trust of politicians .........................................................8 .....■ .................5.3 Corruption perceptions index ..................................................6 .....■ .................8.9 Strength of legal rights index ................................................29 .....■ .................6.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................13 .....■ .................4.7 Judicial independence .............................................................7 .....■ .................6.4 Irregular payments in judicial decisions ..................................7 .....■ .................6.1 Time to enforce a contract ....................................................30 .....■ .............514.0 Number of procedures to enforce a contract .........................4 .....■ ...............25.0 Strength of investor protection .............................................43 .....■ .................4.7 Cost of enforcing contracts...................................................29 .....■ ...............24.4
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................9 .....■ .................5.5 Quality of math and science education.................................10 .....■ .................5.2 Extent of staff training.............................................................9 .....■ .................5.2 Local availability of specialized research and training services ...............................................................4 .....■ .................6.0 Brain drain and ease of hiring foreign labor ..........................10 .....■ .................4.9 Tertiary enrollment ................................................................17 .....■ ...............59.8
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................7 .....■ .................6.0 Distortive effect on competition of taxes and subsidies ......12 .....■ .................4.8 Marginal tax variation ............................................................21 .....■ .................3.7 Time to pay taxes ..................................................................20 .....■ .............180.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................15 .....■ .................5.8 Quality of telephone infrastructure .......................................14 .....■ .................6.7 Internet users ..........................................................................2 .....■ ...............84.0 Broadband Internet subscribers ..............................................3 .....■ ...............33.5 Telephone lines .....................................................................14 .....■ ...............44.7 Mobile telephone subscribers...............................................13 .....■ .............117.5
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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Netherlands Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................25 .....■ .................5.9 Cost of registering property ..................................................42 .....■ .................6.1 Cost of closing a business ......................................................5 .....■ .................4.0 Time to start a business ........................................................12 .....■ ...............10.0 Time to register property.........................................................5 .....■ .................5.0 Time to close a business.......................................................11 .....■ .................1.1
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
178
Currency stability Change in real effective exchange rate.................................23 .....■ .................1.7 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................17 .....■ .................4.4 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................11 .....■ ...............–0.5
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................41 .....■ .................2.0 Financial strengths indicator..................................................10 .....■ .................8.0 Manageability of private debt................................................42 .....■ .............230.4 Aggregate measure of real estate bubbles...........................11 .....■ .................6.0
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ....................................10 .....■ .................5.5 Manageability of public debt .................................................43 .....■ ...............58.1 Credit default swap spreads ...................................................8 .....■ ...............57.8
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .......................................2 .....■ .............188.9 Central bank assets to GDP ..................................................42 .....■ .................0.1 Financial system deposits to GDP ..........................................7 .....■ .............115.9 M2 to GDP ..............................................................................7 .....■ .............132.6 Private credit to GDP...............................................................4 .....■ .............179.1 Bank deposits to GDP .............................................................8 .....■ .............115.9 Money market instruments to GDP........................................3 .....■ ...............10.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................5 .....■ .................5.7 Bank overhead costs.............................................................50 .....■ .................5.7 Public ownership of banks ....................................................45 .....■ ...............38.6 Bank operating costs to assets.............................................10 .....■ .................1.2 Non-performing bank loans to total loans ............................n/a .........................n/a
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................12 .....■ ...............81.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................17 .....■ .................1.4 IPO proceeds amount ...........................................................24 .....■ .................0.4 Share of world IPOs ..............................................................23 .....■ .................0.7
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Netherlands Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share..................................................................6 .....■ .................3.5 M&A transaction value to GDP ...............................................3 .....■ ...............14.4 Share of total number of M&A deals ....................................16 .....■ .................1.7
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ....................................................8 .....■ ......102,831.0 Insurance density ....................................................................3 .....■ ..........6,262.9 Real growth of direct insurance premiums...........................41 .....■ .................0.0 Insurance penetration..............................................................3 .....■ .................0.1 Relative value-added of insurance to GDP............................13 .....■ .................1.8
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ..............................................................5 .....■ .................8.2 Share of total number of securitization deals .......................18 .....■ .................0.7
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................27 .....■ .................0.2 Outright forward foreign exchange turnover ........................13 .....■ .................1.3 Foreign exchange swap turnover..........................................17 .....■ .................0.7
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................17 .....■ .................0.3 Interest rate derivatives turnover: Swaps ...............................8 .....■ .................1.6 Interest rate derivatives turnover: Options ...........................16 .....■ .................0.2 Foreign exchange derivatives turnover: Currency swaps .....13 .....■ .................1.0 Foreign exchange derivatives turnover: Options ..................18 .....■ .................0.3
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio.....................................................4 .....■ .............206.5 Stock market capitalization to GDP.......................................19 .....■ .............115.8 Stock market value traded to GDP..........................................5 .....■ .............239.1 Number of listed companies per 10,000 people..................n/a .........................n/a
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP..............5 .....■ ...............80.2 Public domestic bond market capitalization to GDP ...............8 .....■ ...............52.3 Private international bonds to GDP .........................................3 .....■ .............151.1 Public international bonds to GDP ........................................28 .....■ .................2.4
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
179 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication ...............................................8 .....■ .................6.2 Venture capital availability .......................................................7 .....■ .................4.1 Ease of access to credit........................................................50 .....■ .................2.7 Financing through local equity market ..................................32 .....■ .................4.2 Ease of access to loans ........................................................12 .....■ .................4.2 Foreign direct investment to GDP ..........................................3 .....■ ...............12.8
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................11 .....■ ......177,209.4 Commercial bank branches...................................................10 .....■ ...............26.1 Total number of ATMs...........................................................17 .....■ ...............63.8 Total number of point of sale (POS) devices.........................15 .....■ ..........1,030.4 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Nigeria Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .....................................................147.8
US$ bn
13.6%
0.3%
GDP (US$ billions), 2008 .........................................................214.4 GDP (current prices) per capita, 2008 ..............................1,450.5 GDP (PPP) as share (%) of world total, 2008 ........................0.46 57.0%
Average rate of real GDP growth (%), 2004–08....................6.78
29.1%
■ ■ ■ ■
Public debt securities .........20.5 Private debt securities..........0.5 Banking deposits .................44.1 Equity securities ..................86.3 Total
151.5
Total/GDP: 90.5%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................52 2.7 1
2
3
4
5
6
7
Factors, policies, and institutions
180
1st pillar: Institutional environment .........................................39
3.8
Financial sector liberalization ....................................................31 Corporate governance.................................................................47 Legal and regulatory issues .......................................................42 Contract enforcement..................................................................40
4.2 4.0 3.2 3.9
2nd pillar: Business environment .............................................53
2.9
Human capital ...............................................................................52 Taxes...............................................................................................48 Infrastructure ................................................................................54 Cost of doing business ................................................................53
3.4 3.2 2.0 3.2
3rd pillar: Financial stability......................................................29
4.7
Currency stability........................................................................n/a Banking system stability................................................................4 Risk of sovereign debt crisis ......................................................48
n/a 6.3 2.7 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................50
2.5
Size index .......................................................................................50 Efficiency index.............................................................................39 Financial information disclosure................................................54
1.2 4.4 1.0
5th pillar: Non-banking financial services .............................52
1.3
IPO activity.....................................................................................41 M&A activity..................................................................................48 Insurance .......................................................................................53 Securitization.................................................................................45
1.6 1.2 1.0 1.3
6th pillar: Financial markets......................................................53
1.3
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................50 Bond market development ........................................................n/a
n/a n/a 1.3 n/a 1
Financial access 7th pillar: Financial access........................................................53
2.5
Commercial access......................................................................35 Retail access.................................................................................48
3.6 1.3 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Nigeria Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................41 .....■ ...............–0.5 Commitments to WTO agreement on trade in services.......30 .....■ ...............51.1 Domestic financial sector liberalization .................................23 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................51 .....■ .................3.6 Efficacy of corporate boards .................................................42 .....■ .................4.5 Reliance on professional management .................................37 .....■ .................4.5 Willingness to delegate.........................................................36 .....■ .................4.0 Strength of auditing and reporting standards........................49 .....■ .................3.9 Ethical behavior of firms........................................................49 .....■ .................3.5 Protection of minority shareholders’ interests......................38 .....■ .................4.4 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................27 .....■ .................3.1 Centralization of economic policymaking ..............................34 .....■ .................2.9 Regulation of securities exchanges ......................................30 .....■ .................4.6 Property rights.......................................................................47 .....■ .................3.9 Intellectual property protection .............................................43 .....■ .................3.1 Diversion of public funds.......................................................51 .....■ .................2.3 Public trust of politicians .......................................................53 .....■ .................1.6 Corruption perceptions index ................................................46 .....■ .................2.7 Strength of legal rights index ................................................11 .....■ .................8.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................34 .....■ .................3.4 Judicial independence ...........................................................33 .....■ .................4.1 Irregular payments in judicial decisions ................................49 .....■ .................2.8 Time to enforce a contract ....................................................23 .....■ .............457.0 Number of procedures to enforce a contract .......................41 .....■ ...............39.0 Strength of investor protection .............................................25 .....■ .................5.7 Cost of enforcing contracts...................................................44 .....■ ...............32.0
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................38 .....■ .................4.1 Quality of math and science education.................................43 .....■ .................3.4 Extent of staff training...........................................................46 .....■ .................3.6 Local availability of specialized research and training services .............................................................43 .....■ .................3.9 Brain drain and ease of hiring foreign labor ..........................32 .....■ .................4.1 Tertiary enrollment ................................................................52 .....■ ...............10.2
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................50 .....■ .................2.8 Distortive effect on competition of taxes and subsidies ......20 .....■ .................4.5 Marginal tax variation ............................................................29 .....■ .................8.2 Time to pay taxes ..................................................................53 .....■ .............938.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................55 .....■ .................2.4 Quality of telephone infrastructure .......................................42 .....■ .................5.6 Internet users ........................................................................52 .....■ .................6.8 Broadband Internet subscribers ............................................54 .....■ .................0.0 Telephone lines .....................................................................54 .....■ .................1.1 Mobile telephone subscribers...............................................52 .....■ ...............27.3
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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Nigeria Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................55 .....■ ...............90.1 Cost of registering property ..................................................55 .....■ ...............21.9 Cost of closing a business ....................................................45 .....■ ...............22.0 Time to start a business ........................................................40 .....■ ...............31.0 Time to register property.......................................................47 .....■ ...............82.0 Time to close a business.......................................................23 .....■ .................2.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
182
Currency stability Change in real effective exchange rate................................n/a .........................n/a External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................16 .....■ .................4.5 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................23 .....■ .................1.3 Financial strengths indicator.................................................n/a .........................n/a Manageability of private debt..................................................1 .....■ .................0.3 Aggregate measure of real estate bubbles ..........................n/a .........................n/a
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................49 .....■ .................8.2 Foreign currency sovereign rating.........................................50 .....■ .................7.5 Aggregate macroprudential indicator ....................................54 .....■ .................2.9 Manageability of public debt ...................................................8 .....■ ...............14.7 Credit default swap spreads.................................................n/a .........................n/a
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................49 .....■ ...............23.9 Central bank assets to GDP ..................................................20 .....■ .................1.9 Financial system deposits to GDP ........................................52 .....■ ...............16.6 M2 to GDP ............................................................................50 .....■ ...............37.3 Private credit to GDP.............................................................51 .....■ ...............17.3 Bank deposits to GDP ...........................................................54 .....■ ...............16.6 Money market instruments to GDP .....................................n/a .........................n/a
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................15 .....■ .................4.5 Bank overhead costs.............................................................44 .....■ .................4.4 Public ownership of banks ......................................................1 .....■ .................0.0 Bank operating costs to assets.............................................46 .....■ .................5.6 Non-performing bank loans to total loans .............................44 .....■ .................6.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................46 .....■ .................0.0 Public credit registry coverage ..............................................23 .....■ .................0.1
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................37 .....■ .................0.3 IPO proceeds amount ...........................................................28 .....■ .................0.3 Share of world IPOs ..............................................................41 .....■ .................0.2
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Nigeria Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................44 .....■ .................0.1 M&A transaction value to GDP .............................................45 .....■ .................1.7 Share of total number of M&A deals ....................................46 .....■ .................0.1
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................50 .....■ .............814.0 Insurance density ..................................................................52 .....■ .................5.5 Real growth of direct insurance premiums ..........................n/a .........................n/a Insurance penetration............................................................51 .....■ .................0.0 Relative value-added of insurance to GDP ...........................n/a .........................n/a
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................45 .....■ .................0.9 Share of total number of securitization deals .......................43 .....■ .................0.1
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................45 .....■ ...............28.2 Stock market capitalization to GDP.......................................47 .....■ ...............35.9 Stock market value traded to GDP........................................45 .....■ ...............10.1 Number of listed companies per 10,000 people...................45 .....■ .................0.0
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
183 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................45 .....■ .................4.1 Venture capital availability .....................................................49 .....■ .................2.4 Ease of access to credit........................................................24 .....■ .................3.6 Financing through local equity market ..................................16 .....■ .................4.6 Ease of access to loans ........................................................54 .....■ .................2.1 Foreign direct investment to GDP ........................................17 .....■ .................7.4
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................35 .....■ ........18,500.0 Commercial bank branches ..................................................n/a .........................n/a Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ...........................................15 .....■ .................3.0
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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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%
GDP (current prices) per capita, 2008 ............................95,061.8 GDP (PPP) as share (%) of world total, 2008 ........................0.38 Average rate of real GDP growth (%), 2004–08....................2.81 24.4%
Public debt securities .......225.0 Private debt securities......242.8 Banking deposits ...............170.6 Equity securities ................357.4 Total
995.9
17.1%
Total/GDP: 255.7%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................17 4.4 1
2
3
4
5
6
7
Factors, policies, and institutions
184
1st pillar: Institutional environment ...........................................3
5.9
Financial sector liberalization ....................................................14 Corporate governance...................................................................2 Legal and regulatory issues .........................................................8 Contract enforcement....................................................................4
6.7 5.7 5.2 5.9
2nd pillar: Business environment ...............................................3
6.0
Human capital ...............................................................................10 Taxes.................................................................................................7 Infrastructure ..................................................................................8 Cost of doing business ..................................................................3
5.3 5.9 6.0 6.7
3rd pillar: Financial stability........................................................1
5.7
Currency stability............................................................................5 Banking system stability..............................................................18 Risk of sovereign debt crisis ........................................................9
5.9 5.5 6.0 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................16
4.3
Size index .......................................................................................30 Efficiency index...............................................................................9 Financial information disclosure..................................................3
2.9 6.0 4.0
5th pillar: Non-banking financial services .............................29
2.3
IPO activity.....................................................................................28 M&A activity..................................................................................17 Insurance .......................................................................................27 Securitization.................................................................................38
2.0 2.8 2.6 1.7
6th pillar: Financial markets......................................................27
2.7
Foreign exchange markets .........................................................19 Derivatives markets .....................................................................21 Equity market development ........................................................16 Bond market development..........................................................26
1.7 2.5 3.7 2.6 1
Financial access 7th pillar: Financial access........................................................23
3.7
Commercial access......................................................................26 Retail access.................................................................................12
3.9 3.5 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Norway Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.......17 .....■ ...............60.1 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................39 .....■ .................4.3 Efficacy of corporate boards ...................................................6 .....■ .................5.6 Reliance on professional management ...................................2 .....■ .................6.2 Willingness to delegate...........................................................4 .....■ .................5.7 Strength of auditing and reporting standards..........................4 .....■ .................6.1 Ethical behavior of firms..........................................................7 .....■ .................6.3 Protection of minority shareholders’ interests........................3 .....■ .................5.8 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................19 .....■ .................3.5 Centralization of economic policymaking ..............................31 .....■ .................3.1 Regulation of securities exchanges ........................................7 .....■ .................5.7 Property rights.........................................................................9 .....■ .................6.3 Intellectual property protection .............................................11 .....■ .................5.7 Diversion of public funds.........................................................6 .....■ .................6.0 Public trust of politicians .........................................................5 .....■ .................5.7 Corruption perceptions index ................................................11 .....■ .................7.9 Strength of legal rights index ................................................18 .....■ .................7.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .......................................5 .....■ .................5.4 Judicial independence ...........................................................10 .....■ .................6.2 Irregular payments in judicial decisions ..................................5 .....■ .................6.2 Time to enforce a contract ......................................................9 .....■ .............310.0 Number of procedures to enforce a contract .......................23 .....■ ...............33.0 Strength of investor protection .............................................13 .....■ .................6.7 Cost of enforcing contracts.....................................................2 .....■ .................9.9
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................17 .....■ .................5.2 Quality of math and science education.................................33 .....■ .................4.2 Extent of staff training.............................................................6 .....■ .................5.4 Local availability of specialized research and training services .............................................................15 .....■ .................5.4 Brain drain and ease of hiring foreign labor ............................8 .....■ .................5.0 Tertiary enrollment ..................................................................6 .....■ ...............77.5
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................5 .....■ .................6.2 Distortive effect on competition of taxes and subsidies ........8 .....■ .................5.1 Marginal tax variation ............................................................20 .....■ .................3.6 Time to pay taxes ....................................................................8 .....■ ...............87.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................22 .....■ .................5.2 Quality of telephone infrastructure .........................................2 .....■ .................6.9 Internet users ..........................................................................1 .....■ ...............85.0 Broadband Internet subscribers ..............................................5 .....■ ...............30.6 Telephone lines .....................................................................18 .....■ ...............42.4 Mobile telephone subscribers...............................................21 .....■ .............110.5
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
185
2: Country/Economy Profiles
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Norway Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................14 .....■ .................2.1 Cost of registering property ..................................................21 .....■ .................2.5 Cost of closing a business ......................................................1 .....■ .................1.0 Time to start a business ........................................................12 .....■ ...............10.0 Time to register property.........................................................4 .....■ .................3.0 Time to close a business.........................................................5 .....■ .................0.9
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
186
Currency stability Change in real effective exchange rate.................................18 .....■ .................3.1 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP.............................................3 .....■ ...............18.4 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................4 .....■ ...............64.8
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................23 .....■ .................1.3 Financial strengths indicator..................................................10 .....■ .................8.0 Manageability of private debt................................................34 .....■ ...............85.1 Aggregate measure of real estate bubbles ..........................n/a .........................n/a
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ....................................22 .....■ .................5.2 Manageability of public debt .................................................40 .....■ ...............55.7 Credit default swap spreads ...................................................1 .....■ ...............32.5
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................25 .....■ ...............83.3 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................33 .....■ ...............50.6 M2 to GDP ............................................................................35 .....■ ...............58.9 Private credit to GDP.............................................................15 .....■ .............102.0 Bank deposits to GDP ...........................................................33 .....■ ...............50.6 Money market instruments to GDP......................................11 .....■ .................3.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................38 .....■ .................3.7 Bank overhead costs...............................................................4 .....■ .................1.2 Public ownership of banks ....................................................27 .....■ .................8.2 Bank operating costs to assets...............................................7 .....■ .................1.1 Non-performing bank loans to total loans ...............................4 .....■ .................0.8
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....■ .............100.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................26 .....■ .................0.7 IPO proceeds amount ...........................................................23 .....■ .................0.4 Share of world IPOs ..............................................................19 .....■ .................1.1
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Norway Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................19 .....■ .................0.9 M&A transaction value to GDP .............................................11 .....■ .................7.4 Share of total number of M&A deals ....................................21 .....■ .................0.9
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................25 .....■ ........19,451.0 Insurance density ..................................................................10 .....■ ..........3,768.5 Real growth of direct insurance premiums...........................26 .....■ .................0.1 Insurance penetration............................................................24 .....■ .................0.0 Relative value-added of insurance to GDP............................47 .....■ .................0.4
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................31 .....■ .................1.8 Share of total number of securitization deals .......................36 .....■ .................0.2
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................25 .....■ .................0.3 Outright forward foreign exchange turnover ........................17 .....■ .................0.6 Foreign exchange swap turnover..........................................14 .....■ .................1.2
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements .............................................................................8 .....■ .................1.6 Interest rate derivatives turnover: Swaps .............................25 .....■ .................0.1 Interest rate derivatives turnover: Options ...........................25 .....■ .................0.0 Foreign exchange derivatives turnover: Currency swaps .....26 .....■ .................0.1 Foreign exchange derivatives turnover: Options ..................29 .....■ .................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................13 .....■ .............147.0 Stock market capitalization to GDP.......................................29 .....■ ...............84.1 Stock market value traded to GDP........................................18 .....■ .............123.5 Number of listed companies per 10,000 people..................n/a .........................n/a
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............11 .....■ ...............31.0 Public domestic bond market capitalization to GDP .............31 .....■ ...............18.7 Private international bonds to GDP .......................................14 .....■ ...............54.0 Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
187 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................15 .....■ .................6.0 Venture capital availability .......................................................2 .....■ .................4.4 Ease of access to credit........................................................39 .....■ .................3.0 Financing through local equity market ..................................19 .....■ .................4.6 Ease of access to loans ..........................................................4 .....■ .................4.6 Foreign direct investment to GDP ........................................53 .....■ .................0.2
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................14 .....■ ......161,080.0 Commercial bank branches.....................................................6 .....■ ...............35.0 Total number of ATMs...........................................................18 .....■ ...............59.7 Total number of point of sale (POS) devices.........................27 .....■ .............216.6 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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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%
GDP (current prices) per capita, 2008 ..............................1,044.5 GDP (PPP) as share (%) of world total, 2008 ........................0.64 Average rate of real GDP growth (%), 2004–08....................6.64
■ ■ ■ ■
0.3%
Public debt securities .........73.7 Private debt securities..........0.6 Banking deposits .................54.6 Equity securities ..................70.3 Total
199.2
27.4%
Total/GDP: 138.3%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................49 2.9 1
2
3
4
5
6
7
Factors, policies, and institutions
188
1st pillar: Institutional environment .........................................52
3.0
Financial sector liberalization ....................................................52 Corporate governance.................................................................48 Legal and regulatory issues .......................................................44 Contract enforcement..................................................................51
1.9 3.9 3.2 3.2
2nd pillar: Business environment .............................................50
3.4
Human capital ...............................................................................54 Taxes...............................................................................................51 Infrastructure ................................................................................52 Cost of doing business ................................................................28
3.1 3.1 2.3 5.2
3rd pillar: Financial stability......................................................48
4.1
Currency stability..........................................................................21 Banking system stability..............................................................29 Risk of sovereign debt crisis ......................................................54
4.6 5.0 2.4 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................46
2.6
Size index .......................................................................................38 Efficiency index.............................................................................46 Financial information disclosure................................................47
2.1 3.8 1.3
5th pillar: Non-banking financial services .............................51
1.4
IPO activity.....................................................................................37 M&A activity..................................................................................49 Insurance .......................................................................................47 Securitization.................................................................................51
1.6 1.1 1.7 1.2
6th pillar: Financial markets......................................................25
2.7
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................27 Bond market development ........................................................n/a
n/a n/a 2.7 n/a 1
Financial access 7th pillar: Financial access........................................................50
2.7
Commercial access......................................................................40 Retail access.................................................................................42
3.4 1.9 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Pakistan Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–1.1 Commitments to WTO agreement on trade in services.......47 .....■ .................6.6 Domestic financial sector liberalization .................................46 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................50 .....■ .................3.6 Efficacy of corporate boards .................................................51 .....■ .................3.9 Reliance on professional management .................................49 .....■ .................4.0 Willingness to delegate.........................................................47 .....■ .................3.5 Strength of auditing and reporting standards........................44 .....■ .................4.4 Ethical behavior of firms........................................................47 .....■ .................3.6 Protection of minority shareholders’ interests......................47 .....■ .................4.1 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................22 .....■ .................3.3 Centralization of economic policymaking ..............................33 .....■ .................3.1 Regulation of securities exchanges ......................................42 .....■ .................4.2 Property rights.......................................................................49 .....■ .................3.8 Intellectual property protection .............................................47 .....■ .................3.0 Diversion of public funds.......................................................41 .....■ .................3.1 Public trust of politicians .......................................................38 .....■ .................2.3 Corruption perceptions index ................................................49 .....■ .................2.5 Strength of legal rights index ................................................29 .....■ .................6.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................43 .....■ .................2.9 Judicial independence ...........................................................48 .....■ .................3.1 Irregular payments in judicial decisions ................................48 .....■ .................3.0 Time to enforce a contract ....................................................50 .....■ .............976.0 Number of procedures to enforce a contract .......................52 .....■ ...............47.0 Strength of investor protection .............................................16 .....■ .................6.3 Cost of enforcing contracts...................................................27 .....■ ...............23.8
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................43 .....■ .................3.9 Quality of math and science education.................................41 .....■ .................3.4 Extent of staff training...........................................................53 .....■ .................3.3 Local availability of specialized research and training services .............................................................52 .....■ .................3.4 Brain drain and ease of hiring foreign labor ..........................44 .....■ .................3.6 Tertiary enrollment ................................................................55 .....■ .................5.1
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................48 .....■ .................3.1 Distortive effect on competition of taxes and subsidies ......41 .....■ .................4.0 Marginal tax variation ............................................................49 .....■ ...............21.1 Time to pay taxes ..................................................................48 .....■ .............560.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................45 .....■ .................3.2 Quality of telephone infrastructure .......................................46 .....■ .................5.4 Internet users ........................................................................49 .....■ ...............10.7 Broadband Internet subscribers ............................................53 .....■ .................0.0 Telephone lines .....................................................................53 .....■ .................2.9 Mobile telephone subscribers...............................................50 .....■ ...............38.4
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
189
2: Country/Economy Profiles
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Pakistan Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................35 .....■ ...............12.6 Cost of registering property ..................................................41 .....■ .................5.3 Cost of closing a business ......................................................5 .....■ .................4.0 Time to start a business ........................................................33 .....■ ...............24.0 Time to register property.......................................................39 .....■ ...............50.0 Time to close a business.......................................................31 .....■ .................2.8
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
190
Currency stability Change in real effective exchange rate.................................29 .....■ .................0.8 External vulnerability indicator.................................................5 .....■ ...............28.1 Current account balance to GDP...........................................51 .....■ ...............–8.4 Dollarization vulnerability indicator ........................................30 .....■ ...............18.7 External debt to GDP (developing economies) .....................10 .....■ ...............27.9 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator..................................................47 .....■ .................2.0 Manageability of private debt..................................................3 .....■ .................0.4 Aggregate measure of real estate bubbles ..........................n/a .........................n/a
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................52 .....■ .................5.0 Foreign currency sovereign rating.........................................51 .....■ .................5.0 Aggregate macroprudential indicator ....................................44 .....■ .................4.5 Manageability of public debt .................................................38 .....■ ...............51.2 Credit default swap spreads.................................................n/a .........................n/a
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................44 .....■ ...............38.3 Central bank assets to GDP ....................................................7 .....■ .................6.7 Financial system deposits to GDP ........................................43 .....■ ...............35.5 M2 to GDP ............................................................................44 .....■ ...............50.0 Private credit to GDP.............................................................45 .....■ ...............27.2 Bank deposits to GDP ...........................................................44 .....■ ...............34.9 Money market instruments to GDP .....................................n/a .........................n/a
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................41 .....■ .................3.6 Bank overhead costs.............................................................26 .....■ .................2.5 Public ownership of banks ....................................................42 .....■ ...............30.8 Bank operating costs to assets.............................................40 .....■ .................4.0 Non-performing bank loans to total loans .............................47 .....■ .................8.4
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................45 .....■ .................1.5 Public credit registry coverage ..............................................15 .....■ .................4.9
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................38 .....■ .................0.3 IPO proceeds amount ...........................................................26 .....■ .................0.4 Share of world IPOs ..............................................................42 .....■ .................0.1
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Pakistan Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................45 .....■ .................0.1 M&A transaction value to GDP .............................................47 .....■ .................1.6 Share of total number of M&A deals ....................................51 .....■ .................0.1
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................47 .....■ ..........1,094.0 Insurance density ..................................................................51 .....■ .................6.7 Real growth of direct insurance premiums...........................22 .....■ .................0.1 Insurance penetration............................................................49 .....■ .................0.0 Relative value-added of insurance to GDP............................40 .....■ .................0.6
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................48 .....■ .................0.3 Share of total number of securitization deals .......................34 .....■ .................0.2
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio.....................................................9 .....■ .............172.8 Stock market capitalization to GDP.......................................45 .....■ ...............40.5 Stock market value traded to GDP........................................27 .....■ ...............70.0 Number of listed companies per 10,000 people...................35 .....■ .................0.0
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP .............25 .....■ ...............29.1 Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
191 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................47 .....■ .................4.0 Venture capital availability .....................................................42 .....■ .................2.8 Ease of access to credit........................................................28 .....■ .................3.5 Financing through local equity market ..................................31 .....■ .................4.2 Ease of access to loans ........................................................32 .....■ .................3.2 Foreign direct investment to GDP ........................................34 .....■ .................3.7
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................34 .....■ ........22,607.0 Commercial bank branches...................................................40 .....■ .................7.5 Total number of ATMs...........................................................42 .....■ .................3.4 Total number of point of sale (POS) devices...........................4 .....■ ..........2,285.6 MFI borrowers’ penetration rate ...........................................16 .....■ .................2.6
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Panama Key indicators
Financial assets by major type, 2007 18.2%
Population (millions), 2008 .........................................................3.4
US$ bn
30.6%
GDP (US$ billions), 2008 ...........................................................23.1 GDP (current prices) per capita, 2008 ..............................6,784.1 GDP (PPP) as share (%) of world total, 2008 ........................0.06 Average rate of real GDP growth (%), 2004–08....................8.79
3.7%
■ ■ ■ ■
Public debt securities .........10.5 Private debt securities..........1.3 Banking deposits .................16.3 Equity securities ....................6.2 Total
34.2
47.6%
Total/GDP: 175.7%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................29 3.6 1
2
3
4
5
6
7
Factors, policies, and institutions
192
1st pillar: Institutional environment .........................................26
4.5
Financial sector liberalization ....................................................18 Corporate governance.................................................................32 Legal and regulatory issues .......................................................34 Contract enforcement..................................................................48
6.5 4.6 3.6 3.4
2nd pillar: Business environment .............................................39
4.1
Human capital ...............................................................................41 Taxes...............................................................................................44 Infrastructure ................................................................................39 Cost of doing business ................................................................27
3.8 3.9 3.4 5.2
3rd pillar: Financial stability......................................................35
4.6
Currency stability..........................................................................45 Banking system stability................................................................9 Risk of sovereign debt crisis ......................................................39
3.6 5.7 4.0 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................24
4.0
Size index .......................................................................................19 Efficiency index.............................................................................23 Financial information disclosure................................................31
3.7 5.3 2.3
5th pillar: Non-banking financial services .............................46
1.6
IPO activity.....................................................................................53 M&A activity..................................................................................37 Insurance .......................................................................................34 Securitization.................................................................................41
1.0 1.6 2.3 1.5
6th pillar: Financial markets......................................................28
2.6
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................53 Bond market development..........................................................11
n/a n/a 1.2 4.1 1
Financial access 7th pillar: Financial access........................................................17
4.0
Commercial access........................................................................3 Retail access.................................................................................17
4.8 3.1 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:22 PM
Page 193
Panama Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.......22 .....■ ...............53.0 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................21 .....■ .................4.6 Efficacy of corporate boards .................................................27 .....■ .................4.8 Reliance on professional management .................................38 .....■ .................4.4 Willingness to delegate.........................................................27 .....■ .................4.3 Strength of auditing and reporting standards........................29 .....■ .................5.1 Ethical behavior of firms........................................................34 .....■ .................4.0 Protection of minority shareholders’ interests......................34 .....■ .................4.5 Official supervisory power ....................................................13 .....■ ...............12.0 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................15 .....■ .................3.7 Centralization of economic policymaking ..............................44 .....■ .................2.6 Regulation of securities exchanges ......................................16 .....■ .................5.2 Property rights.......................................................................30 .....■ .................4.9 Intellectual property protection .............................................33 .....■ .................3.8 Diversion of public funds.......................................................36 .....■ .................3.4 Public trust of politicians .......................................................39 .....■ .................2.2 Corruption perceptions index ................................................42 .....■ .................3.4 Strength of legal rights index ................................................29 .....■ .................6.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................50 .....■ .................2.5 Judicial independence ...........................................................50 .....■ .................3.0 Irregular payments in judicial decisions ................................36 .....■ .................4.0 Time to enforce a contract ....................................................44 .....■ .............686.0 Number of procedures to enforce a contract .......................19 .....■ ...............31.0 Strength of investor protection .............................................43 .....■ .................4.7 Cost of enforcing contracts...................................................52 .....■ ...............50.0
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................53 .....■ .................3.6 Quality of math and science education.................................47 .....■ .................3.0 Extent of staff training...........................................................35 .....■ .................4.1 Local availability of specialized research and training services .............................................................46 .....■ .................3.9 Brain drain and ease of hiring foreign labor ..........................25 .....■ .................4.3 Tertiary enrollment ................................................................32 .....■ ...............45.5
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................36 .....■ .................3.9 Distortive effect on competition of taxes and subsidies ......33 .....■ .................4.1 Marginal tax variation ............................................................42 .....■ ...............13.1 Time to pay taxes ..................................................................45 .....■ .............482.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................37 .....■ .................4.0 Quality of telephone infrastructure .......................................33 .....■ .................6.1 Internet users ........................................................................38 .....■ ...............22.3 Broadband Internet subscribers ............................................33 .....■ .................4.3 Telephone lines .....................................................................45 .....■ ...............14.8 Mobile telephone subscribers...............................................31 .....■ ...............90.0
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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Panama Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................47 .....■ ...............19.6 Cost of registering property ..................................................19 .....■ .................2.4 Cost of closing a business ....................................................37 .....■ ...............18.0 Time to start a business ........................................................17 .....■ ...............13.0 Time to register property.......................................................36 .....■ ...............44.0 Time to close a business.......................................................28 .....■ .................2.5
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
194
Currency stability Change in real effective exchange rate.................................47 .....■ ...............–2.2 External vulnerability indicator...............................................10 .....■ ...............38.9 Current account balance to GDP...........................................54 .....■ .............–12.4 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................24 .....■ ...............51.2 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................20 .....■ .................1.0 Financial strengths indicator..................................................32 .....■ .................5.0 Manageability of private debt................................................18 .....■ .................7.3 Aggregate measure of real estate bubbles.............................6 .....■ .................6.3
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................44 .....■ ...............10.0 Foreign currency sovereign rating.........................................41 .....■ ...............10.0 Aggregate macroprudential indicator ......................................7 .....■ .................5.7 Manageability of public debt .................................................34 .....■ ...............45.0 Credit default swap spreads .................................................33 .....■ .............229.4
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................27 .....■ ...............80.7 Central bank assets to GDP ....................................................4 .....■ ...............12.8 Financial system deposits to GDP ........................................18 .....■ ...............77.6 M2 to GDP ............................................................................19 .....■ ...............91.5 Private credit to GDP.............................................................28 .....■ ...............77.5 Bank deposits to GDP ...........................................................19 .....■ ...............77.6 Money market instruments to GDP......................................27 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................14 .....■ .................4.6 Bank overhead costs.............................................................37 .....■ .................3.3 Public ownership of banks ......................................................1 .....■ .................0.0 Bank operating costs to assets.............................................42 .....■ .................5.0 Non-performing bank loans to total loans .............................11 .....■ .................1.4
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................22 .....■ ...............43.7 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................53 .....■ .................0.0 IPO proceeds amount ...........................................................53 .....■ .................0.0 Share of world IPOs ..............................................................53 .....■ .................0.0
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Panama Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................49 .....■ .................0.0 M&A transaction value to GDP .............................................21 .....■ .................4.2 Share of total number of M&A deals ....................................53 .....■ .................0.0
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................52 .....■ .............607.0 Insurance density ..................................................................35 .....■ .............181.5 Real growth of direct insurance premiums.............................9 .....■ .................0.2 Insurance penetration............................................................32 .....■ .................0.0 Relative value-added of insurance to GDP............................39 .....■ .................0.6
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................34 .....■ .................1.5 Share of total number of securitization deals .......................53 .....■ .................0.0
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................54 .....■ .................2.0 Stock market capitalization to GDP.......................................51 .....■ ...............30.4 Stock market value traded to GDP........................................53 .....■ .................0.6 Number of listed companies per 10,000 people...................26 .....■ .................0.1
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP .......................................27 .....■ .................7.2 Public international bonds to GDP ..........................................1 .....■ ...............46.9
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
195 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................22 .....■ .................5.6 Venture capital availability .....................................................14 .....■ .................3.8 Ease of access to credit..........................................................1 .....■ .................5.2 Financing through local equity market ..................................21 .....■ .................4.5 Ease of access to loans ........................................................11 .....■ .................4.3 Foreign direct investment to GDP ........................................10 .....■ .................9.4
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................24 .....■ ........75,717.0 Commercial bank branches...................................................19 .....■ ...............18.9 Total number of ATMs...........................................................34 .....■ ...............36.9 Total number of point of sale (POS) devices...........................3 .....■ ..........3,915.9 MFI borrowers’ penetration rate ...........................................18 .....■ .................1.6
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Peru Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................28.7
US$ bn
18.4%
GDP (US$ billions), 2008 .........................................................127.6 4.2%
GDP (current prices) per capita, 2008 ..............................4,452.5 61.1%
GDP (PPP) as share (%) of world total, 2008 ........................0.35 Average rate of real GDP growth (%), 2004–08....................7.65
16.4%
■ ■ ■ ■
Public debt securities .........31.9 Private debt securities..........7.2 Banking deposits .................28.5 Equity securities ................106.0 Total
173.5
Total/GDP: 161.5%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................42 3.1 1
2
3
4
5
6
7
Factors, policies, and institutions
196
1st pillar: Institutional environment .........................................40
3.7
Financial sector liberalization ....................................................34 Corporate governance.................................................................44 Legal and regulatory issues .......................................................41 Contract enforcement..................................................................44
3.8 4.1 3.3 3.7
2nd pillar: Business environment .............................................42
4.0
Human capital ...............................................................................47 Taxes...............................................................................................25 Infrastructure ................................................................................49 Cost of doing business ................................................................42
3.6 4.8 2.9 4.6
3rd pillar: Financial stability......................................................22
4.9
Currency stability..........................................................................38 Banking system stability..............................................................15 Risk of sovereign debt crisis ......................................................29
3.9 5.6 4.9 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................43
2.8
Size index .......................................................................................53 Efficiency index.............................................................................42 Financial information disclosure................................................21
1.1 4.3 3.2
5th pillar: Non-banking financial services .............................45
1.6
IPO activity.....................................................................................47 M&A activity..................................................................................47 Insurance .......................................................................................50 Securitization.................................................................................23
1.2 1.2 1.5 2.5
6th pillar: Financial markets......................................................50
1.4
Foreign exchange markets .........................................................42 Derivatives markets....................................................................n/a Equity market development ........................................................46 Bond market development..........................................................38
1.0 n/a 1.5 1.6 1
Financial access 7th pillar: Financial access........................................................35
3.1
Commercial access......................................................................32 Retail access.................................................................................37
3.8 2.4 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Peru Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................31 .....■ .................2.5 Commitments to WTO agreement on trade in services.......44 .....■ ...............26.5 Domestic financial sector liberalization .................................32 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................47 .....■ .................3.8 Efficacy of corporate boards .................................................26 .....■ .................4.8 Reliance on professional management .................................34 .....■ .................4.7 Willingness to delegate.........................................................38 .....■ .................3.9 Strength of auditing and reporting standards........................39 .....■ .................4.8 Ethical behavior of firms........................................................41 .....■ .................3.7 Protection of minority shareholders’ interests......................30 .....■ .................4.6 Official supervisory power ....................................................13 .....■ ...............12.0 Private monitoring of the banking industry ...........................30 .....■ .................5.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................48 .....■ .................2.5 Centralization of economic policymaking ..............................29 .....■ .................3.2 Regulation of securities exchanges ......................................45 .....■ .................4.2 Property rights.......................................................................45 .....■ .................4.0 Intellectual property protection .............................................52 .....■ .................2.5 Diversion of public funds.......................................................35 .....■ .................3.4 Public trust of politicians .......................................................44 .....■ .................2.1 Corruption perceptions index ................................................36 .....■ .................3.6 Strength of legal rights index ................................................18 .....■ .................7.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................53 .....■ .................2.2 Judicial independence ...........................................................51 .....■ .................2.9 Irregular payments in judicial decisions ................................31 .....■ .................4.4 Time to enforce a contract ....................................................24 .....■ .............468.0 Number of procedures to enforce a contract .......................45 .....■ ...............41.0 Strength of investor protection .............................................13 .....■ .................6.7 Cost of enforcing contracts...................................................48 .....■ ...............35.7
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................34 .....■ .................4.3 Quality of math and science education.................................54 .....■ .................2.2 Extent of staff training...........................................................42 .....■ .................3.7 Local availability of specialized research and training services .............................................................50 .....■ .................3.8 Brain drain and ease of hiring foreign labor ..........................27 .....■ .................4.2 Tertiary enrollment ................................................................35 .....■ ...............35.1
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................29 .....■ .................4.4 Distortive effect on competition of taxes and subsidies ......16 .....■ .................4.7 Marginal tax variation ............................................................16 .....■ .................2.9 Time to pay taxes ..................................................................42 .....■ .............424.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................50 .....■ .................3.0 Quality of telephone infrastructure .......................................31 .....■ .................6.1 Internet users ........................................................................33 .....■ ...............27.4 Broadband Internet subscribers ............................................41 .....■ .................2.0 Telephone lines .....................................................................48 .....■ .................9.6 Mobile telephone subscribers...............................................47 .....■ ...............55.3
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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Peru Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................48 .....■ ...............25.7 Cost of registering property ..................................................30 .....■ .................3.3 Cost of closing a business ....................................................15 .....■ .................7.0 Time to start a business ........................................................51 .....■ ...............65.0 Time to register property.......................................................28 .....■ ...............33.0 Time to close a business.......................................................37 .....■ .................3.1
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
198
Currency stability Change in real effective exchange rate.................................45 .....■ ...............–0.8 External vulnerability indicator.................................................7 .....■ ...............31.6 Current account balance to GDP...........................................41 .....■ ...............–3.3 Dollarization vulnerability indicator ........................................34 .....■ ...............46.2 External debt to GDP (developing economies) .....................11 .....■ ...............28.7 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................17 .....■ .................0.8 Financial strengths indicator..................................................37 .....■ .................4.0 Manageability of private debt................................................15 .....■ .................6.6 Aggregate measure of real estate bubbles.............................7 .....■ .................6.3
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................35 .....■ ...............13.0 Foreign currency sovereign rating.........................................36 .....■ ...............11.0 Aggregate macroprudential indicator ......................................1 .....■ .................6.5 Manageability of public debt .................................................12 .....■ ...............24.0 Credit default swap spreads .................................................28 .....■ .............195.5
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................52 .....■ ...............19.6 Central bank assets to GDP ..................................................46 .....■ .................0.0 Financial system deposits to GDP ........................................48 .....■ ...............22.5 M2 to GDP ............................................................................51 .....■ ...............34.3 Private credit to GDP.............................................................50 .....■ ...............18.2 Bank deposits to GDP ...........................................................50 .....■ ...............22.5 Money market instruments to GDP......................................27 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................42 .....■ .................3.5 Bank overhead costs.............................................................49 .....■ .................5.7 Public ownership of banks ....................................................23 .....■ .................6.5 Bank operating costs to assets.............................................43 .....■ .................5.1 Non-performing bank loans to total loans .............................18 .....■ .................2.2
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................28 .....■ ...............33.2 Public credit registry coverage ................................................9 .....■ ...............23.7
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................49 .....■ .................0.1 IPO proceeds amount ...........................................................46 .....■ .................0.1 Share of world IPOs ..............................................................47 .....■ .................0.1
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Peru Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................46 .....■ .................0.1 M&A transaction value to GDP .............................................42 .....■ .................1.9 Share of total number of M&A deals ....................................43 .....■ .................0.1
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................46 .....■ ..........1,187.0 Insurance density ..................................................................46 .....■ ...............42.5 Real growth of direct insurance premiums...........................37 .....■ .................0.0 Insurance penetration............................................................47 .....■ .................0.0 Relative value-added of insurance to GDP............................29 .....■ .................1.0
United States ..........1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................30 .....■ .................1.8 Share of total number of securitization deals .......................17 .....■ .................0.9
United States ......................16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................42 .....■ .................0.0 Outright forward foreign exchange turnover ........................36 .....■ .................0.1 Foreign exchange swap turnover .........................................n/a .........................n/a
United Kingdom ..................26.3 United Kingdom ..................29.2 United Kingdom ..................40.8
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps .............................35 .....■ .................0.0 Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................51 .....■ .................8.7 Stock market capitalization to GDP.......................................32 .....■ ...............76.1 Stock market value traded to GDP........................................48 .....■ .................6.7 Number of listed companies per 10,000 people...................25 .....■ .................0.1
United Kingdom ................267.7 Hong Kong SAR ................500.5 Hong Kong SAR ................443.6 Hong Kong SAR ....................1.5
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............24 .....■ .................4.2 Public domestic bond market capitalization to GDP .............32 .....■ ...............17.7 Private international bonds to GDP .......................................36 .....■ .................2.4 Public international bonds to GDP ........................................13 .....■ .................8.6
Denmark............................202.7 Japan .................................198.6 Ireland................................279.1 Panama................................46.9
6.04
199 Kingdom ..................45.1 Kingdom ..................45.8 States ......................42.4 Kingdom ..................46.7 Kingdom ..................42.4
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................34 .....■ .................4.7 Venture capital availability .....................................................36 .....■ .................3.0 Ease of access to credit..........................................................5 .....■ .................4.6 Financing through local equity market ..................................43 .....■ .................3.9 Ease of access to loans ........................................................28 .....■ .................3.4 Foreign direct investment to GDP ........................................24 .....■ .................5.0
Switzerland............................6.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Hong Kong SAR ....................5.3 Finland ...................................4.7 Hong Kong SAR ..................28.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................27 .....■ ........71,642.7 Commercial bank branches...................................................41 .....■ .................7.5 Total number of ATMs...........................................................38 .....■ ...............17.7 Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate .............................................5 .....■ ...............17.6
Ukraine .......................375,499.3 Italy......................................53.0 Canada...............................202.8 Austria ............................4,889.6 Bangladesh..........................41.2
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Philippines Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................90.3
US$ bn
29.8%
GDP (US$ billions), 2008 .........................................................168.6
38.2%
GDP (current prices) per capita, 2008 ..............................1,866.0 GDP (PPP) as share (%) of world total, 2008 ........................0.46 4.1%
Average rate of real GDP growth (%), 2004–08....................5.71
■ ■ ■ ■
Public debt securities .........80.4 Private debt securities........11.2 Banking deposits .................75.3 Equity securities ................103.2 Total
270.1
27.9%
Total/GDP: 187.5%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................50 2.8 1
2
3
4
5
6
7
Factors, policies, and institutions
200
1st pillar: Institutional environment .........................................43
3.6
Financial sector liberalization ....................................................32 Corporate governance.................................................................40 Legal and regulatory issues .......................................................52 Contract enforcement..................................................................49
4.1 4.3 2.7 3.3
2nd pillar: Business environment .............................................51
3.4
Human capital ...............................................................................44 Taxes...............................................................................................39 Infrastructure ................................................................................50 Cost of doing business ................................................................52
3.7 4.1 2.4 3.2
3rd pillar: Financial stability......................................................47
4.1
Currency stability..........................................................................16 Banking system stability..............................................................47 Risk of sovereign debt crisis ......................................................45
4.7 4.2 3.3 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................45
2.6
Size index .......................................................................................40 Efficiency index.............................................................................44 Financial information disclosure................................................49
2.0 4.0 1.2
5th pillar: Non-banking financial services .............................41
1.8
IPO activity.....................................................................................32 M&A activity..................................................................................30 Insurance .......................................................................................45 Securitization.................................................................................31
1.9 1.7 1.7 2.0
6th pillar: Financial markets......................................................40
1.8
Foreign exchange markets .........................................................41 Derivatives markets .....................................................................36 Equity market development ........................................................45 Bond market development..........................................................23
1.0 1.0 1.6 2.9 1
Financial access 7th pillar: Financial access........................................................51
2.5
Commercial access......................................................................46 Retail access.................................................................................44
3.2 1.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Philippines Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................40 .....■ .................0.1 Commitments to WTO agreement on trade in services.......28 .....■ ...............61.5 Domestic financial sector liberalization .................................28 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................43 .....■ .................4.1 Efficacy of corporate boards .................................................34 .....■ .................4.7 Reliance on professional management .................................32 .....■ .................4.8 Willingness to delegate.........................................................29 .....■ .................4.2 Strength of auditing and reporting standards........................36 .....■ .................4.9 Ethical behavior of firms........................................................51 .....■ .................3.3 Protection of minority shareholders’ interests......................43 .....■ .................4.3 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................44 .....■ .................2.7 Centralization of economic policymaking ..............................35 .....■ .................2.9 Regulation of securities exchanges ......................................44 .....■ .................4.2 Property rights.......................................................................48 .....■ .................3.8 Intellectual property protection .............................................48 .....■ .................2.9 Diversion of public funds.......................................................53 .....■ .................2.3 Public trust of politicians .......................................................54 .....■ .................1.6 Corruption perceptions index ................................................51 .....■ .................2.3 Strength of legal rights index ................................................49 .....■ .................3.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................49 .....■ .................2.5 Judicial independence ...........................................................47 .....■ .................3.1 Irregular payments in judicial decisions ................................53 .....■ .................2.4 Time to enforce a contract ....................................................48 .....■ .............842.0 Number of procedures to enforce a contract .......................36 .....■ ...............37.0 Strength of investor protection .............................................50 .....■ .................4.0 Cost of enforcing contracts...................................................33 .....■ ...............26.0
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................26 .....■ .................4.7 Quality of math and science education.................................42 .....■ .................3.4 Extent of staff training...........................................................28 .....■ .................4.4 Local availability of specialized research and training services .............................................................49 .....■ .................3.8 Brain drain and ease of hiring foreign labor ..........................52 .....■ .................3.2 Tertiary enrollment ................................................................43 .....■ ...............28.5
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................53 .....■ .................2.4 Distortive effect on competition of taxes and subsidies ......43 .....■ .................3.9 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes ..................................................................22 .....■ .............195.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................49 .....■ .................3.1 Quality of telephone infrastructure .......................................43 .....■ .................5.6 Internet users ........................................................................53 .....■ .................6.0 Broadband Internet subscribers ............................................50 .....■ .................0.6 Telephone lines .....................................................................51 .....■ .................4.5 Mobile telephone subscribers...............................................46 .....■ ...............58.9
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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2: Country/Economy Profiles
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Philippines Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................51 .....■ ...............29.8 Cost of registering property ..................................................33 .....■ .................4.3 Cost of closing a business ....................................................53 .....■ ...............38.0 Time to start a business ........................................................50 .....■ ...............52.0 Time to register property.......................................................28 .....■ ...............33.0 Time to close a business.......................................................53 .....■ .................5.7
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
202
Currency stability Change in real effective exchange rate...................................7 .....■ .................4.8 External vulnerability indicator...............................................14 .....■ ...............47.1 Current account balance to GDP...........................................21 .....■ .................2.5 Dollarization vulnerability indicator ........................................33 .....■ ...............34.3 External debt to GDP (developing economies) .....................21 .....■ ...............45.5 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................48 .....■ .................2.3 Financial strengths indicator..................................................42 .....■ .................3.0 Manageability of private debt................................................20 .....■ ...............11.7 Aggregate measure of real estate bubbles...........................32 .....■ .................4.2
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................44 .....■ ...............10.0 Foreign currency sovereign rating.........................................46 .....■ .................8.0 Aggregate macroprudential indicator ....................................29 .....■ .................4.9 Manageability of public debt .................................................42 .....■ ...............56.9 Credit default swap spreads .................................................35 .....■ .............240.0
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................45 .....■ ...............36.3 Central bank assets to GDP ..................................................12 .....■ .................4.6 Financial system deposits to GDP ........................................32 .....■ ...............51.2 M2 to GDP ............................................................................39 .....■ ...............55.1 Private credit to GDP.............................................................44 .....■ ...............28.0 Bank deposits to GDP ...........................................................39 .....■ ...............46.2 Money market instruments to GDP......................................21 .....■ .................0.1
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................53 .....■ .................2.5 Bank overhead costs.............................................................39 .....■ .................3.7 Public ownership of banks ....................................................38 .....■ ...............17.6 Bank operating costs to assets.............................................35 .....■ .................3.5 Non-performing bank loans to total loans .............................43 .....■ .................5.2
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................41 .....■ .................5.4 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................35 .....■ .................0.3 IPO proceeds amount ...........................................................17 .....■ .................0.5 Share of world IPOs ..............................................................27 .....■ .................0.5
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Philippines Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................35 .....■ .................0.2 M&A transaction value to GDP .............................................23 .....■ .................4.1 Share of total number of M&A deals ....................................37 .....■ .................0.3
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................44 .....■ ..........2,105.0 Insurance density ..................................................................48 .....■ ...............23.9 Real growth of direct insurance premiums...........................29 .....■ .................0.1 Insurance penetration............................................................44 .....■ .................0.0 Relative value-added of insurance to GDP............................25 .....■ .................1.1
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................26 .....■ .................2.2 Share of total number of securitization deals .......................25 .....■ .................0.3
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................39 .....■ .................0.1 Outright forward foreign exchange turnover ........................37 .....■ .................0.0 Foreign exchange swap turnover..........................................35 .....■ .................0.0
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................31 .....■ .................0.0 Interest rate derivatives turnover: Swaps .............................37 .....■ .................0.0 Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps .....33 .....■ .................0.0 Foreign exchange derivatives turnover: Options ..................39 .....■ .................0.0
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................43 .....■ ...............34.0 Stock market capitalization to GDP.......................................35 .....■ ...............59.8 Stock market value traded to GDP........................................41 .....■ ...............20.3 Number of listed companies per 10,000 people...................37 .....■ .................0.0
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............28 .....■ .................1.6 Public domestic bond market capitalization to GDP .............18 .....■ ...............44.1 Private international bonds to GDP .......................................26 .....■ ...............10.0 Public international bonds to GDP ..........................................6 .....■ ...............24.1
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
203 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................44 .....■ .................4.2 Venture capital availability .....................................................46 .....■ .................2.5 Ease of access to credit........................................................15 .....■ .................4.0 Financing through local equity market ..................................35 .....■ .................4.1 Ease of access to loans ........................................................48 .....■ .................2.7 Foreign direct investment to GDP ........................................44 .....■ .................2.0
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................31 .....■ ........51,694.4 Commercial bank branches...................................................37 .....■ ...............10.5 Total number of ATMs...........................................................40 .....■ ...............13.3 Total number of point of sale (POS) devices.........................32 .....■ ...............47.1 MFI borrowers’ penetration rate .............................................8 .....■ ...............11.0
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Poland Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................38.1
US$ bn
30.7%
GDP (US$ billions), 2008 .........................................................525.7
35.1%
GDP (current prices) per capita, 2008 ............................13,798.9 GDP (PPP) as share (%) of world total, 2008 ........................0.97
0.6%
Average rate of real GDP growth (%), 2004–08....................5.33
■ ■ ■ ■
Public debt securities .......181.7 Private debt securities..........3.5 Banking deposits ...............198.6 Equity securities ................207.3 Total
591.1
33.6%
Total/GDP: 139.2%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................39 3.3 1
2
3
4
5
6
7
Factors, policies, and institutions
204
1st pillar: Institutional environment .........................................37
3.9
Financial sector liberalization ....................................................42 Corporate governance.................................................................37 Legal and regulatory issues .......................................................30 Contract enforcement..................................................................32
3.1 4.4 3.9 4.3
2nd pillar: Business environment .............................................33
4.3
Human capital ...............................................................................23 Taxes...............................................................................................33 Infrastructure ................................................................................30 Cost of doing business ................................................................45
4.6 4.5 3.9 4.3
3rd pillar: Financial stability......................................................26
4.8
Currency stability..........................................................................42 Banking system stability..............................................................20 Risk of sovereign debt crisis ......................................................26
3.7 5.4 5.1 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................38
3.2
Size index .......................................................................................45 Efficiency index.............................................................................27 Financial information disclosure................................................26
1.6 5.0 2.5
5th pillar: Non-banking financial services .............................43
1.7
IPO activity.....................................................................................27 M&A activity..................................................................................42 Insurance .......................................................................................29 Securitization.................................................................................53
2.0 1.3 2.6 1.0
6th pillar: Financial markets......................................................38
1.8
Foreign exchange markets .........................................................26 Derivatives markets .....................................................................25 Equity market development ........................................................43 Bond market development..........................................................28
1.2 1.8 1.7 2.5 1
Financial access 7th pillar: Financial access........................................................34
3.1
Commercial access......................................................................36 Retail access.................................................................................25
3.5 2.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Poland Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................39 .....■ .................0.1 Commitments to WTO agreement on trade in services.......37 .....■ ...............32.2 Domestic financial sector liberalization .................................44 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................25 .....■ .................4.5 Efficacy of corporate boards .................................................44 .....■ .................4.5 Reliance on professional management .................................30 .....■ .................4.9 Willingness to delegate.........................................................40 .....■ .................3.9 Strength of auditing and reporting standards........................35 .....■ .................4.9 Ethical behavior of firms........................................................29 .....■ .................4.5 Protection of minority shareholders’ interests......................33 .....■ .................4.5 Official supervisory power ....................................................27 .....■ .................9.5 Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................42 .....■ .................2.7 Centralization of economic policymaking ................................6 .....■ .................4.7 Regulation of securities exchanges ......................................25 .....■ .................4.9 Property rights.......................................................................41 .....■ .................4.3 Intellectual property protection .............................................37 .....■ .................3.6 Diversion of public funds.......................................................27 .....■ .................4.0 Public trust of politicians .......................................................43 .....■ .................2.1 Corruption perceptions index ................................................32 .....■ .................4.6 Strength of legal rights index ................................................11 .....■ .................8.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................44 .....■ .................2.8 Judicial independence ...........................................................30 .....■ .................4.1 Irregular payments in judicial decisions ................................26 .....■ .................4.8 Time to enforce a contract ....................................................47 .....■ .............830.0 Number of procedures to enforce a contract .......................38 .....■ ...............38.0 Strength of investor protection .............................................21 .....■ .................6.0 Cost of enforcing contracts.....................................................6 .....■ ...............12.0
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................29 .....■ .................4.5 Quality of math and science education.................................14 .....■ .................4.9 Extent of staff training...........................................................37 .....■ .................4.1 Local availability of specialized research and training services .............................................................25 .....■ .................4.8 Brain drain and ease of hiring foreign labor ..........................47 .....■ .................3.5 Tertiary enrollment ................................................................13 .....■ ...............65.6
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................27 .....■ .................4.8 Distortive effect on competition of taxes and subsidies ......42 .....■ .................3.9 Marginal tax variation ............................................................23 .....■ .................6.0 Time to pay taxes ..................................................................41 .....■ .............418.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................53 .....■ .................2.6 Quality of telephone infrastructure .......................................44 .....■ .................5.5 Internet users ........................................................................27 .....■ ...............44.0 Broadband Internet subscribers ............................................26 .....■ .................9.0 Telephone lines .....................................................................29 .....■ ...............27.1 Mobile telephone subscribers...............................................25 .....■ .............108.7
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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Poland Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................46 .....■ ...............18.8 Cost of registering property ....................................................6 .....■ .................0.5 Cost of closing a business ....................................................44 .....■ ...............20.0 Time to start a business ........................................................40 .....■ ...............31.0 Time to register property.......................................................54 .....■ .............197.0 Time to close a business.......................................................34 .....■ .................3.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
206
Currency stability Change in real effective exchange rate.................................21 .....■ .................1.9 External vulnerability indicator...............................................28 .....■ .............140.6 Current account balance to GDP...........................................45 .....■ ...............–5.5 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................23 .....■ ...............48.0 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................23 .....■ .................1.3 Financial strengths indicator..................................................32 .....■ .................5.0 Manageability of private debt..................................................4 .....■ .................0.6 Aggregate measure of real estate bubbles...........................20 .....■ .................5.2
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................32 .....■ ...............15.0 Foreign currency sovereign rating.........................................30 .....■ ...............14.0 Aggregate macroprudential indicator ......................................3 .....■ .................6.1 Manageability of public debt .................................................35 .....■ ...............45.2 Credit default swap spreads .................................................26 .....■ .............183.7
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................41 .....■ ...............45.9 Central bank assets to GDP ..................................................45 .....■ .................0.0 Financial system deposits to GDP ........................................40 .....■ ...............39.3 M2 to GDP ............................................................................41 .....■ ...............52.1 Private credit to GDP.............................................................41 .....■ ...............35.2 Bank deposits to GDP ...........................................................41 .....■ ...............39.3 Money market instruments to GDP......................................27 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................28 .....■ .................4.0 Bank overhead costs.............................................................30 .....■ .................2.9 Public ownership of banks ....................................................21 .....■ .................6.1 Bank operating costs to assets.............................................31 .....■ .................3.1 Non-performing bank loans to total loans .............................40 .....■ .................4.4
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................20 .....■ ...............50.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................28 .....■ .................0.5 IPO proceeds amount ...........................................................34 .....■ .................0.3 Share of world IPOs ..............................................................14 .....■ .................2.1
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Poland Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................36 .....■ .................0.2 M&A transaction value to GDP .............................................49 .....■ .................1.2 Share of total number of M&A deals ....................................25 .....■ .................0.6
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................27 .....■ ........15,625.0 Insurance density ..................................................................28 .....■ .............411.0 Real growth of direct insurance premiums...........................16 .....■ .................0.1 Insurance penetration............................................................27 .....■ .................0.0 Relative value-added of insurance to GDP............................21 .....■ .................1.3
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................51 .....■ .................0.2 Share of total number of securitization deals .......................47 .....■ .................0.1
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................29 .....■ .................0.2 Outright forward foreign exchange turnover ........................29 .....■ .................0.1 Foreign exchange swap turnover..........................................25 .....■ .................0.3
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................16 .....■ .................0.4 Interest rate derivatives turnover: Swaps .............................24 .....■ .................0.1 Interest rate derivatives turnover: Options ...........................27 .....■ .................0.0 Foreign exchange derivatives turnover: Currency swaps .....25 .....■ .................0.2 Foreign exchange derivatives turnover: Options ..................22 .....■ .................0.1
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................41 .....■ ...............47.2 Stock market capitalization to GDP.......................................41 .....■ ...............42.6 Stock market value traded to GDP........................................42 .....■ ...............20.1 Number of listed companies per 10,000 people...................22 .....■ .................0.1
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP .............20 .....■ ...............40.0 Private international bonds to GDP .......................................42 .....■ .................0.6 Public international bonds to GDP ........................................12 .....■ .................9.2
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
207 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................43 .....■ .................4.2 Venture capital availability .....................................................31 .....■ .................3.1 Ease of access to credit........................................................27 .....■ .................3.5 Financing through local equity market ..................................39 .....■ .................4.0 Ease of access to loans ........................................................36 .....■ .................3.1 Foreign direct investment to GDP ........................................29 .....■ .................4.1
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................16 .....■ ......152,738.7 Commercial bank branches.....................................................8 .....■ ...............32.6 Total number of ATMs...........................................................28 .....■ ...............42.2 Total number of point of sale (POS) devices.........................24 .....■ .............426.5 MFI borrowers’ penetration rate ...........................................23 .....■ .................0.2
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Russian Federation Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .....................................................142.0
US$ bn
3.3% 4.9%
GDP (US$ billions), 2008 ......................................................1,676.6 GDP (current prices) per capita, 2008 ............................11,806.9
20.3%
GDP (PPP) as share (%) of world total, 2008 ........................3.30 Average rate of real GDP growth (%), 2004–08....................7.00
■ ■ ■ ■
Public debt securities .........69.9 Private debt securities......102.2 Banking deposits ...............427.3 Equity securities .............1,503.0 Total
71.5%
2,102.4
Total/GDP: 162.4%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................40 3.2 1
2
3
4
5
6
7
Factors, policies, and institutions
208
1st pillar: Institutional environment .........................................53
3.0
Financial sector liberalization ....................................................53 Corporate governance.................................................................53 Legal and regulatory issues .......................................................53 Contract enforcement..................................................................35
1.8 3.5 2.6 4.2
2nd pillar: Business environment .............................................34
4.2
Human capital ...............................................................................29 Taxes...............................................................................................46 Infrastructure ................................................................................34 Cost of doing business ................................................................26
4.3 3.6 3.6 5.4
3rd pillar: Financial stability......................................................39
4.5
Currency stability............................................................................4 Banking system stability..............................................................53 Risk of sovereign debt crisis ......................................................35
5.9 3.5 4.4 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................55
1.8
Size index .......................................................................................48 Efficiency index.............................................................................55 Financial information disclosure................................................45
1.4 2.4 1.3
5th pillar: Non-banking financial services ...............................4
4.1
IPO activity.......................................................................................3 M&A activity..................................................................................15 Insurance .......................................................................................30 Securitization...................................................................................3
5.3 3.4 2.5 5.3
6th pillar: Financial markets......................................................41
1.8
Foreign exchange markets .........................................................14 Derivatives markets....................................................................n/a Equity market development ........................................................33 Bond market development..........................................................43
1.9 n/a 2.2 1.2 1
Financial access 7th pillar: Financial access........................................................49
2.7
Commercial access......................................................................51 Retail access.................................................................................36
3.0 2.5 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Russian Federation Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................43 .....■ ...............–0.1 Commitments to WTO agreement on trade in services......n/a .........................n/a Domestic financial sector liberalization .................................52 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................37 .....■ .................4.3 Efficacy of corporate boards .................................................40 .....■ .................4.5 Reliance on professional management .................................40 .....■ .................4.3 Willingness to delegate.........................................................51 .....■ .................3.3 Strength of auditing and reporting standards........................54 .....■ .................3.7 Ethical behavior of firms........................................................50 .....■ .................3.4 Protection of minority shareholders’ interests......................54 .....■ .................3.2 Official supervisory power ....................................................32 .....■ .................8.5 Private monitoring of the banking industry ...........................22 .....■ .................6.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................50 .....■ .................2.4 Centralization of economic policymaking ..............................39 .....■ .................2.8 Regulation of securities exchanges ......................................53 .....■ .................3.3 Property rights.......................................................................52 .....■ .................3.1 Intellectual property protection .............................................49 .....■ .................2.7 Diversion of public funds.......................................................48 .....■ .................2.7 Public trust of politicians .......................................................37 .....■ .................2.3 Corruption perceptions index ................................................53 .....■ .................2.1 Strength of legal rights index ................................................49 .....■ .................3.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................38 .....■ .................3.2 Judicial independence ...........................................................52 .....■ .................2.7 Irregular payments in judicial decisions ................................52 .....■ .................2.7 Time to enforce a contract ......................................................6 .....■ .............281.0 Number of procedures to enforce a contract .......................36 .....■ ...............37.0 Strength of investor protection .............................................38 .....■ .................5.0 Cost of enforcing contracts.....................................................9 .....■ ...............13.4
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................47 .....■ .................3.7 Quality of math and science education.................................25 .....■ .................4.7 Extent of staff training...........................................................48 .....■ .................3.6 Local availability of specialized research and training services .............................................................42 .....■ .................4.0 Brain drain and ease of hiring foreign labor ..........................51 .....■ .................3.4 Tertiary enrollment ..................................................................9 .....■ ...............72.3
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................52 .....■ .................2.7 Distortive effect on competition of taxes and subsidies ......48 .....■ .................3.7 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes ..................................................................43 .....■ .............448.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................44 .....■ .................3.3 Quality of telephone infrastructure .......................................50 .....■ .................5.1 Internet users ........................................................................40 .....■ ...............21.1 Broadband Internet subscribers ............................................38 .....■ .................2.8 Telephone lines .....................................................................26 .....■ ...............31.0 Mobile telephone subscribers...............................................17 .....■ .............114.6
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
209
2: Country/Economy Profiles
Part 1.r3
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Russian Federation Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................16 .....■ .................2.6 Cost of registering property ....................................................4 .....■ .................0.2 Cost of closing a business ....................................................20 .....■ .................9.0 Time to start a business ........................................................38 .....■ ...............29.0 Time to register property.......................................................41 .....■ ...............52.0 Time to close a business.......................................................40 .....■ .................3.8
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
210
Currency stability Change in real effective exchange rate...................................2 .....■ .................7.4 External vulnerability indicator.................................................8 .....■ ...............34.7 Current account balance to GDP...........................................14 .....■ .................6.1 Dollarization vulnerability indicator ........................................27 .....■ .................9.9 External debt to GDP (developing economies) .....................16 .....■ ...............35.6 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................32 .....■ .................1.5 Financial strengths indicator..................................................47 .....■ .................2.0 Manageability of private debt................................................17 .....■ .................7.2 Aggregate measure of real estate bubbles...........................41 .....■ .................1.9
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................38 .....■ ...............12.7 Foreign currency sovereign rating.........................................35 .....■ ...............11.7 Aggregate macroprudential indicator ....................................32 .....■ .................4.9 Manageability of public debt ...................................................2 .....■ .................6.7 Credit default swap spreads .................................................37 .....■ .............319.6
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................46 .....■ ...............34.9 Central bank assets to GDP ..................................................29 .....■ .................0.9 Financial system deposits to GDP ........................................45 .....■ ...............27.0 M2 to GDP ............................................................................47 .....■ ...............40.4 Private credit to GDP.............................................................43 .....■ ...............31.6 Bank deposits to GDP ...........................................................47 .....■ ...............27.0 Money market instruments to GDP .....................................n/a .........................n/a
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................46 .....■ .................3.3 Bank overhead costs.............................................................51 .....■ .................7.7 Public ownership of banks ....................................................51 .....■ ...............58.3 Bank operating costs to assets.............................................55 .....■ ...............11.2 Non-performing bank loans to total loans .............................22 .....■ .................2.5
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................37 .....■ ...............10.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................3 .....■ .................8.9 IPO proceeds amount .............................................................3 .....■ .................1.5 Share of world IPOs ..............................................................17 .....■ .................1.1
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Russian Federation Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................12 .....■ .................2.1 M&A transaction value to GDP .............................................17 .....■ .................5.0 Share of total number of M&A deals ....................................11 .....■ .................2.4
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................20 .....■ ........29,846.0 Insurance density ..................................................................33 .....■ .............209.4 Real growth of direct insurance premiums...........................10 .....■ .................0.2 Insurance penetration............................................................38 .....■ .................0.0 Relative value-added of insurance to GDP............................22 .....■ .................1.2
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................13 .....■ .................3.7 Share of total number of securitization deals .........................2 .....■ .................4.5
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover..............................................8 .....■ .................2.7 Outright forward foreign exchange turnover ........................22 .....■ .................0.3 Foreign exchange swap turnover..........................................16 .....■ .................0.7
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options ..................37 .....■ .................0.0
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................34 .....■ ...............58.7 Stock market capitalization to GDP.......................................26 .....■ ...............99.6 Stock market value traded to GDP........................................28 .....■ ...............58.4 Number of listed companies per 10,000 people...................39 .....■ .................0.0
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP .............37 .....■ .................3.0 Private international bonds to GDP .......................................28 .....■ .................7.2 Public international bonds to GDP ........................................30 .....■ .................1.9
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
211 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................50 .....■ .................3.6 Venture capital availability .....................................................45 .....■ .................2.5 Ease of access to credit........................................................36 .....■ .................3.2 Financing through local equity market ..................................50 .....■ .................3.1 Ease of access to loans ........................................................50 .....■ .................2.6 Foreign direct investment to GDP ........................................30 .....■ .................4.1
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts .....................................8 .....■ ......189,220.0 Commercial bank branches...................................................46 .....■ .................2.9 Total number of ATMs...........................................................15 .....■ ...............65.6 Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ...........................................22 .....■ .................0.5
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Saudi Arabia Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................24.9
US$ bn
11.7% 0.9%
GDP (US$ billions), 2008 .........................................................481.6 GDP (current prices) per capita, 2008 ............................19,345.3 GDP (PPP) as share (%) of world total, 2008 ........................0.87
23.8%
Average rate of real GDP growth (%), 2004–08....................4.40
■ ■ ■ ■
Public debt securities .........95.2 Private debt securities..........7.1 Banking deposits ...............192.7 Equity securities ................515.1 Total
63.6%
810.2
Total/GDP: 212.1%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................24 3.9 1
2
3
4
5
6
7
Factors, policies, and institutions
212
1st pillar: Institutional environment .........................................25
4.6
Financial sector liberalization ....................................................25 Corporate governance.................................................................23 Legal and regulatory issues .......................................................26 Contract enforcement..................................................................33
5.2 4.8 4.1 4.3
2nd pillar: Business environment .............................................24
4.9
Human capital ...............................................................................39 Taxes...............................................................................................11 Infrastructure ................................................................................31 Cost of doing business ................................................................14
4.0 5.8 3.8 5.9
3rd pillar: Financial stability........................................................6
5.6
Currency stability..........................................................................15 Banking system stability................................................................5 Risk of sovereign debt crisis ......................................................20
4.9 6.1 5.6 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................31
3.6
Size index .......................................................................................42 Efficiency index...............................................................................3 Financial information disclosure................................................43
1.9 6.3 1.4
5th pillar: Non-banking financial services .............................34
2.0
IPO activity.....................................................................................10 M&A activity..................................................................................54 Insurance .......................................................................................36 Securitization.................................................................................49
3.7 1.0 2.2 1.2
6th pillar: Financial markets......................................................31
2.3
Foreign exchange markets .........................................................36 Derivatives markets .....................................................................27 Equity market development ........................................................19 Bond market development ........................................................n/a
1.1 1.7 3.6 n/a 1
Financial access 7th pillar: Financial access........................................................10
4.2
Commercial access......................................................................15 Retail access ...............................................................................n/a
4.2 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:22 PM
Page 213
Saudi Arabia Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................28 .....■ .................1.2 Commitments to WTO agreement on trade in services.......20 .....■ ...............51.8 Domestic financial sector liberalization .................................35 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................40 .....■ .................4.2 Efficacy of corporate boards .................................................37 .....■ .................4.6 Reliance on professional management .................................39 .....■ .................4.4 Willingness to delegate.........................................................26 .....■ .................4.3 Strength of auditing and reporting standards........................32 .....■ .................5.0 Ethical behavior of firms........................................................24 .....■ .................4.9 Protection of minority shareholders’ interests......................28 .....■ .................4.7 Official supervisory power ......................................................5 .....■ ...............13.0 Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation ...........................................9 .....■ .................4.0 Centralization of economic policymaking ..............................28 .....■ .................3.2 Regulation of securities exchanges ......................................37 .....■ .................4.4 Property rights.......................................................................24 .....■ .................5.3 Intellectual property protection .............................................23 .....■ .................4.6 Diversion of public funds.......................................................22 .....■ .................4.8 Public trust of politicians .........................................................9 .....■ .................4.9 Corruption perceptions index ................................................39 .....■ .................3.5 Strength of legal rights index ................................................39 .....■ .................4.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................24 .....■ .................4.1 Judicial independence ...........................................................20 .....■ .................5.0 Irregular payments in judicial decisions ................................25 .....■ .................5.0 Time to enforce a contract ....................................................42 .....■ .............635.0 Number of procedures to enforce a contract .......................49 .....■ ...............44.0 Strength of investor protection .............................................16 .....■ .................6.3 Cost of enforcing contracts...................................................37 .....■ ...............27.5
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................45 .....■ .................3.9 Quality of math and science education.................................37 .....■ .................3.7 Extent of staff training...........................................................30 .....■ .................4.3 Local availability of specialized research and training services .............................................................30 .....■ .................4.6 Brain drain and ease of hiring foreign labor ..........................15 .....■ .................4.7 Tertiary enrollment ................................................................41 .....■ ...............29.2
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................24 .....■ .................5.0 Distortive effect on competition of taxes and subsidies ........7 .....■ .................5.1 Marginal tax variation ............................................................11 .....■ .................0.4 Time to pay taxes ....................................................................5 .....■ ...............79.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................23 .....■ .................5.2 Quality of telephone infrastructure .......................................30 .....■ .................6.1 Internet users ........................................................................36 .....■ ...............25.8 Broadband Internet subscribers ............................................40 .....■ .................2.5 Telephone lines .....................................................................43 .....■ ...............16.2 Mobile telephone subscribers...............................................16 .....■ .............114.7
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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Saudi Arabia Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................39 .....■ ...............14.9 Cost of registering property ....................................................1 .....■ .................0.0 Cost of closing a business ....................................................45 .....■ ...............22.0 Time to start a business ........................................................16 .....■ ...............12.0 Time to register property.........................................................1 .....■ .................2.0 Time to close a business.......................................................16 .....■ .................1.5
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
214
Currency stability Change in real effective exchange rate.................................49 .....■ ...............–4.2 External vulnerability indicator...............................................11 .....■ ...............39.2 Current account balance to GDP.............................................2 .....■ ...............28.9 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt..................................................8 .....■ .................2.4 Aggregate measure of real estate bubbles ..........................n/a .........................n/a
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................21 .....■ ...............17.0 Foreign currency sovereign rating.........................................20 .....■ ...............17.0 Aggregate macroprudential indicator ....................................24 .....■ .................5.0 Manageability of public debt .................................................11 .....■ ...............19.0 Credit default swap spreads .................................................24 .....■ .............150.8
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................40 .....■ ...............48.5 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................41 .....■ ...............38.5 M2 to GDP ............................................................................43 .....■ ...............51.4 Private credit to GDP.............................................................37 .....■ ...............43.3 Bank deposits to GDP ...........................................................42 .....■ ...............38.5 Money market instruments to GDP .....................................n/a .........................n/a
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................1 .....■ .................6.4 Bank overhead costs...............................................................9 .....■ .................1.5 Public ownership of banks ....................................................34 .....■ ...............14.8 Bank operating costs to assets.............................................17 .....■ .................1.8 Non-performing bank loans to total loans .............................17 .....■ .................2.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................35 .....■ ...............14.1 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................11 .....■ .................2.5 IPO proceeds amount .............................................................6 .....■ .................1.3 Share of world IPOs ..............................................................18 .....■ .................1.1
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Saudi Arabia Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................54 .....■ .................0.0 M&A transaction value to GDP .............................................55 .....■ .................0.1 Share of total number of M&A deals ....................................47 .....■ .................0.1
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................43 .....■ ..........2,291.0 Insurance density ..................................................................40 .....■ ...............92.6 Real growth of direct insurance premiums.............................8 .....■ .................0.2 Insurance penetration............................................................52 .....■ .................0.0 Relative value-added of insurance to GDP............................34 .....■ .................0.7
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................46 .....■ .................0.7 Share of total number of securitization deals .......................45 .....■ .................0.1
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................28 .....■ .................0.2 Outright forward foreign exchange turnover ........................39 .....■ .................0.0 Foreign exchange swap turnover..........................................34 .....■ .................0.1
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................31 .....■ .................0.0 Interest rate derivatives turnover: Swaps .............................32 .....■ .................0.0 Interest rate derivatives turnover: Options ...........................22 .....■ .................0.1 Foreign exchange derivatives turnover: Currency swaps .....17 .....■ .................0.7 Foreign exchange derivatives turnover: Options ..................30 .....■ .................0.0
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................12 .....■ .............160.9 Stock market capitalization to GDP.......................................21 .....■ .............110.7 Stock market value traded to GDP........................................12 .....■ .............178.1 Number of listed companies per 10,000 people...................31 .....■ .................0.0
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
215 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................35 .....■ .................4.6 Venture capital availability .....................................................20 .....■ .................3.5 Ease of access to credit........................................................10 .....■ .................4.2 Financing through local equity market ..................................14 .....■ .................4.6 Ease of access to loans ........................................................13 .....■ .................4.2 Foreign direct investment to GDP ........................................20 .....■ .................6.4
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ..................................................n/a .........................n/a Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Singapore Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................4.7
US$ bn
20.4%
GDP (US$ billions), 2008 .........................................................181.9 GDP (current prices) per capita, 2008 ............................38,972.1
44.8%
GDP (PPP) as share (%) of world total, 2008 ........................0.35
10.1%
Average rate of real GDP growth (%), 2004–08....................6.77
■ ■ ■ ■
Public debt securities .......160.7 Private debt securities........80.0 Banking deposits ...............194.9 Equity securities ................353.5 Total
789.1
24.7%
Total/GDP: 472.7%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index........................................................4 5.0 1
2
3
4
5
6
7
Factors, policies, and institutions
216
1st pillar: Institutional environment ...........................................1
6.2
Financial sector liberalization ....................................................15 Corporate governance...................................................................1 Legal and regulatory issues .........................................................1 Contract enforcement....................................................................1
6.7 5.8 5.9 6.3
2nd pillar: Business environment ...............................................2
6.1
Human capital .................................................................................3 Taxes.................................................................................................8 Infrastructure ................................................................................10 Cost of doing business ..................................................................1
5.7 5.9 6.0 6.7
3rd pillar: Financial stability........................................................5
5.6
Currency stability............................................................................1 Banking system stability..............................................................12 Risk of sovereign debt crisis ......................................................32
6.4 5.7 4.8 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................11
4.7
Size index .......................................................................................12 Efficiency index...............................................................................2 Financial information disclosure................................................27
4.1 6.4 2.4
5th pillar: Non-banking financial services .............................11
3.4
IPO activity.....................................................................................12 M&A activity..................................................................................16 Insurance .........................................................................................9 Securitization.................................................................................21
3.2 3.4 4.3 2.6
6th pillar: Financial markets........................................................3
5.1
Foreign exchange markets ...........................................................4 Derivatives markets .......................................................................7 Equity market development ..........................................................2 Bond market development..........................................................24
6.5 6.2 5.6 2.9 1
Financial access 7th pillar: Financial access..........................................................9
4.2
Commercial access........................................................................2 Retail access.................................................................................13
5.1 3.3 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Singapore Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.......18 .....■ ...............52.4 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ................................2 .....■ .................5.3 Efficacy of corporate boards ...................................................7 .....■ .................5.6 Reliance on professional management ...................................7 .....■ .................6.0 Willingness to delegate.........................................................16 .....■ .................4.8 Strength of auditing and reporting standards..........................5 .....■ .................6.1 Ethical behavior of firms..........................................................4 .....■ .................6.5 Protection of minority shareholders’ interests........................5 .....■ .................5.7 Official supervisory power ......................................................4 .....■ ...............13.5 Private monitoring of the banking industry .............................2 .....■ .................8.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation ...........................................1 .....■ .................5.6 Centralization of economic policymaking ..............................51 .....■ .................2.2 Regulation of securities exchanges ........................................4 .....■ .................5.8 Property rights.........................................................................4 .....■ .................6.4 Intellectual property protection ...............................................1 .....■ .................6.2 Diversion of public funds.........................................................3 .....■ .................6.4 Public trust of politicians .........................................................1 .....■ .................6.4 Corruption perceptions index ..................................................3 .....■ .................9.2 Strength of legal rights index ..................................................1 .....■ ...............10.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .......................................1 .....■ .................6.5 Judicial independence ...........................................................15 .....■ .................5.8 Irregular payments in judicial decisions ..................................1 .....■ .................6.6 Time to enforce a contract ......................................................1 .....■ .............150.0 Number of procedures to enforce a contract .........................2 .....■ ...............21.0 Strength of investor protection ...............................................1 .....■ .................9.3 Cost of enforcing contracts...................................................32 .....■ ...............25.8
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................5 .....■ .................5.8 Quality of math and science education...................................1 .....■ .................6.4 Extent of staff training.............................................................2 .....■ .................5.6 Local availability of specialized research and training services .............................................................14 .....■ .................5.5 Brain drain and ease of hiring foreign labor ............................3 .....■ .................5.5 Tertiary enrollment ................................................................20 .....■ ...............58.6
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................1 .....■ .................6.5 Distortive effect on competition of taxes and subsidies ........2 .....■ .................6.0 Marginal tax variation ............................................................35 .....■ ...............10.1 Time to pay taxes ....................................................................7 .....■ ...............84.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................2 .....■ .................6.7 Quality of telephone infrastructure .........................................7 .....■ .................6.8 Internet users ........................................................................14 .....■ ...............68.0 Broadband Internet subscribers ............................................18 .....■ ...............20.2 Telephone lines .....................................................................19 .....■ ...............42.0 Mobile telephone subscribers.................................................5 .....■ .............133.5
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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Singapore Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business .....................................................6 .....■ .................0.7 Cost of registering property ..................................................24 .....■ .................2.8 Cost of closing a business ......................................................1 .....■ .................1.0 Time to start a business ..........................................................2 .....■ .................4.0 Time to register property.........................................................9 .....■ .................9.0 Time to close a business.........................................................3 .....■ .................0.8
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
218
Currency stability Change in real effective exchange rate.................................12 .....■ .................3.7 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP.............................................6 .....■ ...............14.8 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................3 .....■ .............128.3
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator....................................................1 .....■ .................9.0 Manageability of private debt................................................31 .....■ ...............63.7 Aggregate measure of real estate bubbles...........................37 .....■ .................3.7
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ....................................40 .....■ .................4.6 Manageability of public debt .................................................53 .....■ ...............99.2 Credit default swap spreads.................................................n/a .........................n/a
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................17 .....■ .............110.8 Central bank assets to GDP ..................................................15 .....■ .................2.7 Financial system deposits to GDP ..........................................9 .....■ .............111.4 M2 to GDP ..............................................................................8 .....■ .............129.5 Private credit to GDP.............................................................22 .....■ ...............91.9 Bank deposits to GDP ...........................................................11 .....■ .............107.9 Money market instruments to GDP......................................15 .....■ .................1.2
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................10 .....■ .................4.8 Bank overhead costs...............................................................1 .....■ .................1.0 Public ownership of banks ......................................................1 .....■ .................0.0 Bank operating costs to assets.............................................11 .....■ .................1.3 Non-performing bank loans to total loans .............................11 .....■ .................1.4
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................21 .....■ ...............48.3 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................22 .....■ .................0.8 IPO proceeds amount .............................................................9 .....■ .................1.1 Share of world IPOs ..............................................................15 .....■ .................2.0
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Singapore Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................24 .....■ .................0.6 M&A transaction value to GDP ...............................................6 .....■ ...............11.5 Share of total number of M&A deals ....................................20 .....■ .................1.0
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................28 .....■ ........14,245.0 Insurance density ..................................................................16 .....■ ..........2,790.9 Real growth of direct insurance premiums...........................12 .....■ .................0.2 Insurance penetration............................................................14 .....■ .................0.1 Relative value-added of insurance to GDP..............................2 .....■ .................3.6
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................12 .....■ .................4.0 Share of total number of securitization deals .......................27 .....■ .................0.2
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover..............................................5 .....■ .................7.0 Outright forward foreign exchange turnover ..........................4 .....■ .................5.9 Foreign exchange swap turnover............................................5 .....■ .................5.3
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................15 .....■ .................0.5 Interest rate derivatives turnover: Swaps ...............................6 .....■ .................3.5 Interest rate derivatives turnover: Options .............................9 .....■ .................0.6 Foreign exchange derivatives turnover: Currency swaps .......7 .....■ .................3.1 Foreign exchange derivatives turnover: Options ....................5 .....■ .................4.0
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................18 .....■ .............121.3 Stock market capitalization to GDP.........................................5 .....■ .............196.3 Stock market value traded to GDP..........................................6 .....■ .............238.1 Number of listed companies per 10,000 people.....................3 .....■ .................1.0
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............14 .....■ ...............23.0 Public domestic bond market capitalization to GDP ...............5 .....■ ...............55.3 Private international bonds to GDP .......................................17 .....■ ...............40.7 Public international bonds to GDP ........................................37 .....■ .................0.2
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
219 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication ...............................................7 .....■ .................6.2 Venture capital availability .......................................................3 .....■ .................4.3 Ease of access to credit........................................................21 .....■ .................3.8 Financing through local equity market ....................................6 .....■ .................4.8 Ease of access to loans ..........................................................3 .....■ .................4.6 Foreign direct investment to GDP ..........................................2 .....■ ...............14.5
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts .....................................5 .....■ ......230,508.8 Commercial bank branches...................................................35 .....■ ...............11.0 Total number of ATMs...........................................................23 .....■ ...............50.6 Total number of point of sale (POS) devices.........................11 .....■ ..........1,397.8 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Slovak Republic Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................5.4
US$ bn
8.8%
GDP (US$ billions), 2008 ...........................................................95.4 33.7%
GDP (current prices) per capita, 2008 ............................17,630.1 GDP (PPP) as share (%) of world total, 2008 ........................0.17 Average rate of real GDP growth (%), 2004–08....................7.40
■ ■ ■ ■
Public debt securities .........26.7 Private debt securities..........4.5 Banking deposits .................41.0 Equity securities ....................7.0 Total
51.8%
79.2
5.7%
Total/GDP: 105.3%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................37 3.3 1
2
3
4
5
6
7
Factors, policies, and institutions
220
1st pillar: Institutional environment .........................................34
4.1
Financial sector liberalization ....................................................38 Corporate governance.................................................................27 Legal and regulatory issues .......................................................33 Contract enforcement..................................................................31
3.6 4.7 3.7 4.3
2nd pillar: Business environment .............................................28
4.6
Human capital ...............................................................................36 Taxes...............................................................................................37 Infrastructure ................................................................................27 Cost of doing business ................................................................20
4.1 4.2 4.4 5.5
3rd pillar: Financial stability......................................................20
4.9
Currency stability..........................................................................29 Banking system stability..............................................................37 Risk of sovereign debt crisis ......................................................14
4.3 4.7 5.8 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................33
3.5
Size index .......................................................................................41 Efficiency index.............................................................................16 Financial information disclosure................................................34
2.0 5.6 2.3
5th pillar: Non-banking financial services .............................53
1.2
IPO activity.....................................................................................52 M&A activity..................................................................................52 Insurance .......................................................................................43 Securitization.................................................................................52
1.0 1.0 1.8 1.1
6th pillar: Financial markets......................................................46
1.5
Foreign exchange markets .........................................................40 Derivatives markets....................................................................n/a Equity market development ........................................................47 Bond market development..........................................................33
1.0 n/a 1.4 1.9 1
Financial access 7th pillar: Financial access........................................................33
3.3
Commercial access......................................................................33 Retail access.................................................................................26
3.8 2.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Slovak Republic Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................33 .....■ .................1.5 Commitments to WTO agreement on trade in services.......36 .....■ ...............43.9 Domestic financial sector liberalization .................................49 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................11 .....■ .................4.9 Efficacy of corporate boards .................................................16 .....■ .................5.1 Reliance on professional management .................................24 .....■ .................5.2 Willingness to delegate.........................................................19 .....■ .................4.6 Strength of auditing and reporting standards........................37 .....■ .................4.8 Ethical behavior of firms........................................................39 .....■ .................3.8 Protection of minority shareholders’ interests......................37 .....■ .................4.4 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................32 .....■ .................2.9 Centralization of economic policymaking ..............................22 .....■ .................3.5 Regulation of securities exchanges ......................................47 .....■ .................4.1 Property rights.......................................................................34 .....■ .................4.6 Intellectual property protection .............................................34 .....■ .................3.7 Diversion of public funds.......................................................45 .....■ .................3.0 Public trust of politicians .......................................................50 .....■ .................1.7 Corruption perceptions index ................................................29 .....■ .................5.0 Strength of legal rights index ..................................................4 .....■ .................9.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................40 .....■ .................3.2 Judicial independence ...........................................................43 .....■ .................3.5 Irregular payments in judicial decisions ................................30 .....■ .................4.4 Time to enforce a contract ....................................................33 .....■ .............565.0 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Strength of investor protection .............................................43 .....■ .................4.7 Cost of enforcing contracts...................................................31 .....■ ...............25.7
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................51 .....■ .................3.6 Quality of math and science education.................................29 .....■ .................4.5 Extent of staff training...........................................................33 .....■ .................4.2 Local availability of specialized research and training services .............................................................36 .....■ .................4.3 Brain drain and ease of hiring foreign labor ..........................40 .....■ .................3.8 Tertiary enrollment ................................................................33 .....■ ...............45.3
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................30 .....■ .................4.4 Distortive effect on competition of taxes and subsidies ......49 .....■ .................3.7 Marginal tax variation ............................................................39 .....■ ...............12.2 Time to pay taxes ..................................................................37 .....■ .............325.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................34 .....■ .................4.1 Quality of telephone infrastructure .......................................20 .....■ .................6.5 Internet users ........................................................................18 .....■ ...............56.0 Broadband Internet subscribers ............................................27 .....■ .................8.8 Telephone lines .....................................................................34 .....■ ...............21.3 Mobile telephone subscribers...............................................20 .....■ .............112.6
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
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2: Country/Economy Profiles
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Slovak Republic Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................17 .....■ .................3.3 Cost of registering property ....................................................2 .....■ .................0.1 Cost of closing a business ....................................................37 .....■ ...............18.0 Time to start a business ........................................................25 .....■ ...............16.0 Time to register property.......................................................15 .....■ ...............17.0 Time to close a business.......................................................41 .....■ .................4.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
222
Currency stability Change in real effective exchange rate...................................4 .....■ .................6.5 External vulnerability indicator...............................................23 .....■ .............105.8 Current account balance to GDP...........................................47 .....■ ...............–6.3 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................26 .....■ ...............58.9 Net international investment position to GDP (advanced economies).............................................................6 .....■ ...............–0.1
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................32 .....■ .................1.5 Financial strengths indicator..................................................37 .....■ .................4.0 Manageability of private debt................................................16 .....■ .................7.0 Aggregate measure of real estate bubbles...........................33 .....■ .................4.2
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................24 .....■ ...............16.0 Foreign currency sovereign rating.........................................22 .....■ ...............16.0 Aggregate macroprudential indicator ......................................2 .....■ .................6.3 Manageability of public debt .................................................15 .....■ ...............28.7 Credit default swap spreads .................................................16 .....■ ...............91.8
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................37 .....■ ...............52.6 Central bank assets to GDP ..................................................44 .....■ .................0.0 Financial system deposits to GDP ........................................38 .....■ ...............48.2 M2 to GDP ............................................................................36 .....■ ...............58.3 Private credit to GDP.............................................................39 .....■ ...............38.6 Bank deposits to GDP ...........................................................38 .....■ ...............48.2 Money market instruments to GDP .....................................n/a .........................n/a
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................11 .....■ .................4.7 Bank overhead costs.............................................................25 .....■ .................2.5 Public ownership of banks ......................................................1 .....■ .................0.0 Bank operating costs to assets.............................................34 .....■ .................3.3 Non-performing bank loans to total loans .............................30 .....■ .................2.9
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................25 .....■ ...............39.9 Public credit registry coverage ..............................................18 .....■ .................1.4
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................52 .....■ .................0.0 IPO proceeds amount ...........................................................52 .....■ .................0.0 Share of world IPOs ..............................................................50 .....■ .................0.0
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Slovak Republic Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................52 .....■ .................0.0 M&A transaction value to GDP .............................................52 .....■ .................1.0 Share of total number of M&A deals ....................................45 .....■ .................0.1
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................42 .....■ ..........2,323.0 Insurance density ..................................................................27 .....■ .............432.9 Real growth of direct insurance premiums...........................33 .....■ .................0.0 Insurance penetration............................................................32 .....■ .................0.0 Relative value-added of insurance to GDP............................33 .....■ .................0.7
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................50 .....■ .................0.3 Share of total number of securitization deals .......................41 .....■ .................0.1
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................43 .....■ .................0.0 Outright forward foreign exchange turnover ........................42 .....■ .................0.0 Foreign exchange swap turnover..........................................30 .....■ .................0.1
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options ..................33 .....■ .................0.0
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................55 .....■ .................0.5 Stock market capitalization to GDP.......................................53 .....■ .................8.4 Stock market value traded to GDP........................................55 .....■ .................0.0 Number of listed companies per 10,000 people...................16 .....■ .................0.3
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............23 .....■ .................6.2 Public domestic bond market capitalization to GDP .............24 .....■ ...............33.6 Private international bonds to GDP .......................................41 .....■ .................0.8 Public international bonds to GDP ........................................16 .....■ .................7.0
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
223 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................30 .....■ .................5.0 Venture capital availability .....................................................30 .....■ .................3.2 Ease of access to credit..........................................................6 .....■ .................4.6 Financing through local equity market ..................................49 .....■ .................3.1 Ease of access to loans ........................................................15 .....■ .................4.0 Foreign direct investment to GDP ........................................27 .....■ .................4.3
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches...................................................11 .....■ ...............25.7 Total number of ATMs...........................................................25 .....■ ...............47.8 Total number of point of sale (POS) devices.........................22 .....■ .............460.3 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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South Africa Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................48.7
US$ bn
7.5% 6.2%
GDP (US$ billions), 2008 .........................................................277.2 GDP (current prices) per capita, 2008 ..............................5,693.3
16.2%
GDP (PPP) as share (%) of world total, 2008 ........................0.72 Average rate of real GDP growth (%), 2004–08....................4.66
■ ■ ■ ■
Public debt securities .........89.6 Private debt securities........74.0 Banking deposits ...............192.2 Equity securities ................833.5 Total
70.1%
1,189.4
Total/GDP: 419.7%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................32 3.5 1
2
3
4
5
6
7
Factors, policies, and institutions
224
1st pillar: Institutional environment .........................................27
4.4
Financial sector liberalization ....................................................41 Corporate governance...................................................................7 Legal and regulatory issues .......................................................22 Contract enforcement..................................................................23
3.1 5.4 4.4 4.8
2nd pillar: Business environment .............................................36
4.2
Human capital ...............................................................................50 Taxes...............................................................................................18 Infrastructure ................................................................................48 Cost of doing business ................................................................34
3.5 5.3 2.9 5.0
3rd pillar: Financial stability......................................................31
4.7
Currency stability..........................................................................39 Banking system stability..............................................................17 Risk of sovereign debt crisis ......................................................36
3.9 5.5 4.3 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................30
3.7
Size index .......................................................................................29 Efficiency index.............................................................................29 Financial information disclosure................................................25
2.9 5.0 2.9
5th pillar: Non-banking financial services .............................32
2.1
IPO activity.....................................................................................45 M&A activity..................................................................................23 Insurance .......................................................................................15 Securitization.................................................................................32
1.3 2.1 3.2 1.9
6th pillar: Financial markets......................................................30
2.4
Foreign exchange markets .........................................................22 Derivatives markets .....................................................................20 Equity market development ........................................................18 Bond market development..........................................................35
1.3 2.5 3.7 1.7 1
Financial access 7th pillar: Financial access........................................................47
2.9
Commercial access......................................................................28 Retail access.................................................................................43
3.9 1.9 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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South Africa Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–1.1 Commitments to WTO agreement on trade in services.......40 .....■ ...............28.4 Domestic financial sector liberalization .................................24 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................10 .....■ .................5.0 Efficacy of corporate boards ...................................................2 .....■ .................5.8 Reliance on professional management .................................17 .....■ .................5.5 Willingness to delegate.........................................................20 .....■ .................4.5 Strength of auditing and reporting standards..........................1 .....■ .................6.2 Ethical behavior of firms........................................................26 .....■ .................4.7 Protection of minority shareholders’ interests........................7 .....■ .................5.5 Official supervisory power ....................................................22 .....■ ...............10.5 Private monitoring of the banking industry .............................1 .....■ .................9.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................23 .....■ .................3.2 Centralization of economic policymaking ..............................41 .....■ .................2.7 Regulation of securities exchanges ........................................2 .....■ .................5.9 Property rights.......................................................................15 .....■ .................5.9 Intellectual property protection .............................................20 .....■ .................5.2 Diversion of public funds.......................................................30 .....■ .................3.7 Public trust of politicians .......................................................33 .....■ .................2.8 Corruption perceptions index ................................................30 .....■ .................4.9 Strength of legal rights index ..................................................4 .....■ .................9.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................18 .....■ .................4.3 Judicial independence ...........................................................24 .....■ .................5.0 Irregular payments in judicial decisions ................................29 .....■ .................4.4 Time to enforce a contract ....................................................38 .....■ .............600.0 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Strength of investor protection ...............................................8 .....■ .................8.0 Cost of enforcing contracts...................................................47 .....■ ...............33.2
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................23 .....■ .................4.8 Quality of math and science education.................................55 .....■ .................2.1 Extent of staff training...........................................................17 .....■ .................4.8 Local availability of specialized research and training services .............................................................28 .....■ .................4.6 Brain drain and ease of hiring foreign labor ..........................53 .....■ .................3.1 Tertiary enrollment ................................................................50 .....■ ...............15.4
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................28 .....■ .................4.4 Distortive effect on competition of taxes and subsidies ........6 .....■ .................5.1 Marginal tax variation ............................................................19 .....■ .................3.5 Time to pay taxes ..................................................................24 .....■ .............200.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................27 .....■ .................4.7 Quality of telephone infrastructure .......................................53 .....■ .................4.6 Internet users ........................................................................50 .....■ .................8.2 Broadband Internet subscribers ............................................48 .....■ .................0.8 Telephone lines .....................................................................49 .....■ .................9.6 Mobile telephone subscribers...............................................34 .....■ ...............87.1
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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South Africa Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................26 .....■ .................6.0 Cost of registering property ..................................................48 .....■ .................8.8 Cost of closing a business ....................................................37 .....■ ...............18.0 Time to start a business ........................................................31 .....■ ...............22.0 Time to register property.......................................................22 .....■ ...............24.0 Time to close a business.......................................................23 .....■ .................2.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
226
Currency stability Change in real effective exchange rate.................................53 .....■ .............–10.9 External vulnerability indicator...............................................21 .....■ ...............88.3 Current account balance to GDP...........................................49 .....■ ...............–7.4 Dollarization vulnerability indicator ........................................28 .....■ ...............10.2 External debt to GDP (developing economies) .......................9 .....■ ...............26.6 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator..................................................19 .....■ .................6.0 Manageability of private debt................................................28 .....■ ...............29.9 Aggregate measure of real estate bubbles...........................30 .....■ .................4.5
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................31 .....■ ...............15.7 Foreign currency sovereign rating.........................................33 .....■ ...............12.7 Aggregate macroprudential indicator ....................................48 .....■ .................3.9 Manageability of public debt .................................................18 .....■ ...............31.6 Credit default swap spreads .................................................31 .....■ .............225.5
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................24 .....■ ...............83.5 Central bank assets to GDP ..................................................32 .....■ .................0.7 Financial system deposits to GDP ........................................25 .....■ ...............61.4 M2 to GDP ............................................................................29 .....■ ...............66.8 Private credit to GDP...............................................................9 .....■ .............155.4 Bank deposits to GDP ...........................................................25 .....■ ...............61.4 Money market instruments to GDP......................................27 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................24 .....■ .................4.2 Bank overhead costs.............................................................46 .....■ .................4.6 Public ownership of banks ....................................................14 .....■ .................1.9 Bank operating costs to assets.............................................37 .....■ .................3.8 Non-performing bank loans to total loans .............................27 .....■ .................2.6
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................18 .....■ ...............64.8 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................42 .....■ .................0.2 IPO proceeds amount ...........................................................44 .....■ .................0.2 Share of world IPOs ..............................................................39 .....■ .................0.2
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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South Africa Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................25 .....■ .................0.5 M&A transaction value to GDP .............................................14 .....■ .................5.4 Share of total number of M&A deals ....................................29 .....■ .................0.5
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................17 .....■ ........42,775.0 Insurance density ..................................................................24 .....■ .............880.6 Real growth of direct insurance premiums...........................45 .....■ .................0.0 Insurance penetration..............................................................2 .....■ .................0.2 Relative value-added of insurance to GDP............................14 .....■ .................1.8
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................24 .....■ .................2.2 Share of total number of securitization deals .......................32 .....■ .................0.2
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................26 .....■ .................0.3 Outright forward foreign exchange turnover ........................23 .....■ .................0.2 Foreign exchange swap turnover..........................................22 .....■ .................0.4
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................13 .....■ .................0.7 Interest rate derivatives turnover: Swaps .............................23 .....■ .................0.1 Interest rate derivatives turnover: Options ...........................14 .....■ .................0.3 Foreign exchange derivatives turnover: Currency swaps .....29 .....■ .................0.1 Foreign exchange derivatives turnover: Options ..................31 .....■ .................0.0
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................38 .....■ ...............54.6 Stock market capitalization to GDP.........................................3 .....■ .............280.8 Stock market value traded to GDP........................................14 .....■ .............153.4 Number of listed companies per 10,000 people...................21 .....■ .................0.1
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............18 .....■ ...............19.2 Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP .......................................24 .....■ ...............12.8 Public international bonds to GDP ........................................23 .....■ .................3.6
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
227 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication ...............................................5 .....■ .................6.3 Venture capital availability .....................................................25 .....■ .................3.4 Ease of access to credit........................................................37 .....■ .................3.0 Financing through local equity market ....................................3 .....■ .................4.9 Ease of access to loans ........................................................20 .....■ .................3.7 Foreign direct investment to GDP ........................................45 .....■ .................2.0
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................22 .....■ ........78,813.0 Commercial bank branches...................................................39 .....■ .................8.0 Total number of ATMs...........................................................20 .....■ ...............54.8 Total number of point of sale (POS) devices.........................36 .....■ .................1.0 MFI borrowers’ penetration rate ...........................................13 .....■ .................4.1
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Spain Key indicators
Financial assets by major type, 2007 7.5%
Population (millions), 2008 .......................................................45.6
US$ bn
26.0%
GDP (US$ billions), 2008 ......................................................1,611.8 GDP (current prices) per capita, 2008 ............................35,331.5 GDP (PPP) as share (%) of world total, 2008 ........................2.03
37.5%
Average rate of real GDP growth (%), 2004–08....................3.12
■ ■ ■ ■
Public debt securities .......520.1 Private debt securities...2,597.4 Banking deposits ............2,017.8 Equity securities .............1,800.1 Total
6,935.3
29.1%
Total/GDP: 481.6%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................15 4.4 1
2
3
4
5
6
7
Factors, policies, and institutions
228
1st pillar: Institutional environment .........................................19
5.1
Financial sector liberalization ....................................................10 Corporate governance.................................................................24 Legal and regulatory issues .......................................................23 Contract enforcement..................................................................27
7.0 4.7 4.3 4.5
2nd pillar: Business environment .............................................23
4.9
Human capital ...............................................................................21 Taxes...............................................................................................24 Infrastructure ................................................................................20 Cost of doing business ................................................................35
4.7 4.9 5.2 5.0
3rd pillar: Financial stability......................................................32
4.7
Currency stability..........................................................................41 Banking system stability..............................................................42 Risk of sovereign debt crisis ......................................................17
3.8 4.5 5.7 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services........................................4
5.1
Size index .........................................................................................6 Efficiency index.............................................................................12 Financial information disclosure................................................17
5.1 5.8 3.6
5th pillar: Non-banking financial services .............................13
3.3
IPO activity.....................................................................................19 M&A activity..................................................................................11 Insurance .......................................................................................35 Securitization...................................................................................9
2.6 4.0 2.3 4.2
6th pillar: Financial markets......................................................14
3.8
Foreign exchange markets .........................................................21 Derivatives markets .....................................................................17 Equity market development ..........................................................6 Bond market development............................................................8
1.4 3.3 5.1 4.5 1
Financial access 7th pillar: Financial access........................................................18
4.0
Commercial access......................................................................38 Retail access...................................................................................8
3.4 4.5 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Spain Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................21 .....■ .................1.7 Commitments to WTO agreement on trade in services.........1 .....■ ...............72.8 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................35 .....■ .................4.4 Efficacy of corporate boards .................................................28 .....■ .................4.7 Reliance on professional management .................................28 .....■ .................5.0 Willingness to delegate.........................................................34 .....■ .................4.1 Strength of auditing and reporting standards........................33 .....■ .................5.0 Ethical behavior of firms........................................................25 .....■ .................4.9 Protection of minority shareholders’ interests......................36 .....■ .................4.4 Official supervisory power ....................................................18 .....■ ...............11.5 Private monitoring of the banking industry .............................2 .....■ .................8.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................37 .....■ .................2.7 Centralization of economic policymaking ................................3 .....■ .................4.8 Regulation of securities exchanges ......................................40 .....■ .................4.3 Property rights.......................................................................27 .....■ .................5.1 Intellectual property protection .............................................25 .....■ .................4.3 Diversion of public funds.......................................................24 .....■ .................4.6 Public trust of politicians .......................................................29 .....■ .................3.2 Corruption perceptions index ................................................20 .....■ .................6.5 Strength of legal rights index ................................................29 .....■ .................6.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................27 .....■ .................3.9 Judicial independence ...........................................................34 .....■ .................4.1 Irregular payments in judicial decisions ................................24 .....■ .................5.1 Time to enforce a contract ....................................................31 .....■ .............515.0 Number of procedures to enforce a contract .......................41 .....■ ...............39.0 Strength of investor protection .............................................38 .....■ .................5.0 Cost of enforcing contracts...................................................17 .....■ ...............17.2
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................6 .....■ .................5.8 Quality of math and science education.................................45 .....■ .................3.3 Extent of staff training...........................................................40 .....■ .................3.9 Local availability of specialized research and training services .............................................................22 .....■ .................4.8 Brain drain and ease of hiring foreign labor ..........................21 .....■ .................4.4 Tertiary enrollment ................................................................11 .....■ ...............67.4
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................25 .....■ .................5.0 Distortive effect on competition of taxes and subsidies ......40 .....■ .................4.0 Marginal tax variation ............................................................28 .....■ .................7.8 Time to pay taxes ..................................................................27 .....■ .............234.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................20 .....■ .................5.2 Quality of telephone infrastructure .......................................38 .....■ .................5.9 Internet users ........................................................................22 .....■ ...............52.0 Broadband Internet subscribers ............................................22 .....■ ...............18.2 Telephone lines .....................................................................13 .....■ ...............45.9 Mobile telephone subscribers...............................................24 .....■ .............109.4
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
229
2: Country/Economy Profiles
Part 1.r3
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Spain Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................39 .....■ ...............14.9 Cost of registering property ..................................................44 .....■ .................7.2 Cost of closing a business ....................................................30 .....■ ...............15.0 Time to start a business ........................................................48 .....■ ...............47.0 Time to register property.......................................................18 .....■ ...............18.0 Time to close a business.........................................................8 .....■ .................1.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
230
Currency stability Change in real effective exchange rate.................................16 .....■ .................3.2 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................53 .....■ ...............–9.6 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................12 .....■ ...............–1.0
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................15 .....■ .................0.5 Financial strengths indicator..................................................10 .....■ .................8.0 Manageability of private debt ...............................................n/a .........................n/a Aggregate measure of real estate bubbles...........................44 .....■ .................1.0
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................15 .....■ ...............19.1 Foreign currency sovereign rating.........................................15 .....■ ...............19.1 Aggregate macroprudential indicator ....................................28 .....■ .................5.0 Manageability of public debt .................................................30 .....■ ...............40.4 Credit default swap spreads .................................................17 .....■ .............104.3
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .......................................5 .....■ .............179.6 Central bank assets to GDP ..................................................23 .....■ .................1.5 Financial system deposits to GDP ..........................................6 .....■ .............121.5 M2 to GDP ..............................................................................3 .....■ .............153.3 Private credit to GDP...............................................................7 .....■ .............168.7 Bank deposits to GDP .............................................................7 .....■ .............121.5 Money market instruments to GDP......................................13 .....■ .................2.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................25 .....■ .................4.1 Bank overhead costs...............................................................7 .....■ .................1.4 Public ownership of banks ....................................................15 .....■ .................2.0 Bank operating costs to assets.............................................22 .....■ .................2.0 Non-performing bank loans to total loans .............................35 .....■ .................3.2
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................39 .....■ .................8.1 Public credit registry coverage ................................................4 .....■ ...............45.8
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................8 .....■ .................3.1 IPO proceeds amount ...........................................................18 .....■ .................0.5 Share of world IPOs ..............................................................25 .....■ .................0.6
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Spain Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................10 .....■ .................2.7 M&A transaction value to GDP .............................................13 .....■ .................6.0 Share of total number of M&A deals ......................................9 .....■ .................2.5
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................11 .....■ ........74,696.0 Insurance density ..................................................................21 .....■ ..........1,699.9 Real growth of direct insurance premiums...........................40 .....■ .................0.0 Insurance penetration............................................................22 .....■ .................0.1 Relative value-added of insurance to GDP............................43 .....■ .................0.5
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ..............................................................8 .....■ .................5.5 Share of total number of securitization deals .......................12 .....■ .................1.2
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................19 .....■ .................0.5 Outright forward foreign exchange turnover ........................18 .....■ .................0.5 Foreign exchange swap turnover..........................................23 .....■ .................0.4
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................21 .....■ .................0.2 Interest rate derivatives turnover: Swaps .............................13 .....■ .................1.0 Interest rate derivatives turnover: Options ...........................15 .....■ .................0.3 Foreign exchange derivatives turnover: Currency swaps .....20 .....■ .................0.3 Foreign exchange derivatives turnover: Options ..................17 .....■ .................0.3
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio.....................................................6 .....■ .............188.7 Stock market capitalization to GDP.......................................22 .....■ .............109.8 Stock market value traded to GDP........................................10 .....■ .............207.3 Number of listed companies per 10,000 people.....................6 .....■ .................0.8
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP .............22 .....■ ...............36.5 Private international bonds to GDP .........................................2 .....■ .............171.7 Public international bonds to GDP ........................................11 .....■ ...............11.5
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
231 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................21 .....■ .................5.6 Venture capital availability .....................................................33 .....■ .................3.1 Ease of access to credit........................................................53 .....■ .................2.5 Financing through local equity market ..................................44 .....■ .................3.8 Ease of access to loans ........................................................41 .....■ .................2.9 Foreign direct investment to GDP ........................................33 .....■ .................3.7
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................26 .....■ ........74,140.1 Commercial bank branches.....................................................4 .....■ ...............40.5 Total number of ATMs.............................................................4 .....■ .............157.1 Total number of point of sale (POS) devices.........................16 .....■ .............959.2 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Sweden Key indicators
Financial assets by major type, 2007 12.2%
Population (millions), 2008 .........................................................9.2
US$ bn
GDP (US$ billions), 2008 .........................................................484.6 39.5%
GDP (current prices) per capita, 2008 ............................52,789.6 GDP (PPP) as share (%) of world total, 2008 ........................0.50
31.9%
Average rate of real GDP growth (%), 2004–08....................2.80
■ ■ ■ ■
Public debt securities .......189.4 Private debt securities......494.6 Banking deposits ...............254.4 Equity securities ................612.5 Total
1,550.9
16.4%
Total/GDP: 341.7%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................14 4.5 1
2
3
4
5
6
7
Factors, policies, and institutions
232
1st pillar: Institutional environment ...........................................4
5.9
Financial sector liberalization ......................................................1 Corporate governance...................................................................5 Legal and regulatory issues .........................................................5 Contract enforcement..................................................................14
7.0 5.6 5.5 5.4
2nd pillar: Business environment ...............................................5
5.9
Human capital .................................................................................5 Taxes...............................................................................................17 Infrastructure ..................................................................................2 Cost of doing business ................................................................10
5.6 5.5 6.5 6.1
3rd pillar: Financial stability......................................................18
5.1
Currency stability..........................................................................23 Banking system stability..............................................................32 Risk of sovereign debt crisis ........................................................8
4.4 4.9 6.0 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................13
4.6
Size index .......................................................................................20 Efficiency index.............................................................................10 Financial information disclosure..................................................3
3.6 5.9 4.0
5th pillar: Non-banking financial services .............................22
2.7
IPO activity.....................................................................................36 M&A activity..................................................................................12 Insurance .......................................................................................14 Securitization.................................................................................28
1.6 3.7 3.2 2.1
6th pillar: Financial markets......................................................16
3.6
Foreign exchange markets .........................................................16 Derivatives markets .....................................................................15 Equity market development ........................................................12 Bond market development..........................................................12
1.8 4.2 4.4 3.8 1
Financial access 7th pillar: Financial access........................................................26
3.6
Commercial access......................................................................11 Retail access.................................................................................21
4.3 2.9 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:23 PM
Page 233
Sweden Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................1.7 Commitments to WTO agreement on trade in services.........1 .....■ ...............77.4 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................15 .....■ .................4.7 Efficacy of corporate boards ...................................................1 .....■ .................5.9 Reliance on professional management ...................................1 .....■ .................6.5 Willingness to delegate...........................................................1 .....■ .................6.2 Strength of auditing and reporting standards..........................3 .....■ .................6.1 Ethical behavior of firms..........................................................1 .....■ .................6.7 Protection of minority shareholders’ interests........................1 .....■ .................6.0 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ...........................22 .....■ .................6.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation ...........................................8 .....■ .................4.0 Centralization of economic policymaking ..............................19 .....■ .................3.7 Regulation of securities exchanges ........................................1 .....■ .................5.9 Property rights.........................................................................5 .....■ .................6.4 Intellectual property protection ...............................................2 .....■ .................6.1 Diversion of public funds.........................................................2 .....■ .................6.5 Public trust of politicians .........................................................4 .....■ .................5.8 Corruption perceptions index ..................................................1 .....■ .................9.3 Strength of legal rights index ................................................36 .....■ .................5.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .......................................3 .....■ .................5.6 Judicial independence .............................................................1 .....■ .................6.6 Irregular payments in judicial decisions ..................................2 .....■ .................6.5 Time to enforce a contract ....................................................28 .....■ .............508.0 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Strength of investor protection .............................................25 .....■ .................5.7 Cost of enforcing contracts...................................................43 .....■ ...............31.3
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................11 .....■ .................5.4 Quality of math and science education.................................21 .....■ .................4.8 Extent of staff training.............................................................1 .....■ .................5.7 Local availability of specialized research and training services ...............................................................7 .....■ .................5.8 Brain drain and ease of hiring foreign labor ..........................12 .....■ .................4.9 Tertiary enrollment ..................................................................5 .....■ ...............79.0
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................2 .....■ .................6.5 Distortive effect on competition of taxes and subsidies ......10 .....■ .................4.9 Marginal tax variation ............................................................37 .....■ ...............11.5 Time to pay taxes ..................................................................14 .....■ .............122.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................9 .....■ .................6.2 Quality of telephone infrastructure .........................................6 .....■ .................6.8 Internet users ..........................................................................4 .....■ ...............80.0 Broadband Internet subscribers ..............................................2 .....■ ...............36.0 Telephone lines .......................................................................3 .....■ ...............60.4 Mobile telephone subscribers...............................................19 .....■ .............113.7
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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2: Country/Economy Profiles
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Sweden Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business .....................................................4 .....■ .................0.6 Cost of registering property ..................................................26 .....■ .................3.0 Cost of closing a business ....................................................20 .....■ .................9.0 Time to start a business ........................................................23 .....■ ...............15.0 Time to register property.........................................................1 .....■ .................2.0 Time to close a business.......................................................23 .....■ .................2.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
234
Currency stability Change in real effective exchange rate.................................28 .....■ .................1.1 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................12 .....■ .................8.3 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................17 .....■ ...............–6.8
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................23 .....■ .................1.3 Financial strengths indicator..................................................10 .....■ .................8.0 Manageability of private debt................................................39 .....■ .............148.5 Aggregate measure of real estate bubbles ..........................n/a .........................n/a
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ....................................33 .....■ .................4.8 Manageability of public debt .................................................23 .....■ ...............36.7 Credit default swap spreads .................................................14 .....■ ...............88.3
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................11 .....■ .............124.5 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................36 .....■ ...............49.2 M2 to GDP ............................................................................33 .....■ ...............59.3 Private credit to GDP.............................................................11 .....■ .............115.7 Bank deposits to GDP ...........................................................36 .....■ ...............49.2 Money market instruments to GDP........................................4 .....■ .................7.5
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................33 .....■ .................3.8 Bank overhead costs.............................................................21 .....■ .................2.2 Public ownership of banks ....................................................25 .....■ .................6.8 Bank operating costs to assets...............................................3 .....■ .................0.9 Non-performing bank loans to total loans ...............................7 .....■ .................1.0
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....■ .............100.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................29 .....■ .................0.5 IPO proceeds amount ...........................................................35 .....■ .................0.2 Share of world IPOs ..............................................................22 .....■ .................0.7
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Sweden Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................13 .....■ .................1.3 M&A transaction value to GDP .............................................10 .....■ .................9.6 Share of total number of M&A deals ....................................14 .....■ .................2.0
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................19 .....■ ........33,874.0 Insurance density ..................................................................11 .....■ ..........3,730.2 Real growth of direct insurance premiums...........................25 .....■ .................0.1 Insurance penetration............................................................15 .....■ .................0.1 Relative value-added of insurance to GDP............................26 .....■ .................1.0
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................19 .....■ .................2.7 Share of total number of securitization deals .......................31 .....■ .................0.2
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................18 .....■ .................0.6 Outright forward foreign exchange turnover ........................20 .....■ .................0.4 Foreign exchange swap turnover..........................................12 .....■ .................1.5
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements .............................................................................5 .....■ .................2.6 Interest rate derivatives turnover: Swaps .............................21 .....■ .................0.1 Interest rate derivatives turnover: Options ...........................10 .....■ .................0.5 Foreign exchange derivatives turnover: Currency swaps .....32 .....■ .................0.1 Foreign exchange derivatives turnover: Options ..................13 .....■ .................0.7
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................11 .....■ .............162.2 Stock market capitalization to GDP.......................................11 .....■ .............134.4 Stock market value traded to GDP..........................................9 .....■ .............218.0 Number of listed companies per 10,000 people...................15 .....■ .................0.3
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP..............7 .....■ ...............70.1 Public domestic bond market capitalization to GDP .............23 .....■ ...............35.9 Private international bonds to GDP .......................................11 .....■ ...............78.0 Public international bonds to GDP ........................................19 .....■ .................6.0
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
235 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication ...............................................3 .....■ .................6.4 Venture capital availability .......................................................4 .....■ .................4.3 Ease of access to credit........................................................44 .....■ .................2.9 Financing through local equity market ..................................13 .....■ .................4.7 Ease of access to loans ..........................................................8 .....■ .................4.4 Foreign direct investment to GDP ........................................25 .....■ .................4.6
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches...................................................15 .....■ ...............22.8 Total number of ATMs...........................................................33 .....■ ...............36.9 Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Switzerland Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................7.3
US$ bn
7.2%
GDP (US$ billions), 2008 .........................................................492.6 20.1%
GDP (current prices) per capita, 2008 ............................67,384.5 GDP (PPP) as share (%) of world total, 2008 ........................0.45
48.8%
Average rate of real GDP growth (%), 2004–08....................2.68
■ ■ ■ ■
Public debt securities .......187.3 Private debt securities......526.6 Banking deposits ...............625.6 Equity securities .............1,274.5 Total
2,614.1
23.9%
Total/GDP: 612.1%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index........................................................7 4.9 1
2
3
4
5
6
7
Factors, policies, and institutions
236
1st pillar: Institutional environment ...........................................7
5.7
Financial sector liberalization ....................................................19 Corporate governance...................................................................8 Legal and regulatory issues .........................................................2 Contract enforcement..................................................................18
6.5 5.3 5.9 5.2
2nd pillar: Business environment ...............................................7
5.8
Human capital .................................................................................6 Taxes...............................................................................................22 Infrastructure ..................................................................................1 Cost of doing business ................................................................11
5.6 5.2 6.6 6.1
3rd pillar: Financial stability........................................................2
5.7
Currency stability............................................................................6 Banking system stability..............................................................26 Risk of sovereign debt crisis ........................................................2
5.7 5.1 6.3 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................14
4.6
Size index .........................................................................................5 Efficiency index.............................................................................22 Financial information disclosure................................................40
5.2 5.3 1.7
5th pillar: Non-banking financial services .............................16
3.2
IPO activity.....................................................................................26 M&A activity....................................................................................9 Insurance .........................................................................................5 Securitization.................................................................................33
2.0 4.3 4.6 1.9
6th pillar: Financial markets........................................................4
5.0
Foreign exchange markets ...........................................................5 Derivatives markets .....................................................................14 Equity market development ..........................................................3 Bond market development..........................................................13
6.2 4.8 5.5 3.7 1
Financial access 7th pillar: Financial access..........................................................8
4.5
Commercial access........................................................................6 Retail access...................................................................................9
4.6 4.3 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Switzerland Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................1.7 Commitments to WTO agreement on trade in services.........1 .....■ ...............56.3 Domestic financial sector liberalization .................................29 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ................................7 .....■ .................5.0 Efficacy of corporate boards .................................................11 .....■ .................5.3 Reliance on professional management ...................................9 .....■ .................5.9 Willingness to delegate...........................................................7 .....■ .................5.3 Strength of auditing and reporting standards........................13 .....■ .................5.7 Ethical behavior of firms..........................................................5 .....■ .................6.4 Protection of minority shareholders’ interests......................25 .....■ .................4.9 Official supervisory power ......................................................1 .....■ ...............14.0 Private monitoring of the banking industry ...........................22 .....■ .................6.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation ...........................................4 .....■ .................4.3 Centralization of economic policymaking ................................1 .....■ .................5.7 Regulation of securities exchanges ........................................3 .....■ .................5.8 Property rights.........................................................................1 .....■ .................6.5 Intellectual property protection ...............................................4 .....■ .................6.1 Diversion of public funds.........................................................5 .....■ .................6.1 Public trust of politicians .........................................................6 .....■ .................5.6 Corruption perceptions index ..................................................4 .....■ .................9.0 Strength of legal rights index ................................................11 .....■ .................8.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .......................................9 .....■ .................4.9 Judicial independence .............................................................6 .....■ .................6.4 Irregular payments in judicial decisions ................................10 .....■ .................6.0 Time to enforce a contract ....................................................21 .....■ .............417.0 Number of procedures to enforce a contract .......................20 .....■ ...............32.0 Strength of investor protection .............................................53 .....■ .................3.0 Cost of enforcing contracts...................................................28 .....■ ...............24.0
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................1 .....■ .................6.1 Quality of math and science education...................................4 .....■ .................5.7 Extent of staff training.............................................................3 .....■ .................5.6 Local availability of specialized research and training services ...............................................................1 .....■ .................6.3 Brain drain and ease of hiring foreign labor ............................2 .....■ .................5.6 Tertiary enrollment ................................................................31 .....■ ...............45.8
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................9 .....■ .................6.0 Distortive effect on competition of taxes and subsidies ......14 .....■ .................4.8 Marginal tax variation ............................................................47 .....■ ...............16.1 Time to pay taxes ....................................................................3 .....■ ...............63.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................1 .....■ .................6.8 Quality of telephone infrastructure .........................................4 .....■ .................6.9 Internet users ..........................................................................6 .....■ ...............77.0 Broadband Internet subscribers ..............................................4 .....■ ...............31.8 Telephone lines .......................................................................1 .....■ ...............65.9 Mobile telephone subscribers...............................................23 .....■ .............109.7
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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Switzerland Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................14 .....■ .................2.1 Cost of registering property ....................................................5 .....■ .................0.4 Cost of closing a business ......................................................5 .....■ .................4.0 Time to start a business ........................................................29 .....■ ...............20.0 Time to register property.......................................................14 .....■ ...............16.0 Time to close a business.......................................................34 .....■ .................3.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
238
Currency stability Change in real effective exchange rate.................................31 .....■ .................0.6 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................11 .....■ .................9.1 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................2 .....■ .............138.5
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator..................................................10 .....■ .................8.0 Manageability of private debt................................................41 .....■ .............176.1 Aggregate measure of real estate bubbles...........................24 .....■ .................5.0
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ......................................8 .....■ .................5.7 Manageability of public debt .................................................32 .....■ ...............40.9 Credit default swap spreads .................................................10 .....■ ...............65.0
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .......................................4 .....■ .............181.4 Central bank assets to GDP ..................................................24 .....■ .................1.4 Financial system deposits to GDP ..........................................3 .....■ .............158.1 M2 to GDP ..............................................................................4 .....■ .............145.3 Private credit to GDP...............................................................6 .....■ .............170.4 Bank deposits to GDP .............................................................5 .....■ .............136.0 Money market instruments to GDP......................................19 .....■ .................0.1
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................17 .....■ .................4.5 Bank overhead costs.............................................................43 .....■ .................4.4 Public ownership of banks ....................................................28 .....■ .................8.2 Bank operating costs to assets.............................................14 .....■ .................1.6 Non-performing bank loans to total loans ............................n/a .........................n/a
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................33 .....■ ...............22.5 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................20 .....■ .................0.9 IPO proceeds amount ...........................................................21 .....■ .................0.4 Share of world IPOs ..............................................................24 .....■ .................0.7
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Switzerland Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................11 .....■ .................2.1 M&A transaction value to GDP ...............................................2 .....■ ...............15.4 Share of total number of M&A deals ....................................19 .....■ .................1.1
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................16 .....■ ........43,313.0 Insurance density ....................................................................4 .....■ ..........5,705.5 Real growth of direct insurance premiums...........................42 .....■ .................0.0 Insurance penetration..............................................................8 .....■ .................0.1 Relative value-added of insurance to GDP..............................4 .....■ .................3.2
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................27 .....■ .................2.1 Share of total number of securitization deals .......................28 .....■ .................0.2
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover..............................................3 .....■ .................8.5 Outright forward foreign exchange turnover ..........................6 .....■ .................4.0 Foreign exchange swap turnover............................................4 .....■ .................5.3
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements .............................................................................6 .....■ .................1.8 Interest rate derivatives turnover: Swaps ...............................5 .....■ .................3.5 Interest rate derivatives turnover: Options ...........................26 .....■ .................0.0 Foreign exchange derivatives turnover: Currency swaps .....24 .....■ .................0.2 Foreign exchange derivatives turnover: Options ....................3 .....■ .................4.7
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................14 .....■ .............141.9 Stock market capitalization to GDP.........................................2 .....■ .............301.5 Stock market value traded to GDP..........................................2 .....■ .............427.9 Number of listed companies per 10,000 people...................13 .....■ .................0.3
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP..............8 .....■ ...............44.8 Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP .........................................5 .....■ .............130.2 Public international bonds to GDP ........................................36 .....■ .................0.4
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
239 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication ...............................................1 .....■ .................6.6 Venture capital availability .....................................................18 .....■ .................3.6 Ease of access to credit........................................................30 .....■ .................3.5 Financing through local equity market ..................................17 .....■ .................4.6 Ease of access to loans ........................................................21 .....■ .................3.7 Foreign direct investment to GDP ..........................................9 .....■ .................9.5
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ..................................................n/a .........................n/a Total number of ATMs...........................................................10 .....■ ...............93.7 Total number of point of sale (POS) devices...........................6 .....■ ..........2,182.7 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Thailand Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................66.4
US$ bn
16.1%
GDP (US$ billions), 2008 .........................................................273.2
34.1%
GDP (current prices) per capita, 2008 ..............................4,115.3
9.1%
GDP (PPP) as share (%) of world total, 2008 ........................0.80 Average rate of real GDP growth (%), 2004–08....................4.74
■ ■ ■ ■
Public debt securities .........92.7 Private debt securities........52.4 Banking deposits ...............233.2 Equity securities ................196.0 Total
574.3
40.6%
Total/GDP: 233.4%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................35 3.3 1
2
3
4
5
6
7
Factors, policies, and institutions
240
1st pillar: Institutional environment .........................................33
4.1
Financial sector liberalization ....................................................36 Corporate governance.................................................................29 Legal and regulatory issues .......................................................39 Contract enforcement..................................................................24
3.6 4.6 3.4 4.7
2nd pillar: Business environment .............................................31
4.4
Human capital ...............................................................................32 Taxes...............................................................................................26 Infrastructure ................................................................................32 Cost of doing business ................................................................33
4.2 4.8 3.7 5.1
3rd pillar: Financial stability......................................................36
4.6
Currency stability............................................................................9 Banking system stability..............................................................52 Risk of sovereign debt crisis ......................................................33
5.6 3.7 4.7 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................34
3.5
Size index .......................................................................................22 Efficiency index.............................................................................41 Financial information disclosure................................................36
3.4 4.4 2.0
5th pillar: Non-banking financial services .............................47
1.6
IPO activity.....................................................................................33 M&A activity..................................................................................35 Insurance .......................................................................................49 Securitization.................................................................................50
1.8 1.6 1.7 1.2
6th pillar: Financial markets......................................................36
2.0
Foreign exchange markets .........................................................30 Derivatives markets .....................................................................28 Equity market development ........................................................35 Bond market development..........................................................25
1.1 1.5 2.1 2.7 1
Financial access 7th pillar: Financial access........................................................29
3.3
Commercial access......................................................................31 Retail access.................................................................................24
3.8 2.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Thailand Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–1.1 Commitments to WTO agreement on trade in services.......32 .....■ ...............49.1 Domestic financial sector liberalization .................................25 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................42 .....■ .................4.1 Efficacy of corporate boards .................................................39 .....■ .................4.5 Reliance on professional management .................................36 .....■ .................4.6 Willingness to delegate.........................................................44 .....■ .................3.6 Strength of auditing and reporting standards........................31 .....■ .................5.0 Ethical behavior of firms........................................................36 .....■ .................4.0 Protection of minority shareholders’ interests......................27 .....■ .................4.8 Official supervisory power ....................................................13 .....■ ...............12.0 Private monitoring of the banking industry .............................2 .....■ .................8.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................20 .....■ .................3.5 Centralization of economic policymaking ..............................42 .....■ .................2.7 Regulation of securities exchanges ......................................23 .....■ .................4.9 Property rights.......................................................................40 .....■ .................4.3 Intellectual property protection .............................................40 .....■ .................3.3 Diversion of public funds.......................................................33 .....■ .................3.5 Public trust of politicians .......................................................35 .....■ .................2.7 Corruption perceptions index ................................................39 .....■ .................3.5 Strength of legal rights index ................................................39 .....■ .................4.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................36 .....■ .................3.4 Judicial independence ...........................................................29 .....■ .................4.2 Irregular payments in judicial decisions ................................41 .....■ .................3.5 Time to enforce a contract ....................................................25 .....■ .............479.0 Number of procedures to enforce a contract .......................29 .....■ ...............35.0 Strength of investor protection .............................................10 .....■ .................7.7 Cost of enforcing contracts...................................................10 .....■ ...............14.3
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................36 .....■ .................4.2 Quality of math and science education.................................34 .....■ .................4.1 Extent of staff training...........................................................36 .....■ .................4.1 Local availability of specialized research and training services .............................................................40 .....■ .................4.1 Brain drain and ease of hiring foreign labor ..........................30 .....■ .................4.2 Tertiary enrollment ................................................................27 .....■ ...............49.5
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................41 .....■ .................3.5 Distortive effect on competition of taxes and subsidies ......28 .....■ .................4.2 Marginal tax variation ............................................................13 .....■ .................1.5 Time to pay taxes ..................................................................30 .....■ .............264.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................26 .....■ .................4.8 Quality of telephone infrastructure .......................................28 .....■ .................6.2 Internet users ........................................................................41 .....■ ...............21.0 Broadband Internet subscribers ............................................46 .....■ .................1.4 Telephone lines .....................................................................46 .....■ ...............11.0 Mobile telephone subscribers.................................................8 .....■ .............123.8
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
241
2: Country/Economy Profiles
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Thailand Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................19 .....■ .................4.9 Cost of registering property ..................................................13 .....■ .................1.1 Cost of closing a business ....................................................52 .....■ ...............36.0 Time to start a business ........................................................43 .....■ ...............33.0 Time to register property.........................................................1 .....■ .................2.0 Time to close a business.......................................................30 .....■ .................2.7
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
242
Currency stability Change in real effective exchange rate.................................17 .....■ .................3.2 External vulnerability indicator.................................................9 .....■ ...............38.0 Current account balance to GDP...........................................29 .....■ ...............–0.1 Dollarization vulnerability indicator ........................................24 .....■ .................2.3 External debt to GDP (developing economies) .......................7 .....■ ...............25.1 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................48 .....■ .................2.3 Financial strengths indicator..................................................42 .....■ .................3.0 Manageability of private debt ...............................................n/a .........................n/a Aggregate measure of real estate bubbles...........................25 .....■ .................4.9
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................34 .....■ ...............14.0 Foreign currency sovereign rating.........................................33 .....■ ...............12.7 Aggregate macroprudential indicator ....................................27 .....■ .................5.0 Manageability of public debt .................................................26 .....■ ...............37.9 Credit default swap spreads .................................................21 .....■ .............121.8
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................22 .....■ ...............93.6 Central bank assets to GDP ..................................................17 .....■ .................2.1 Financial system deposits to GDP ........................................14 .....■ ...............89.2 M2 to GDP ............................................................................12 .....■ .............109.3 Private credit to GDP.............................................................25 .....■ ...............82.7 Bank deposits to GDP ...........................................................15 .....■ ...............89.2 Money market instruments to GDP......................................23 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................54 .....■ .................2.4 Bank overhead costs.............................................................20 .....■ .................2.2 Public ownership of banks ....................................................24 .....■ .................6.7 Bank operating costs to assets.............................................32 .....■ .................3.2 Non-performing bank loans to total loans .............................45 .....■ .................6.5
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................29 .....■ ...............31.8 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................30 .....■ .................0.5 IPO proceeds amount ...........................................................22 .....■ .................0.4 Share of world IPOs ..............................................................25 .....■ .................0.6
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Thailand Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................32 .....■ .................0.2 M&A transaction value to GDP .............................................32 .....■ .................2.8 Share of total number of M&A deals ....................................26 .....■ .................0.6
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................31 .....■ ..........8,285.0 Insurance density ..................................................................38 .....■ .............129.7 Real growth of direct insurance premiums...........................36 .....■ .................0.0 Insurance penetration............................................................30 .....■ .................0.0 Relative value-added of insurance to GDP............................42 .....■ .................0.6
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................47 .....■ .................0.5 Share of total number of securitization deals .......................38 .....■ .................0.1
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................36 .....■ .................0.1 Outright forward foreign exchange turnover ........................27 .....■ .................0.2 Foreign exchange swap turnover..........................................29 .....■ .................0.2
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................27 .....■ .................0.0 Interest rate derivatives turnover: Swaps .............................26 .....■ .................0.0 Interest rate derivatives turnover: Options ...........................19 .....■ .................0.2 Foreign exchange derivatives turnover: Currency swaps .....23 .....■ .................0.3 Foreign exchange derivatives turnover: Options ..................35 .....■ .................0.0
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................33 .....■ ...............63.9 Stock market capitalization to GDP.......................................33 .....■ ...............68.9 Stock market value traded to GDP........................................34 .....■ ...............44.0 Number of listed companies per 10,000 people...................24 .....■ .................0.1
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP .............13 .....■ ...............48.4 Private international bonds to GDP .......................................20 .....■ ...............25.7 Public international bonds to GDP ........................................29 .....■ .................2.2
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
243 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................28 .....■ .................5.1 Venture capital availability .....................................................34 .....■ .................3.0 Ease of access to credit........................................................18 .....■ .................3.9 Financing through local equity market ..................................22 .....■ .................4.5 Ease of access to loans ........................................................24 .....■ .................3.6 Foreign direct investment to GDP ........................................32 .....■ .................3.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................17 .....■ ......149,800.9 Commercial bank branches...................................................36 .....■ ...............10.9 Total number of ATMs...........................................................16 .....■ ...............65.5 Total number of point of sale (POS) devices...........................8 .....■ ..........2,003.9 MFI borrowers’ penetration rate ...........................................26 .....■ .................0.1
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Turkey Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................69.7
US$ bn
GDP (US$ billions), 2008 .........................................................729.4
29.9%
33.9%
GDP (current prices) per capita, 2008 ............................10,471.7 GDP (PPP) as share (%) of world total, 2008 ........................1.35 Average rate of real GDP growth (%), 2004–08....................6.08
1.4%
■ ■ ■ ■
Public debt securities .......252.8 Private debt securities........12.2 Banking deposits ...............294.8 Equity securities ................286.6 Total
846.4
34 8%
Total/GDP: 130.4%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................44 3.0 1
2
3
4
5
6
7
Factors, policies, and institutions
244
1st pillar: Institutional environment .........................................46
3.5
Financial sector liberalization ....................................................48 Corporate governance.................................................................51 Legal and regulatory issues .......................................................47 Contract enforcement..................................................................28
2.6 3.8 3.1 4.5
2nd pillar: Business environment .............................................32
4.4
Human capital ...............................................................................43 Taxes...............................................................................................30 Infrastructure ................................................................................37 Cost of doing business ................................................................19
3.7 4.7 3.5 5.5
3rd pillar: Financial stability......................................................51
3.8
Currency stability..........................................................................43 Banking system stability..............................................................34 Risk of sovereign debt crisis ......................................................51
3.7 4.8 2.6 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................41
3.0
Size index .......................................................................................44 Efficiency index.............................................................................37 Financial information disclosure................................................29
1.6 4.5 2.4
5th pillar: Non-banking financial services .............................40
1.8
IPO activity.....................................................................................35 M&A activity..................................................................................28 Insurance .......................................................................................46 Securitization.................................................................................27
1.7 1.7 1.7 2.1
6th pillar: Financial markets......................................................42
1.8
Foreign exchange markets .........................................................34 Derivatives markets .....................................................................23 Equity market development ........................................................32 Bond market development..........................................................41
1.1 2.2 2.3 1.3 1
Financial access 7th pillar: Financial access........................................................38
3.0
Commercial access......................................................................44 Retail access.................................................................................30
3.4 2.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Turkey Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–1.1 Commitments to WTO agreement on trade in services.......29 .....■ ...............83.5 Domestic financial sector liberalization .................................51 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................53 .....■ .................3.4 Efficacy of corporate boards .................................................54 .....■ .................3.8 Reliance on professional management .................................42 .....■ .................4.2 Willingness to delegate.........................................................49 .....■ .................3.3 Strength of auditing and reporting standards........................45 .....■ .................4.2 Ethical behavior of firms........................................................40 .....■ .................3.8 Protection of minority shareholders’ interests......................48 .....■ .................3.9 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................34 .....■ .................2.9 Centralization of economic policymaking ..............................47 .....■ .................2.4 Regulation of securities exchanges ......................................41 .....■ .................4.3 Property rights.......................................................................46 .....■ .................3.9 Intellectual property protection .............................................50 .....■ .................2.7 Diversion of public funds.......................................................43 .....■ .................3.0 Public trust of politicians .......................................................41 .....■ .................2.2 Corruption perceptions index ................................................32 .....■ .................4.6 Strength of legal rights index ................................................39 .....■ .................4.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................26 .....■ .................3.9 Judicial independence ...........................................................40 .....■ .................3.7 Irregular payments in judicial decisions ................................43 .....■ .................3.4 Time to enforce a contract ....................................................22 .....■ .............420.0 Number of procedures to enforce a contract .......................29 .....■ ...............35.0 Strength of investor protection .............................................25 .....■ .................5.7 Cost of enforcing contracts...................................................20 .....■ ...............18.8
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................46 .....■ .................3.8 Quality of math and science education.................................36 .....■ .................3.8 Extent of staff training...........................................................45 .....■ .................3.7 Local availability of specialized research and training services .............................................................45 .....■ .................3.9 Brain drain and ease of hiring foreign labor ..........................41 .....■ .................3.7 Tertiary enrollment ................................................................37 .....■ ...............34.6
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................43 .....■ .................3.4 Distortive effect on competition of taxes and subsidies ......37 .....■ .................4.1 Marginal tax variation ............................................................17 .....■ .................3.2 Time to pay taxes ..................................................................25 .....■ .............223.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................33 .....■ .................4.2 Quality of telephone infrastructure .......................................35 .....■ .................6.0 Internet users ........................................................................45 .....■ ...............16.2 Broadband Internet subscribers ............................................31 .....■ .................6.1 Telephone lines .....................................................................31 .....■ ...............24.3 Mobile telephone subscribers...............................................39 .....■ ...............82.8
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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Turkey Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................39 .....■ ...............14.9 Cost of registering property ..................................................26 .....■ .................3.0 Cost of closing a business ....................................................30 .....■ ...............15.0 Time to start a business ..........................................................6 .....■ .................6.0 Time to register property.........................................................7 .....■ .................6.0 Time to close a business.......................................................38 .....■ .................3.3
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
246
Currency stability Change in real effective exchange rate.................................10 .....■ .................4.6 External vulnerability indicator...............................................26 .....■ .............125.0 Current account balance to GDP...........................................46 .....■ ...............–5.7 Dollarization vulnerability indicator ........................................38 .....■ ...............79.4 External debt to GDP (developing economies) .....................17 .....■ ...............38.3 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................51 .....■ .................2.5 Financial strengths indicator..................................................37 .....■ .................4.0 Manageability of private debt..................................................7 .....■ .................1.9 Aggregate measure of real estate bubbles...........................19 .....■ .................5.3
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................48 .....■ .................8.7 Foreign currency sovereign rating.........................................48 .....■ .................7.7 Aggregate macroprudential indicator ....................................52 .....■ .................3.1 Manageability of public debt .................................................29 .....■ ...............40.0 Credit default swap spreads .................................................36 .....■ .............274.0
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................42 .....■ ...............45.7 Central bank assets to GDP ..................................................19 .....■ .................2.1 Financial system deposits to GDP ........................................42 .....■ ...............37.6 M2 to GDP ............................................................................46 .....■ ...............44.7 Private credit to GDP.............................................................46 .....■ ...............26.0 Bank deposits to GDP ...........................................................43 .....■ ...............37.6 Money market instruments to GDP......................................27 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................13 .....■ .................4.7 Bank overhead costs.............................................................41 .....■ .................4.1 Public ownership of banks ....................................................43 .....■ ...............32.1 Bank operating costs to assets.............................................39 .....■ .................3.9 Non-performing bank loans to total loans .............................36 .....■ .................3.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................31 .....■ ...............26.3 Public credit registry coverage ..............................................12 .....■ ...............12.7
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................21 .....■ .................0.9 IPO proceeds amount ...........................................................30 .....■ .................0.3 Share of world IPOs ..............................................................32 .....■ .................0.4
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Turkey Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................23 .....■ .................0.6 M&A transaction value to GDP .............................................31 .....■ .................3.0 Share of total number of M&A deals ....................................32 .....■ .................0.4
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................32 .....■ ..........8,221.0 Insurance density ..................................................................39 .....■ .............109.8 Real growth of direct insurance premiums...........................33 .....■ .................0.0 Insurance penetration............................................................46 .....■ .................0.0 Relative value-added of insurance to GDP............................23 .....■ .................1.1
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................22 .....■ .................2.3 Share of total number of securitization deals .......................20 .....■ .................0.4
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover............................................40 .....■ .................0.1 Outright forward foreign exchange turnover ........................28 .....■ .................0.2 Foreign exchange swap turnover..........................................32 .....■ .................0.1
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ...........................................................................29 .....■ .................0.0 Interest rate derivatives turnover: Swaps .............................34 .....■ .................0.0 Interest rate derivatives turnover: Options ...........................24 .....■ .................0.0 Foreign exchange derivatives turnover: Currency swaps .....11 .....■ .................1.5 Foreign exchange derivatives turnover: Options ..................23 .....■ .................0.1
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................16 .....■ .............134.3 Stock market capitalization to GDP.......................................48 .....■ ...............34.3 Stock market value traded to GDP........................................32 .....■ ...............46.0 Number of listed companies per 10,000 people...................33 .....■ .................0.0
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............31 .....■ .................0.1 Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP .......................................38 .....■ .................1.8 Public international bonds to GDP ........................................17 .....■ .................6.3
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
247 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................29 .....■ .................5.0 Venture capital availability .....................................................52 .....■ .................2.3 Ease of access to credit........................................................26 .....■ .................3.6 Financing through local equity market ..................................41 .....■ .................3.9 Ease of access to loans ........................................................42 .....■ .................2.8 Foreign direct investment to GDP ........................................37 .....■ .................3.4
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts .....................................9 .....■ ......185,115.0 Commercial bank branches...................................................22 .....■ ...............17.3 Total number of ATMs...........................................................29 .....■ ...............41.0 Total number of point of sale (POS) devices.........................13 .....■ ..........1,101.5 MFI borrowers’ penetration rate ...........................................27 .....■ .................0.0
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Ukraine Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................45.8
US$ bn
8.7% 2.7%
GDP (US$ billions), 2008 .........................................................179.7 GDP (current prices) per capita, 2008 ..............................3,920.1 GDP (PPP) as share (%) of world total, 2008 ........................0.50 Average rate of real GDP growth (%), 2004–08....................6.42
29.6%
59.0%
■ ■ ■ ■
Public debt securities .........16.5 Private debt securities..........5.2 Banking deposits .................56.1 Equity securities ................111.8 Total
189.6
Total/GDP: 132.4%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................53 2.7 1
2
3
4
5
6
7
Factors, policies, and institutions
248
1st pillar: Institutional environment .........................................51
3.1
Financial sector liberalization ....................................................50 Corporate governance.................................................................52 Legal and regulatory issues .......................................................50 Contract enforcement..................................................................45
2.1 3.7 2.9 3.6
2nd pillar: Business environment .............................................45
3.7
Human capital ...............................................................................28 Taxes...............................................................................................53 Infrastructure ................................................................................33 Cost of doing business ................................................................46
4.3 2.8 3.6 4.3
3rd pillar: Financial stability......................................................55
3.2
Currency stability..........................................................................48 Banking system stability..............................................................51 Risk of sovereign debt crisis ......................................................55
3.3 3.9 2.2 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................52
2.4
Size index .....................................................................................n/a Efficiency index.............................................................................53 Financial information disclosure................................................51
n/a 3.0 1.1
5th pillar: Non-banking financial services .............................27
2.4
IPO activity.....................................................................................44 M&A activity..................................................................................39 Insurance .......................................................................................32 Securitization...................................................................................7
1.3 1.4 2.5 4.3
6th pillar: Financial markets......................................................54
1.3
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................51 Bond market development ........................................................n/a
n/a n/a 1.3 n/a 1
Financial access 7th pillar: Financial access........................................................45
2.9
Commercial access......................................................................48 Retail access.................................................................................29
3.1 2.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Ukraine Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–1.1 Commitments to WTO agreement on trade in services......n/a .........................n/a Domestic financial sector liberalization .................................48 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................41 .....■ .................4.1 Efficacy of corporate boards .................................................46 .....■ .................4.4 Reliance on professional management .................................50 .....■ .................4.0 Willingness to delegate.........................................................52 .....■ .................3.2 Strength of auditing and reporting standards........................53 .....■ .................3.7 Ethical behavior of firms........................................................53 .....■ .................3.2 Protection of minority shareholders’ interests......................55 .....■ .................3.0 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................40 .....■ .................2.7 Centralization of economic policymaking ..............................26 .....■ .................3.3 Regulation of securities exchanges ......................................55 .....■ .................2.7 Property rights.......................................................................54 .....■ .................2.9 Intellectual property protection .............................................51 .....■ .................2.6 Diversion of public funds.......................................................50 .....■ .................2.5 Public trust of politicians .......................................................45 .....■ .................2.0 Corruption perceptions index ................................................49 .....■ .................2.5 Strength of legal rights index ..................................................4 .....■ .................9.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................51 .....■ .................2.3 Judicial independence ...........................................................54 .....■ .................2.3 Irregular payments in judicial decisions ................................46 .....■ .................3.2 Time to enforce a contract ....................................................13 .....■ .............354.0 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Strength of investor protection .............................................52 .....■ .................3.7 Cost of enforcing contracts...................................................50 .....■ ...............41.5
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................48 .....■ .................3.7 Quality of math and science education.................................24 .....■ .................4.7 Extent of staff training...........................................................52 .....■ .................3.4 Local availability of specialized research and training services .............................................................44 .....■ .................3.9 Brain drain and ease of hiring foreign labor ..........................50 .....■ .................3.4 Tertiary enrollment ..................................................................7 .....■ ...............76.4
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................46 .....■ .................3.1 Distortive effect on competition of taxes and subsidies ......53 .....■ .................3.0 Marginal tax variation ............................................................43 .....■ ...............13.5 Time to pay taxes ..................................................................50 .....■ .............848.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................41 .....■ .................3.5 Quality of telephone infrastructure .......................................47 .....■ .................5.4 Internet users ........................................................................39 .....■ ...............21.6 Broadband Internet subscribers ............................................43 .....■ .................1.7 Telephone lines .....................................................................27 .....■ ...............27.8 Mobile telephone subscribers.................................................9 .....■ .............119.6
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
Part 1.r3
249
2: Country/Economy Profiles
Part 1.r3
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Ukraine Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................23 .....■ .................5.5 Cost of registering property ..................................................25 .....■ .................2.9 Cost of closing a business ....................................................55 .....■ ...............42.0 Time to start a business ........................................................34 .....■ ...............27.0 Time to register property.......................................................48 .....■ ...............93.0 Time to close a business.......................................................33 .....■ .................2.9
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
250
Currency stability Change in real effective exchange rate.................................26 .....■ .................1.2 External vulnerability indicator...............................................19 .....■ ...............76.4 Current account balance to GDP...........................................48 .....■ ...............–7.2 Dollarization vulnerability indicator ........................................35 .....■ ...............47.0 External debt to GDP (developing economies) .....................27 .....■ ...............59.9 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................54 .....■ .................3.5 Financial strengths indicator..................................................47 .....■ .................2.0 Manageability of private debt................................................10 .....■ .................4.0 Aggregate measure of real estate bubbles...........................28 .....■ .................4.8
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................51 .....■ .................5.3 Foreign currency sovereign rating.........................................53 .....■ .................4.3 Aggregate macroprudential indicator ....................................55 .....■ .................2.6 Manageability of public debt ...................................................5 .....■ ...............10.3 Credit default swap spreads .................................................44 .....■ ..........1,837.1
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP ....................................n/a .........................n/a Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP .......................................n/a .........................n/a M2 to GDP ............................................................................42 .....■ ...............52.0 Private credit to GDP............................................................n/a .........................n/a Bank deposits to GDP ...........................................................46 .....■ ...............33.9 Money market instruments to GDP .....................................n/a .........................n/a
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................45 .....■ .................3.3 Bank overhead costs.............................................................40 .....■ .................3.8 Public ownership of banks ....................................................32 .....■ ...............10.4 Bank operating costs to assets.............................................52 .....■ .................7.1 Non-performing bank loans to total loans .............................49 .....■ ...............14.5
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................44 .....■ .................3.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................43 .....■ .................0.1 IPO proceeds amount ...........................................................38 .....■ .................0.2 Share of world IPOs ..............................................................42 .....■ .................0.1
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Ukraine Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................41 .....■ .................0.1 M&A transaction value to GDP .............................................39 .....■ .................2.4 Share of total number of M&A deals ....................................33 .....■ .................0.3
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................41 .....■ ..........3,566.0 Insurance density ..................................................................43 .....■ ...............77.2 Real growth of direct insurance premiums...........................12 .....■ .................0.2 Insurance penetration............................................................36 .....■ .................0.0 Relative value-added of insurance to GDP............................18 .....■ .................1.5
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................11 .....■ .................4.7 Share of total number of securitization deals .........................9 .....■ .................1.6
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................53 .....■ .................2.6 Stock market capitalization to GDP.......................................38 .....■ ...............55.0 Stock market value traded to GDP........................................52 .....■ .................1.4 Number of listed companies per 10,000 people...................27 .....■ .................0.1
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
251 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................54 .....■ .................3.4 Venture capital availability .....................................................47 .....■ .................2.5 Ease of access to credit........................................................41 .....■ .................2.9 Financing through local equity market ..................................53 .....■ .................2.8 Ease of access to loans ........................................................47 .....■ .................2.7 Foreign direct investment to GDP ........................................19 .....■ .................6.9
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts .....................................1 .....■ ......375,499.3 Commercial bank branches...................................................45 .....■ .................3.3 Total number of ATMs...........................................................14 .....■ ...............70.1 Total number of point of sale (POS) devices.........................33 .....■ ...............10.7 MFI borrowers’ penetration rate ...........................................20 .....■ .................0.6
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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United Arab Emirates Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .........................................................4.8
US$ bn
10.2%
GDP (US$ billions), 2008 .........................................................260.1
10.8%
GDP (current prices) per capita, 2008 ............................54,606.5 GDP (PPP) as share (%) of world total, 2008 ........................0.27
47.7%
Average rate of real GDP growth (%), 2004–08....................8.20
■ ■ ■ ■
Public debt securities .........47.9 Private debt securities........51.0 Banking deposits ...............147.0 Equity securities ................224.7 Total
31.2%
470.6
Total/GDP: 261.2%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................20 4.2 1
2
3
4
5
6
7
Factors, policies, and institutions
252
1st pillar: Institutional environment .........................................21
5.0
Financial sector liberalization ....................................................22 Corporate governance.................................................................13 Legal and regulatory issues .......................................................13 Contract enforcement..................................................................34
5.9 5.1 4.9 4.2
2nd pillar: Business environment .............................................19
5.2
Human capital ...............................................................................22 Taxes.................................................................................................2 Infrastructure ................................................................................21 Cost of doing business ................................................................41
4.7 6.2 5.2 4.7
3rd pillar: Financial stability......................................................17
5.1
Currency stability..........................................................................20 Banking system stability................................................................1 Risk of sovereign debt crisis ......................................................41
4.6 6.5 3.6 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................21
4.2
Size index .....................................................................................n/a Efficiency index.............................................................................18 Financial information disclosure................................................41
n/a 5.5 1.6
5th pillar: Non-banking financial services .............................26
2.4
IPO activity.....................................................................................11 M&A activity..................................................................................45 Insurance .......................................................................................21 Securitization.................................................................................34
3.5 1.3 2.9 1.9
6th pillar: Financial markets......................................................21
3.1
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................25 Bond market development ........................................................n/a
n/a n/a 3.1 n/a 1
Financial access 7th pillar: Financial access..........................................................7
4.6
Commercial access........................................................................7 Retail access ...............................................................................n/a
4.6 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
10/14/09
2:23 PM
Page 253
United Arab Emirates Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.......23 .....■ ...............38.6 Domestic financial sector liberalization .................................27 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................14 .....■ .................4.7 Efficacy of corporate boards .................................................20 .....■ .................5.1 Reliance on professional management .................................25 .....■ .................5.1 Willingness to delegate.........................................................15 .....■ .................4.8 Strength of auditing and reporting standards........................20 .....■ .................5.4 Ethical behavior of firms........................................................15 .....■ .................5.5 Protection of minority shareholders’ interests......................12 .....■ .................5.2 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation ...........................................3 .....■ .................4.6 Centralization of economic policymaking ................................8 .....■ .................4.5 Regulation of securities exchanges ......................................17 .....■ .................5.2 Property rights.......................................................................23 .....■ .................5.5 Intellectual property protection .............................................12 .....■ .................5.6 Diversion of public funds.......................................................15 .....■ .................5.5 Public trust of politicians .........................................................3 .....■ .................5.9 Corruption perceptions index ................................................22 .....■ .................5.9 Strength of legal rights index ................................................39 .....■ .................4.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................11 .....■ .................4.7 Judicial independence ...........................................................19 .....■ .................5.1 Irregular payments in judicial decisions ................................14 .....■ .................5.9 Time to enforce a contract ....................................................40 .....■ .............607.0 Number of procedures to enforce a contract .......................54 .....■ ...............50.0 Strength of investor protection .............................................47 .....■ .................4.3 Cost of enforcing contracts...................................................34 .....■ ...............26.2
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................18 .....■ .................5.1 Quality of math and science education.................................12 .....■ .................5.1 Extent of staff training...........................................................23 .....■ .................4.6 Local availability of specialized research and training services .............................................................19 .....■ .................5.0 Brain drain and ease of hiring foreign labor ............................1 .....■ .................6.0 Tertiary enrollment ................................................................46 .....■ ...............22.9
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................14 .....■ .................5.9 Distortive effect on competition of taxes and subsidies ........3 .....■ .................5.8 Marginal tax variation ..............................................................9 .....■ .................0.0 Time to pay taxes ....................................................................1 .....■ ...............12.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................10 .....■ .................6.1 Quality of telephone infrastructure .......................................19 .....■ .................6.5 Internet users ........................................................................24 .....■ ...............51.6 Broadband Internet subscribers ............................................28 .....■ .................8.7 Telephone lines .....................................................................25 .....■ ...............31.6 Mobile telephone subscribers.................................................1 .....■ .............176.5
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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United Arab Emirates Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................36 .....■ ...............13.4 Cost of registering property ..................................................17 .....■ .................2.0 Cost of closing a business ....................................................51 .....■ ...............30.0 Time to start a business ........................................................26 .....■ ...............17.0 Time to register property.........................................................7 .....■ .................6.0 Time to close a business.......................................................51 .....■ .................5.1
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
254
Currency stability Change in real effective exchange rate.................................36 .....■ .................0.0 External vulnerability indicator...............................................27 .....■ .............134.5 Current account balance to GDP.............................................5 .....■ ...............15.8 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................28 .....■ ...............70.4 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises ...................................................1 .....■ .................0.0 Financial strengths indicator....................................................1 .....■ .................9.0 Manageability of private debt ...............................................n/a .........................n/a Aggregate measure of real estate bubbles...........................18 .....■ .................5.3
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating............................................n/a .........................n/a Foreign currency sovereign rating ........................................n/a .........................n/a Aggregate macroprudential indicator ....................................49 .....■ .................3.9 Manageability of public debt .................................................31 .....■ ...............40.7 Credit default swap spreads.................................................n/a .........................n/a
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP ....................................n/a .........................n/a Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP .......................................n/a .........................n/a M2 to GDP ............................................................................26 .....■ ...............73.8 Private credit to GDP............................................................n/a .........................n/a Bank deposits to GDP ..........................................................n/a .........................n/a Money market instruments to GDP......................................17 .....■ .................0.5
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................2 .....■ .................6.3 Bank overhead costs...............................................................6 .....■ .................1.4 Public ownership of banks ....................................................50 .....■ ...............57.4 Bank operating costs to assets.............................................19 .....■ .................1.8 Non-performing bank loans to total loans .............................22 .....■ .................2.5
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................40 .....■ .................7.7 Public credit registry coverage ..............................................14 .....■ .................6.5
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................15 .....■ .................1.5 IPO proceeds amount .............................................................2 .....■ .................1.6 Share of world IPOs ..............................................................28 .....■ .................0.5
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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United Arab Emirates Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................40 .....■ .................0.1 M&A transaction value to GDP .............................................41 .....■ .................2.1 Share of total number of M&A deals ....................................41 .....■ .................0.2
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................40 .....■ ..........3,973.0 Insurance density ..................................................................23 .....■ .............907.1 Real growth of direct insurance premiums.............................1 .....■ .................0.3 Insurance penetration............................................................40 .....■ .................0.0 Relative value-added of insurance to GDP ...........................n/a .........................n/a
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................21 .....■ .................2.3 Share of total number of securitization deals .......................40 .....■ .................0.1
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................28 .....■ ...............82.5 Stock market capitalization to GDP.......................................16 .....■ .............123.0 Stock market value traded to GDP........................................19 .....■ .............110.4 Number of listed companies per 10,000 people...................17 .....■ .................0.2
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
255 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................25 .....■ .................5.4 Venture capital availability .....................................................11 .....■ .................3.9 Ease of access to credit........................................................12 .....■ .................4.1 Financing through local equity market ....................................7 .....■ .................4.8 Ease of access to loans ..........................................................5 .....■ .................4.5 Foreign direct investment to GDP ........................................18 .....■ .................7.4
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ..................................................n/a .........................n/a Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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United Kingdom Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................61.1
US$ bn
9.9%
GDP (US$ billions), 2008 ......................................................2,674.1 31.6%
GDP (current prices) per capita, 2008 ............................43,785.3 GDP (PPP) as share (%) of world total, 2008 ........................3.23
23.9%
Average rate of real GDP growth (%), 2004–08....................2.28
■ ■ ■ ■
Public debt securities ....1,203.0 Private debt securities...2,914.6 Banking deposits ............4,228.9 Equity securities .............3,858.5 Total
12,205.0
Total/GDP: 435.4%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index........................................................1 5.3 1
2
3
4
5
6
7
Factors, policies, and institutions
256
1st pillar: Institutional environment .........................................15
5.5
Financial sector liberalization ......................................................1 Corporate governance.................................................................22 Legal and regulatory issues .......................................................16 Contract enforcement....................................................................9
7.0 4.9 4.7 5.5
2nd pillar: Business environment .............................................12
5.6
Human capital ...............................................................................14 Taxes...............................................................................................20 Infrastructure ..................................................................................9 Cost of doing business ..................................................................8
5.0 5.3 6.0 6.2
3rd pillar: Financial stability......................................................37
4.6
Currency stability..........................................................................44 Banking system stability..............................................................45 Risk of sovereign debt crisis ......................................................15
3.6 4.4 5.8 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services........................................2
5.3
Size index .........................................................................................1 Efficiency index.............................................................................24 Financial information disclosure..................................................3
6.0 5.3 4.0
5th pillar: Non-banking financial services ...............................1
6.4
IPO activity.......................................................................................5 M&A activity....................................................................................1 Insurance .........................................................................................1 Securitization...................................................................................1
4.9 6.9 6.7 7.0
6th pillar: Financial markets........................................................2
5.5
Foreign exchange markets ...........................................................1 Derivatives markets .......................................................................1 Equity market development ..........................................................4 Bond market development..........................................................14
7.0 7.0 5.5 3.6 1
Financial access 7th pillar: Financial access........................................................16
4.0
Commercial access......................................................................22 Retail access ...............................................................................n/a
4.0 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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United Kingdom Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.........1 .....■ ...............73.9 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ................................9 .....■ .................5.0 Efficacy of corporate boards .................................................17 .....■ .................5.1 Reliance on professional management .................................12 .....■ .................5.7 Willingness to delegate.........................................................14 .....■ .................4.8 Strength of auditing and reporting standards........................15 .....■ .................5.6 Ethical behavior of firms........................................................12 .....■ .................5.9 Protection of minority shareholders’ interests......................15 .....■ .................5.1 Official supervisory power ....................................................28 .....■ .................9.0 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................31 .....■ .................3.0 Centralization of economic policymaking ..............................43 .....■ .................2.6 Regulation of securities exchanges ......................................28 .....■ .................4.8 Property rights.......................................................................19 .....■ .................5.6 Intellectual property protection .............................................17 .....■ .................5.3 Diversion of public funds.......................................................12 .....■ .................5.6 Public trust of politicians .......................................................25 .....■ .................3.4 Corruption perceptions index ................................................13 .....■ .................7.7 Strength of legal rights index ..................................................4 .....■ .................9.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .......................................8 .....■ .................5.0 Judicial independence ...........................................................14 .....■ .................6.0 Irregular payments in judicial decisions ................................18 .....■ .................5.4 Time to enforce a contract ....................................................18 .....■ .............404.0 Number of procedures to enforce a contract .......................10 .....■ ...............30.0 Strength of investor protection ...............................................8 .....■ .................8.0 Cost of enforcing contracts...................................................26 .....■ ...............23.4
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................13 .....■ .................5.4 Quality of math and science education.................................30 .....■ .................4.4 Extent of staff training...........................................................20 .....■ .................4.7 Local availability of specialized research and training services ...............................................................9 .....■ .................5.6 Brain drain and ease of hiring foreign labor ..........................11 .....■ .................4.9 Tertiary enrollment ................................................................18 .....■ ...............59.3
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................19 .....■ .................5.4 Distortive effect on competition of taxes and subsidies ......29 .....■ .................4.2 Marginal tax variation ............................................................26 .....■ .................7.0 Time to pay taxes ..................................................................10 .....■ .............105.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................24 .....■ .................5.2 Quality of telephone infrastructure .......................................23 .....■ .................6.4 Internet users ........................................................................10 .....■ ...............72.0 Broadband Internet subscribers ............................................11 .....■ ...............25.7 Telephone lines .......................................................................7 .....■ ...............55.4 Mobile telephone subscribers...............................................11 .....■ .............118.5
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
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United Kingdom Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business .....................................................8 .....■ .................0.8 Cost of registering property ..................................................32 .....■ .................4.1 Cost of closing a business ....................................................14 .....■ .................6.0 Time to start a business ........................................................17 .....■ ...............13.0 Time to register property.......................................................19 .....■ ...............21.0 Time to close a business.........................................................8 .....■ .................1.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
258
Currency stability Change in real effective exchange rate.................................34 .....■ .................0.3 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................33 .....■ ...............–1.7 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................20 .....■ .............–27.2
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................41 .....■ .................2.0 Financial strengths indicator....................................................1 .....■ .................9.0 Manageability of private debt................................................40 .....■ .............152.4 Aggregate measure of real estate bubbles...........................39 .....■ .................3.4
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................14 .....■ ...............19.8 Foreign currency sovereign rating.........................................14 .....■ ...............19.8 Aggregate macroprudential indicator ....................................25 .....■ .................5.0 Manageability of public debt .................................................39 .....■ ...............51.9 Credit default swap spreads .................................................15 .....■ ...............90.4
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .......................................6 .....■ .............175.9 Central bank assets to GDP ..................................................21 .....■ .................1.8 Financial system deposits to GDP ..........................................4 .....■ .............141.9 M2 to GDP ..............................................................................6 .....■ .............135.2 Private credit to GDP...............................................................5 .....■ .............176.3 Bank deposits to GDP .............................................................4 .....■ .............141.9 Money market instruments to GDP........................................2 .....■ ...............11.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................43 .....■ .................3.4 Bank overhead costs.............................................................23 .....■ .................2.4 Public ownership of banks ....................................................40 .....■ ...............27.5 Bank operating costs to assets.............................................12 .....■ .................1.4 Non-performing bank loans to total loans ...............................5 .....■ .................0.9
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....■ .............100.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................5 .....■ .................5.7 IPO proceeds amount ...........................................................19 .....■ .................0.5 Share of world IPOs ................................................................5 .....■ .................7.2
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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United Kingdom Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share..................................................................2 .....■ ...............10.0 M&A transaction value to GDP ...............................................4 .....■ ...............12.1 Share of total number of M&A deals ......................................2 .....■ .................8.8
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ....................................................2 .....■ ......539,468.0 Insurance density ....................................................................1 .....■ ..........8,326.0 Real growth of direct insurance premiums.............................4 .....■ .................0.2 Insurance penetration..............................................................1 .....■ .................0.2 Relative value-added of insurance to GDP..............................8 .....■ .................2.5
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ..............................................................2 .....■ ...............10.1 Share of total number of securitization deals .........................3 .....■ .................3.3
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover..............................................1 .....■ ...............26.3 Outright forward foreign exchange turnover ..........................1 .....■ ...............29.2 Foreign exchange swap turnover............................................1 .....■ ...............40.8
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements .............................................................................1 .....■ ...............45.1 Interest rate derivatives turnover: Swaps ...............................1 .....■ ...............45.8 Interest rate derivatives turnover: Options .............................2 .....■ ...............34.1 Foreign exchange derivatives turnover: Currency swaps .......1 .....■ ...............46.7 Foreign exchange derivatives turnover: Options ....................1 .....■ ...............42.4
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio.....................................................1 .....■ .............267.7 Stock market capitalization to GDP.......................................10 .....■ .............141.4 Stock market value traded to GDP..........................................3 .....■ .............378.5 Number of listed companies per 10,000 people...................10 .....■ .................0.4
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............16 .....■ ...............22.1 Public domestic bond market capitalization to GDP .............15 .....■ ...............46.7 Private international bonds to GDP .........................................4 .....■ .............131.6 Public international bonds to GDP ........................................35 .....■ .................0.5
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
259 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication ...............................................6 .....■ .................6.3 Venture capital availability .....................................................19 .....■ .................3.5 Ease of access to credit........................................................55 .....■ .................1.9 Financing through local equity market ..................................33 .....■ .................4.2 Ease of access to loans ........................................................31 .....■ .................3.2 Foreign direct investment to GDP ........................................15 .....■ .................8.0
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ..................................................n/a .........................n/a Total number of ATMs.............................................................5 .....■ .............127.1 Total number of point of sale (POS) devices........................n/a .........................n/a MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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United States Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .....................................................304.4
US$ bn
8.8%
GDP (US$ billions), 2008 ....................................................14,264.6 34.3%
GDP (current prices) per capita, 2008 ............................46,859.1 GDP (PPP) as share (%) of world total, 2008 ......................20.69
38.4%
Average rate of real GDP growth (%), 2004–08....................2.50
■ ■ ■ ■
Public debt securities ....5,110.5 Private debt securities.22,302.0 Banking deposits ..........10,759.4 Equity securities ...........19,947.3 Total
58,119.1
Total/GDP: 420.9%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index........................................................3 5.1 1
2
3
4
5
6
7
Factors, policies, and institutions
260
1st pillar: Institutional environment .........................................11
5.6
Financial sector liberalization ....................................................13 Corporate governance...................................................................9 Legal and regulatory issues .......................................................14 Contract enforcement....................................................................8
6.8 5.3 4.8 5.6
2nd pillar: Business environment .............................................10
5.7
Human capital .................................................................................4 Taxes...............................................................................................27 Infrastructure ................................................................................13 Cost of doing business ..................................................................4
5.6 4.8 5.8 6.6
3rd pillar: Financial stability......................................................38
4.6
Currency stability..........................................................................50 Banking system stability..............................................................36 Risk of sovereign debt crisis ........................................................6
2.8 4.7 6.1 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................20
4.2
Size index .......................................................................................21 Efficiency index.............................................................................26 Financial information disclosure..................................................3
3.4 5.1 4.0
5th pillar: Non-banking financial services ...............................2
5.9
IPO activity.......................................................................................2 M&A activity....................................................................................2 Insurance .........................................................................................4 Securitization...................................................................................1
5.4 6.5 4.9 7.0
6th pillar: Financial markets........................................................1
5.7
Foreign exchange markets ...........................................................1 Derivatives markets .......................................................................1 Equity market development ..........................................................7 Bond market development............................................................6
7.0 7.0 5.0 4.5 1
Financial access 7th pillar: Financial access........................................................12
4.2
Commercial access......................................................................34 Retail access...................................................................................6
3.8 4.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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United States Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....■ .................2.5 Commitments to WTO agreement on trade in services.......15 .....■ ...............51.5 Domestic financial sector liberalization ...................................1 .....■ .................1.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ................................1 .....■ .................5.4 Efficacy of corporate boards .................................................14 .....■ .................5.2 Reliance on professional management .................................10 .....■ .................5.9 Willingness to delegate...........................................................5 .....■ .................5.4 Strength of auditing and reporting standards........................25 .....■ .................5.3 Ethical behavior of firms........................................................18 .....■ .................5.5 Protection of minority shareholders’ interests......................17 .....■ .................5.0 Official supervisory power ......................................................5 .....■ ...............13.0 Private monitoring of the banking industry ...........................10 .....■ .................7.0
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................21 .....■ .................3.4 Centralization of economic policymaking ................................7 .....■ .................4.5 Regulation of securities exchanges ......................................29 .....■ .................4.7 Property rights.......................................................................20 .....■ .................5.5 Intellectual property protection .............................................15 .....■ .................5.4 Diversion of public funds.......................................................19 .....■ .................5.0 Public trust of politicians .......................................................26 .....■ .................3.4 Corruption perceptions index ................................................15 .....■ .................7.3 Strength of legal rights index ................................................11 .....■ .................8.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................21 .....■ .................4.2 Judicial independence ...........................................................18 .....■ .................5.3 Irregular payments in judicial decisions ................................21 .....■ .................5.2 Time to enforce a contract ......................................................8 .....■ .............300.0 Number of procedures to enforce a contract .......................20 .....■ ...............32.0 Strength of investor protection ...............................................4 .....■ .................8.3 Cost of enforcing contracts.....................................................1 .....■ .................9.4
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................4 .....■ .................5.9 Quality of math and science education.................................27 .....■ .................4.5 Extent of staff training.............................................................7 .....■ .................5.3 Local availability of specialized research and training services ...............................................................3 .....■ .................6.0 Brain drain and ease of hiring foreign labor ............................5 .....■ .................5.2 Tertiary enrollment ..................................................................3 .....■ ...............81.8
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................21 .....■ .................5.3 Distortive effect on competition of taxes and subsidies ......39 .....■ .................4.0 Marginal tax variation ............................................................37 .....■ ...............11.5 Time to pay taxes ..................................................................21 .....■ .............187.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................12 .....■ .................5.9 Quality of telephone infrastructure .......................................15 .....■ .................6.7 Internet users ..........................................................................9 .....■ ...............72.5 Broadband Internet subscribers ............................................13 .....■ ...............23.9 Telephone lines .......................................................................8 .....■ ...............53.4 Mobile telephone subscribers...............................................38 .....■ ...............83.5
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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2: Country/Economy Profiles
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United States Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business .....................................................6 .....■ .................0.7 Cost of registering property ....................................................6 .....■ .................0.5 Cost of closing a business ....................................................15 .....■ .................7.0 Time to start a business ..........................................................6 .....■ .................6.0 Time to register property.......................................................11 .....■ ...............12.0 Time to close a business.......................................................16 .....■ .................1.5
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
262
Currency stability Change in real effective exchange rate.................................51 .....■ ...............–5.0 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................44 .....■ ...............–4.7 Dollarization vulnerability indicator ..........................................1 .....■ .................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................19 .....■ .............–17.6
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................53 .....■ .................3.0 Financial strengths indicator....................................................1 .....■ .................9.0 Manageability of private debt ...............................................n/a .........................n/a Aggregate measure of real estate bubbles...........................35 .....■ .................4.0
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ..............................................1 .....■ ...............20.0 Foreign currency sovereign rating...........................................1 .....■ ...............20.0 Aggregate macroprudential indicator ....................................34 .....■ .................4.8 Manageability of public debt .................................................25 .....■ ...............37.5 Credit default swap spreads ...................................................5 .....■ ...............44.5
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................32 .....■ ...............65.9 Central bank assets to GDP ..................................................10 .....■ .................5.5 Financial system deposits to GDP ........................................21 .....■ ...............73.8 M2 to GDP ............................................................................37 .....■ ...............57.2 Private credit to GDP...............................................................1 .....■ .............202.4 Bank deposits to GDP ...........................................................21 .....■ ...............73.8 Money market instruments to GDP......................................16 .....■ .................0.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................47 .....■ .................3.2 Bank overhead costs.............................................................38 .....■ .................3.5 Public ownership of banks ......................................................1 .....■ .................0.0 Bank operating costs to assets.............................................28 .....■ .................2.9 Non-performing bank loans to total loans .............................19 .....■ .................2.3
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....■ .............100.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................2 .....■ ...............16.9 IPO proceeds amount ...........................................................33 .....■ .................0.3 Share of world IPOs ................................................................2 .....■ ...............11.7
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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United States Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share..................................................................1 .....■ ...............41.7 M&A transaction value to GDP ...............................................9 .....■ .................9.7 Share of total number of M&A deals ......................................1 .....■ ...............30.2
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ....................................................1 .....■ ...1,230,526.0 Insurance density ....................................................................7 .....■ ..........4,089.3 Real growth of direct insurance premiums...........................39 .....■ .................0.0 Insurance penetration............................................................12 .....■ .................0.1 Relative value-added of insurance to GDP..............................9 .....■ .................2.4
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ..............................................................1 .....■ ...............16.3 Share of total number of securitization deals .........................1 .....■ ...............60.3
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
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6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover..............................................2 .....■ ...............24.4 Outright forward foreign exchange turnover ..........................2 .....■ ...............26.7 Foreign exchange swap turnover............................................2 .....■ ...............10.8
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements .............................................................................2 .....■ ...............26.9 Interest rate derivatives turnover: Swaps ...............................2 .....■ ...............20.5 Interest rate derivatives turnover: Options .............................1 .....■ ...............42.4 Foreign exchange derivatives turnover: Currency swaps .......2 .....■ ...............17.0 Foreign exchange derivatives turnover: Options ....................2 .....■ ...............30.0
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio.....................................................3 .....■ .............214.8 Stock market capitalization to GDP.........................................9 .....■ .............143.7 Stock market value traded to GDP..........................................4 .....■ .............308.5 Number of listed companies per 10,000 people...................18 .....■ .................0.2
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ...............3 .....■ ...............66.1 Private international bonds to GDP .........................................7 .....■ .............122.7 Public international bonds to GDP ........................................40 .....■ .................0.1
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
263 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................10 .....■ .................6.2 Venture capital availability .......................................................6 .....■ .................4.2 Ease of access to credit........................................................49 .....■ .................2.7 Financing through local equity market ..................................24 .....■ .................4.4 Ease of access to loans ........................................................22 .....■ .................3.7 Foreign direct investment to GDP ........................................47 .....■ .................1.7
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................12 .....■ ......176,077.5 Commercial bank branches.....................................................5 .....■ ...............35.4 Total number of ATMs.............................................................2 .....■ .............169.2 Total number of point of sale (POS) devices.........................29 .....■ .............171.8 MFI borrowers’ penetration rate ..........................................n/a .........................n/a
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Venezuela Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................28.1
US$ bn
GDP (US$ billions), 2008 .........................................................319.4
36.8%
GDP (current prices) per capita, 2008 ............................11,388.3 53.3%
GDP (PPP) as share (%) of world total, 2008 ........................0.52 Average rate of real GDP growth (%), 2004–08..................10.43
■ ■ ■ ■
Public debt securities .........44.0 Private debt securities........11.9 Banking deposits .................63.7 Equity securities....................n/a Total
119.6
9.9%
Total/GDP: 52.5%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................55 2.5 1
2
3
4
5
6
7
Factors, policies, and institutions
264
1st pillar: Institutional environment .........................................54
2.5
Financial sector liberalization ....................................................54 Corporate governance.................................................................50 Legal and regulatory issues .......................................................55 Contract enforcement..................................................................54
1.2 3.8 2.0 3.0
2nd pillar: Business environment .............................................54
2.9
Human capital ...............................................................................46 Taxes...............................................................................................55 Infrastructure ................................................................................45 Cost of doing business ................................................................51
3.6 1.8 3.0 3.4
3rd pillar: Financial stability......................................................42
4.4
Currency stability............................................................................2 Banking system stability..............................................................44 Risk of sovereign debt crisis ......................................................49
6.2 4.5 2.7 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................49
2.5
Size index .......................................................................................52 Efficiency index.............................................................................34 Financial information disclosure................................................55
1.1 4.6 1.0
5th pillar: Non-banking financial services .............................48
1.5
IPO activity.....................................................................................53 M&A activity..................................................................................53 Insurance .......................................................................................31 Securitization.................................................................................40
1.0 1.0 2.5 1.5
6th pillar: Financial markets......................................................45
1.6
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................55 Bond market development..........................................................31
n/a n/a 1.0 2.2 1
Financial access 7th pillar: Financial access........................................................55
2.1
Commercial access......................................................................54 Retail access.................................................................................46
2.6 1.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Venezuela Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................44 .....■ ...............–0.5 Commitments to WTO agreement on trade in services.......45 .....■ ...............19.9 Domestic financial sector liberalization .................................53 .....■ .................3.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................54 .....■ .................3.4 Efficacy of corporate boards .................................................55 .....■ .................3.7 Reliance on professional management .................................48 .....■ .................4.1 Willingness to delegate.........................................................50 .....■ .................3.3 Strength of auditing and reporting standards........................52 .....■ .................3.8 Ethical behavior of firms........................................................55 .....■ .................2.9 Protection of minority shareholders’ interests......................52 .....■ .................3.5 Official supervisory power ......................................................5 .....■ ...............13.0 Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................55 .....■ .................1.8 Centralization of economic policymaking ..............................55 .....■ .................1.2 Regulation of securities exchanges ......................................52 .....■ .................3.5 Property rights.......................................................................55 .....■ .................2.1 Intellectual property protection .............................................55 .....■ .................2.0 Diversion of public funds.......................................................55 .....■ .................1.8 Public trust of politicians .......................................................51 .....■ .................1.6 Corruption perceptions index ................................................55 .....■ .................1.9 Strength of legal rights index ................................................49 .....■ .................3.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................55 .....■ .................1.5 Judicial independence ...........................................................55 .....■ .................1.4 Irregular payments in judicial decisions ................................55 .....■ .................2.1 Time to enforce a contract ....................................................29 .....■ .............510.0 Number of procedures to enforce a contract .........................9 .....■ ...............29.0 Strength of investor protection .............................................54 .....■ .................2.7 Cost of enforcing contracts...................................................51 .....■ ...............43.7
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................35 .....■ .................4.3 Quality of math and science education.................................48 .....■ .................3.0 Extent of staff training...........................................................49 .....■ .................3.5 Local availability of specialized research and training services .............................................................53 .....■ .................3.4 Brain drain and ease of hiring foreign labor ..........................55 .....■ .................2.7 Tertiary enrollment ................................................................24 .....■ ...............52.0
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................55 .....■ .................2.1 Distortive effect on competition of taxes and subsidies ......55 .....■ .................2.3 Marginal tax variation ............................................................50 .....■ ...............23.7 Time to pay taxes ..................................................................51 .....■ .............864.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................51 .....■ .................3.0 Quality of telephone infrastructure .......................................54 .....■ .................4.6 Internet users ........................................................................42 .....■ ...............20.7 Broadband Internet subscribers ............................................37 .....■ .................3.1 Telephone lines .....................................................................40 .....■ ...............18.4 Mobile telephone subscribers...............................................35 .....■ ...............86.1
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
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2: Country/Economy Profiles
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Venezuela Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................50 .....■ ...............26.8 Cost of registering property ..................................................18 .....■ .................2.2 Cost of closing a business ....................................................53 .....■ ...............38.0 Time to start a business ........................................................54 .....■ .............141.0 Time to register property.......................................................38 .....■ ...............47.0 Time to close a business.......................................................41 .....■ .................4.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
266
Currency stability Change in real effective exchange rate...................................5 .....■ .................5.2 External vulnerability indicator...............................................17 .....■ ...............70.4 Current account balance to GDP.............................................8 .....■ ...............12.3 Dollarization vulnerability indicator ........................................23 .....■ .................0.6 External debt to GDP (developing economies) .......................6 .....■ ...............24.4 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................23 .....■ .................1.3 Financial strengths indicator..................................................47 .....■ .................2.0 Manageability of private debt................................................11 .....■ .................4.5 Aggregate measure of real estate bubbles ..........................n/a .........................n/a
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................50 .....■ .................7.7 Foreign currency sovereign rating.........................................48 .....■ .................7.7 Aggregate macroprudential indicator ....................................51 .....■ .................3.2 Manageability of public debt ...................................................6 .....■ ...............13.8 Credit default swap spreads.................................................n/a .........................n/a
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................51 .....■ ...............22.6 Central bank assets to GDP ..................................................36 .....■ .................0.4 Financial system deposits to GDP ........................................47 .....■ ...............24.7 M2 to GDP ............................................................................53 .....■ ...............28.4 Private credit to GDP.............................................................49 .....■ ...............18.3 Bank deposits to GDP ...........................................................49 .....■ ...............24.5 Money market instruments to GDP......................................27 .....■ .................0.0
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................8 .....■ .................4.9 Bank overhead costs.............................................................45 .....■ .................4.4 Public ownership of banks ....................................................19 .....■ .................5.5 Bank operating costs to assets.............................................51 .....■ .................6.8 Non-performing bank loans to total loans .............................19 .....■ .................2.3
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................46 .....■ .................0.0 Public credit registry coverage ..............................................24 .....■ .................0.0
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................53 .....■ .................0.0 IPO proceeds amount ...........................................................53 .....■ .................0.0 Share of world IPOs ..............................................................53 .....■ .................0.0
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Venezuela Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................48 .....■ .................0.0 M&A transaction value to GDP .............................................53 .....■ .................0.6 Share of total number of M&A deals ....................................52 .....■ .................0.0
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................33 .....■ ..........7,172.0 Insurance density ..................................................................31 .....■ .............259.3 Real growth of direct insurance premiums.............................3 .....■ .................0.2 Insurance penetration............................................................31 .....■ .................0.0 Relative value-added of insurance to GDP............................48 .....■ .................0.3
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................32 .....■ .................1.7 Share of total number of securitization deals .......................52 .....■ .................0.0
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................49 .....■ ...............10.0 Stock market capitalization to GDP.......................................55 .....■ .................3.7 Stock market value traded to GDP........................................54 .....■ .................0.4 Number of listed companies per 10,000 people...................41 .....■ .................0.0
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP............29 .....■ .................1.0 Public domestic bond market capitalization to GDP .............16 .....■ ...............46.1 Private international bonds to GDP .......................................34 .....■ .................3.5 Public international bonds to GDP ........................................14 .....■ .................8.1
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
267 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................49 .....■ .................3.7 Venture capital availability .....................................................53 .....■ .................2.2 Ease of access to credit........................................................34 .....■ .................3.4 Financing through local equity market ..................................54 .....■ .................2.7 Ease of access to loans ........................................................52 .....■ .................2.4 Foreign direct investment to GDP ........................................52 .....■ .................0.3
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................30 .....■ ........51,840.1 Commercial bank branches...................................................20 .....■ ...............18.5 Total number of ATMs...........................................................36 .....■ ...............28.0 Total number of point of sale (POS) devices.........................34 .....■ .................3.0 MFI borrowers’ penetration rate ...........................................21 .....■ .................0.6
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Vietnam Key indicators
Financial assets by major type, 2007
Population (millions), 2008 .......................................................86.3
16.2%
US$ bn
28.4%
GDP (US$ billions), 2008 ...........................................................89.8 GDP (current prices) per capita, 2008 ..............................1,040.4 GDP (PPP) as share (%) of world total, 2008 ........................0.35
0.2%
Average rate of real GDP growth (%), 2004–08....................7.82
■ ■ ■ ■
Public debt securities .........34.2 Private debt securities..........0.2 Banking deposits .................66.6 Equity securities ..................19.5 Total
120.5
55.2%
Total/GDP: 169.5%
Financial Development Index 2009 Rank (out of 55)
Score (1–7 scale)
2009 Index......................................................45 3.0 1
2
3
4
5
6
7
Factors, policies, and institutions
268
1st pillar: Institutional environment .........................................41
3.7
Financial sector liberalization ....................................................39 Corporate governance.................................................................43 Legal and regulatory issues .......................................................38 Contract enforcement..................................................................39
3.2 4.1 3.4 4.0
2nd pillar: Business environment .............................................49
3.4
Human capital ...............................................................................51 Taxes...............................................................................................50 Infrastructure ................................................................................47 Cost of doing business ................................................................44
3.4 3.1 2.9 4.3
3rd pillar: Financial stability......................................................49
3.8
Currency stability..........................................................................46 Banking system stability..............................................................28 Risk of sovereign debt crisis ......................................................53
3.5 5.1 2.5 1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................37
3.3
Size index .......................................................................................28 Efficiency index.............................................................................40 Financial information disclosure................................................39
3.0 4.4 1.7
5th pillar: Non-banking financial services .............................42
1.7
IPO activity.....................................................................................20 M&A activity..................................................................................51 Insurance .......................................................................................44 Securitization.................................................................................39
2.4 1.1 1.8 1.6
6th pillar: Financial markets......................................................43
1.7
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................42 Bond market development ........................................................n/a
n/a n/a 1.7 n/a 1
Financial access 7th pillar: Financial access........................................................32
3.3
Commercial access......................................................................23 Retail access.................................................................................32
4.0 2.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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Vietnam Financial Development Index in detail INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....■ ...............–1.1 Commitments to WTO agreement on trade in services.......26 .....■ ...............52.3 Domestic financial sector liberalization .................................40 .....■ .................2.0
Multiple (18) ..........................2.5 . . . . . . . . . . . . .2.5 Turkey . . . . . . . . . . . . . . . . .83.5 Turkey..................................83.5 Multiple (33) ..........................1.0 . . . . . . . . . . . . .1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12
Corporate governance Extent of incentive-based compensation ..............................36 .....■ .................4.3 Efficacy of corporate boards .................................................41 .....■ .................4.5 Reliance on professional management .................................44 .....■ .................4.2 Willingness to delegate.........................................................46 .....■ .................3.6 Strength of auditing and reporting standards........................51 .....■ .................3.8 Ethical behavior of firms........................................................35 .....■ .................4.0 Protection of minority shareholders’ interests......................35 .....■ .................4.4 Official supervisory power....................................................n/a .........................n/a Private monitoring of the banking industry ..........................n/a .........................n/a
United States ........................5.4 . . . . . . . . . . . .5.4 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Sweden .................................6.5 . . . . . . . . . . . . . . . .6.5 Sweden .................................6.2 . . . . . . . . . . . . . . . .6.2 South Africa...........................6.2 Africa . . . . . . . . . . . . .6.2 Sweden .................................6.7 . . . . . . . . . . . . . . . .6.7 Sweden .................................6.0 . . . . . . . . . . . . . . . .6.0 Multiple (3) ..........................14.0 . . . . . . . . . . . . .14.0 South Africa...........................9.0 Africa . . . . . . . . . . . . .9.0
1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21
Legal and regulatory issues Burden of government regulation .........................................38 .....■ .................2.7 Centralization of economic policymaking ..............................25 .....■ .................3.3 Regulation of securities exchanges ......................................49 .....■ .................4.0 Property rights.......................................................................36 .....■ .................4.4 Intellectual property protection .............................................45 .....■ .................3.0 Diversion of public funds.......................................................38 .....■ .................3.2 Public trust of politicians .......................................................20 .....■ .................3.6 Corruption perceptions index ................................................46 .....■ .................2.7 Strength of legal rights index ................................................18 .....■ .................7.0
Singapore ..............................5.6 . . . . . . . . . . . . . . .5.6 Switzerland . . . . . . . . . . . . . .5.7 Switzerland............................5.7 Sweden .................................5.9 . . . . . . . . . . . . . . . .5.9 Switzerland . . . . . . . . . . . . . .6.5 Switzerland............................6.5 Singapore ..............................6.2 . . . . . . . . . . . . . . .6.2 Denmark . . . . . . . . . . . . . . . .6.6 Denmark................................6.6 Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Multiple (2) ............................9.3 . . . . . . . . . . . . . .9.3 Multiple (3) ..........................10.0 . . . . . . . . . . . . .10.0
1.22 1.23 1.24 1.25 1.26 1.27 1.28
Contract enforcement Effectiveness of law-making bodies .....................................23 .....■ .................4.1 Judicial independence ...........................................................39 .....■ .................3.8 Irregular payments in judicial decisions ................................51 .....■ .................2.8 Time to enforce a contract ......................................................7 .....■ .............295.0 Number of procedures to enforce a contract .......................25 .....■ ...............34.0 Strength of investor protection .............................................54 .....■ .................2.7 Cost of enforcing contracts...................................................41 .....■ ...............31.0
Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Sweden .................................6.6 . . . . . . . . . . . . . . . .6.6 Singapore ..............................6.6 . . . . . . . . . . . . . . .6.6 Singapore ..........................150.0 . . . . . . . . . . . . .150.0 Ireland . . . . . . . . . . . . . . . . .20.0 Ireland..................................20.0 Singapore ..............................9.3 . . . . . . . . . . . . . . .9.3 United States ........................9.4 . . . . . . . . . . . .9.4
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................54 .....■ .................3.4 Quality of math and science education.................................31 .....■ .................4.4 Extent of staff training...........................................................31 .....■ .................4.2 Local availability of specialized research and training services .............................................................51 .....■ .................3.6 Brain drain and ease of hiring foreign labor ..........................38 .....■ .................3.9 Tertiary enrollment ................................................................53 .....■ .................9.5
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................51 .....■ .................2.7 Distortive effect on competition of taxes and subsidies ......35 .....■ .................4.1 Marginal tax variation ............................................................27 .....■ .................7.4 Time to pay taxes ..................................................................54 .....■ ..........1,050.0
Singapore Singapore ..............................6.5 . . . . . . . . . . . . . . .6.5 Hong Hong Kong Kong SAR SAR ....................6.1 . . . . . . . . . .6.1 Germany ..............................–6.9 Germany . . . . . . . . . . . . . . .–6.9 United United Arab Arab Emirates Emirates ..........12.0 . . . . .12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................52 .....■ .................2.8 Quality of telephone infrastructure .......................................41 .....■ .................5.8 Internet users ........................................................................43 .....■ ...............20.5 Broadband Internet subscribers ............................................44 .....■ .................1.5 Telephone lines .....................................................................23 .....■ ...............32.7 Mobile telephone subscribers...............................................53 .....■ ...............27.2
Switzerland............................6.8 Switzerland . . . . . . . . . . . . . .6.8 Finland ...................................6.9 Finland . . . . . . . . . . . . . . . . .6.9 Norway Norway ................................85.0 . . . . . . . . . . . . . . . .85.0 Denmark..............................36.0 Denmark . . . . . . . . . . . . . . .36.0 Switzerland..........................65.9 Switzerland . . . . . . . . . . . . .65.9 United Arab Arab Emirates Emirates ........176.5 United . . . .176.5
2.01 2.02 2.03 2.04
Switzerland............................6.1 Switzerland . . . . . . . . . . . . . .6.1 Singapore Singapore ..............................6.4 . . . . . . . . . . . . . . .6.4 Sweden .................................5.7 Sweden . . . . . . . . . . . . . . . .5.7 Switzerland............................6.3 Switzerland . . . . . . . . . . . . . .6.3 United United Arab Arab Emirates Emirates ............6.0 . . . . . .6.0 Finland .................................93.2 Finland . . . . . . . . . . . . . . . .93.2
(Cont’d.)
2: Country/Economy Profiles
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Vietnam Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.17 2.18 2.19 2.20 2.21 2.22
Cost of doing business Cost of starting a business ...................................................42 .....■ ...............16.8 Cost of registering property ..................................................14 .....■ .................1.2 Cost of closing a business ....................................................30 .....■ ...............15.0 Time to start a business ........................................................49 .....■ ...............50.0 Time to register property.......................................................44 .....■ ...............57.0 Time to close a business.......................................................50 .....■ .................5.0
Denmark................................0.0 Saudi Arabia ..........................0.0 Multiple (4) ............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability 3.01 3.02 3.03 3.04 3.05 3.06
270
Currency stability Change in real effective exchange rate.................................44 .....■ ...............–0.7 External vulnerability indicator.................................................4 .....■ ...............27.3 Current account balance to GDP...........................................52 .....■ ...............–9.4 Dollarization vulnerability indicator ........................................36 .....■ ...............47.9 External debt to GDP (developing economies) .....................18 .....■ ...............39.6 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Brazil....................................11.7 Brazil . . . . . . . . . . . . . . . . . .11.7 Egypt Egypt ...................................13.9 ...................................13.9 Kuwait Kuwait .................................44.7 .................................44.7 Multiple (22) (22) ..........................0.0 ..........................0.0 Multiple China China ...................................10.9 ...................................10.9 Hong Hong Kong Kong SAR SAR ................251.9 ................251.9
3.07 3.08 3.09 3.10
Banking system stability Frequency of banking crises .................................................32 .....■ .................1.5 Financial strengths indicator..................................................47 .....■ .................2.0 Manageability of private debt..................................................2 .....■ .................0.3 Aggregate measure of real estate bubbles.............................3 .....■ .................6.5
Multiple Multiple (14) (14) ..........................0.0 . . . . . . . . . . . . .0.0 Multiple (9) Multiple (9) ............................9.0 ............................9.0 Nigeria Nigeria ...................................0.3 ...................................0.3 Ireland....................................6.7 Ireland....................................6.7
3.11 3.12 3.13 3.14 3.15
Risk of sovereign debt crisis Local currency sovereign rating ............................................47 .....■ .................9.7 Foreign currency sovereign rating.........................................45 .....■ .................8.7 Aggregate macroprudential indicator ....................................53 .....■ .................3.1 Manageability of public debt .................................................36 .....■ ...............48.1 Credit default swap spreads .................................................39 .....■ .............338.4
Multiple Multiple (13) (13) ........................20.0 . . . . . . . . . . . .20.0 Multiple Multiple (13) (13) ........................20.0 ........................20.0 Peru .......................................6.5 .......................................6.5 Peru Chile Chile ......................................5.2 ......................................5.2 Norway Norway ................................32.5 ................................32.5
4th pillar: Banking financial services 4.01 4.02 4.03 4.04 4.05 4.06 4.07
Size index Deposit money bank assets to GDP .....................................23 .....■ ...............85.2 Central bank assets to GDP ..................................................22 .....■ .................1.5 Financial system deposits to GDP ........................................28 .....■ ...............57.8 M2 to GDP ............................................................................18 .....■ ...............95.0 Private credit to GDP.............................................................29 .....■ ...............76.7 Bank deposits to GDP ...........................................................29 .....■ ...............57.8 Money market instruments to GDP .....................................n/a .........................n/a
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................18 .....■ .................4.5 Bank overhead costs...............................................................2 .....■ .................1.0 Public ownership of banks ....................................................55 .....■ ...............73.7 Bank operating costs to assets.............................................27 .....■ .................2.8 Non-performing bank loans to total loans ............................n/a .........................n/a
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................46 .....■ .................0.0 Public credit registry coverage ..............................................11 .....■ ...............13.4
Denmark............................199.3 Denmark . . . . . . . . . . . . . .199.3 Egypt ...................................27.9 Egypt ...................................27.9 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Hong Kong SAR ................312.7 Hong Kong SAR ................312.7 United States ....................202.4 United States ....................202.4 Hong Kong SAR ................267.9 Hong Kong SAR ................267.9 Ireland..................................45.0 Ireland..................................45.0 Saudi Arabia ..........................6.4 Saudi Arabia . . . . . . . . . . . . .6.4 Singapore ..............................1.0 Singapore ..............................1.0 Belgium .................................0.0 Belgium .................................0.0 Japan .....................................0.8 Japan .....................................0.8 Denmark................................0.3 Denmark................................0.3 Australia.............................100.0 Australia . . . . . . . . . . . . . .100.0 China ...................................58.8 China ...................................58.8
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................36 .....■ .................0.3 IPO proceeds amount ...........................................................11 .....■ .................0.9 Share of world IPOs ..............................................................34 .....■ .................0.3
China ...................................19.3 China . . . . SAR . . . .....................2.8 . . . . . . . . .19.3 Hong Kong Hong Kong SAR ....................2.8 China ...................................12.9 China ...................................12.9
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Vietnam Financial Development Index in detail (cont’d.) INDICATOR
■ Development Advantage ■ Development Disadvantage RANK/55
SCORE
BEST PERFORMER
SCORE
5th pillar: Non-banking financial services (cont’d.) 5.04 5.05 5.06
M&A activity M&A market share................................................................51 .....■ .................0.0 M&A transaction value to GDP .............................................51 .....■ .................1.0 Share of total number of M&A deals ....................................40 .....■ .................0.2
United States ......................41.7 Hong Kong SAR ..................16.8 United States ......................30.2
5.07 5.08 5.09 5.10 5.11
Insurance Insurance premiums, direct ..................................................49 .....■ ..........1,082.0 Insurance density ..................................................................50 .....■ ...............12.4 Real growth of direct insurance premiums...........................23 .....■ .................0.1 Insurance penetration............................................................43 .....■ .................0.0 Relative value-added of insurance to GDP ...........................n/a .........................n/a
United States ..........1,230,526.0 . . . . .1,230,526.0 United Kingdom .............8,326.0 United Arab Emirates ............0.3 United Kingdom ....................0.2 Hong Kong SAR ....................3.9
5.12 5.13
Securitization Securitization to GDP ............................................................33 .....■ .................1.6 Share of total number of securitization deals .......................33 .....■ .................0.2
United States ......................16.3 . . . . . . . . . . .16.3 United States ......................60.3
2: Country/Economy Profiles
Part 1.r3
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ...........................................n/a .........................n/a Outright forward foreign exchange turnover........................n/a .........................n/a Foreign exchange swap turnover .........................................n/a .........................n/a
United United United United United United
Kingdom ..................26.3 Kingdom . . . . . . . . .26.3 Kingdom ..................29.2 ..................29.2 Kingdom Kingdom ..................40.8 ..................40.8 Kingdom
6.05 6.06 6.07 6.08
Derivatives markets Interest rate derivatives turnover: Forward rate agreements ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps ............................n/a .........................n/a Interest rate derivatives turnover: Options ..........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ....n/a .........................n/a Foreign exchange derivatives turnover: Options..................n/a .........................n/a
United United United United United United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio...................................................25 .....■ ...............87.8 Stock market capitalization to GDP.......................................52 .....■ ...............20.1 Stock market value traded to GDP........................................43 .....■ ...............17.7 Number of listed companies per 10,000 people...................46 .....■ .................0.0
United Kingdom ................267.7 United Kingdom . . . . . . . .267.7 Hong Kong SAR ................500.5 ................500.5 Hong Kong SAR Hong Kong Kong SAR SAR ................443.6 ................443.6 Hong Hong Kong SAR SAR ....................1.5 ....................1.5 Hong Kong
6.13 6.14 6.15 6.16
Bond market development Private domestic bond market capitalization to GDP ...........n/a .........................n/a Public domestic bond market capitalization to GDP ............n/a .........................n/a Private international bonds to GDP ......................................n/a .........................n/a Public international bonds to GDP........................................n/a .........................n/a
Denmark............................202.7 [r5]Denmark . . . . . . . . . . .202.7 Japan .................................198.6 .................................198.6 Japan Ireland................................279.1 Ireland................................279.1 Panama................................46.9 Panama................................46.9
6.04
271 Kingdom ..................45.1 Kingdom . . . . . . . . .45.1 Kingdom ..................45.8 ..................45.8 Kingdom States ......................42.4 ......................42.4 States Kingdom ..................46.7 Kingdom ..................46.7 Kingdom ..................42.4 ..................42.4 Kingdom
7th pillar: Financial access 7.01 7.02 7.03 7.04 7.05 7.06
Commercial access Financial market sophistication .............................................53 .....■ .................3.4 Venture capital availability .....................................................35 .....■ .................3.0 Ease of access to credit........................................................13 .....■ .................4.1 Financing through local equity market ....................................8 .....■ .................4.8 Ease of access to loans ........................................................40 .....■ .................2.9 Foreign direct investment to GDP ..........................................8 .....■ .................9.5
7.07 7.08 7.09 7.10 7.11
Retail access Market penetration of bank accounts ...................................36 .....■ ..........8,300.0 Commercial bank branches...................................................44 .....■ .................3.3 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices.........................25 .....■ .............292.6 MFI borrowers’ penetration rate .............................................2 .....■ ...............29.0
Switzerland............................6.6 Switzerland . . . . . . . . . . . . . .6.6 Hong Kong SAR ....................4.6 Hong Kong SAR ....................4.6 Panama..................................5.2 Panama..................................5.2 Hong Kong SAR ....................5.3 Hong Kong SAR ....................5.3 Finland ...................................4.7 Finland ...................................4.7 Hong Kong SAR ..................28.9 Hong Kong SAR ..................28.9 Ukraine .......................375,499.3 Ukraine . . . . . . . . . . .375,499.3 Italy......................................53.0 Italy......................................53.0 Canada...............................202.8 Canada...............................202.8 Austria ............................4,889.6 Austria ............................4,889.6 Bangladesh..........................41.2 Bangladesh..........................41.2
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Part 3 Data Tables
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How to Read the Data Tables
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How to Read the Data Tables
The following pages provide detailed data for all 55 economies included in The Financial Development Report 2009. The data tables are organized into seven sections: I. II. III. IV. V. VI. VII.
Institutional environment Business environment Financial stability Banking financial services Non-banking financial services Financial markets Financial access
1.05
1.06
Efficacy of corporate boards
Reliance on professional management
Corporate governance by investors and boards of directors in your country is characterized by (1 = management has little accountability; 7 = investors and boards exert strong supervision of management decisions)
Senior management positions in your country are (1 = usually held by relatives; 7 = held by professional managers chosen for their superior qualification)
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.83
7
Sweden...........................5.87 South Africa ....................5.78 Canada ............................5.68 Australia ..........................5.65 Finland.............................5.64 Norway............................5.61 Singapore ........................5.59 Denmark .........................5.53 Netherlands.....................5.44 Chile ................................5.41 Switzerland .....................5.30 Germany .........................5.26 Belgium...........................5.18 United States ..................5.18 Czech Republic ...............5.17 Slovak Republic...............5.13 United Kingdom ..............5.12 Japan...............................5.11 Malaysia ..........................5.10 United Arab Emirates......5.08 Austria.............................5.06 France .............................5.06 Indonesia.........................4.98 Ireland .............................4.94 Bahrain ............................4.92 Peru.................................4.80 Panama ...........................4.80 Spain ...............................4.72 Hong Kong SAR ..............4.71 Israel ...............................4.69 Korea, Rep. .....................4.67 Brazil ...............................4.67 Jordan .............................4.66 Philippines.......................4.65 India ................................4.63 Egypt...............................4.62 Saudi Arabia ....................4.59 Colombia .........................4.53 Thailand...........................4.51 Russian Federation .........4.51 Vietnam ...........................4.48 Nigeria.............................4.48 Hungary...........................4.46 Poland .............................4.45 China ...............................4.41 Ukraine............................4.40 Kazakhstan ......................4.33 Argentina.........................4.28 Mexico ............................4.26 Kuwait .............................4.26 Pakistan...........................3.91 Bangladesh .....................3.91 Italy .................................3.88 Turkey..............................3.80 Venezuela........................3.66
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
• Survey data: These data are the results drawn from the World Economic Forum’s Executive Opinion Survey.
Survey data
The seven sections correspond to the seven pillars of the Financial Development Index.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
Two types of data are presented in the tables:
• Hard data: These data are indicators obtained from a variety of sources.
|
Part 2.r2
MEAN: 4.97
7
Sweden...........................6.46 Norway............................6.21 Finland.............................6.18 Denmark .........................6.08 Netherlands.....................6.05 Australia ..........................6.01 Singapore ........................5.99 Canada ............................5.96 Switzerland .....................5.86 United States ..................5.85 Ireland .............................5.77 United Kingdom ..............5.73 Germany .........................5.68 Austria.............................5.61 Japan...............................5.56 Belgium...........................5.54 South Africa ....................5.54 Chile ................................5.42 Israel ...............................5.39 Czech Republic ...............5.32 Malaysia ..........................5.26 India ................................5.26 France .............................5.24 Slovak Republic...............5.19 United Arab Emirates......5.09 Brazil ...............................5.08 Hong Kong SAR ..............5.03 Spain ...............................4.96 Korea, Rep. .....................4.91 Poland .............................4.87 China ...............................4.86 Philippines.......................4.85 Argentina.........................4.74 Peru.................................4.70 Indonesia.........................4.70 Thailand...........................4.57 Nigeria.............................4.47 Panama ...........................4.45 Saudi Arabia ....................4.41 Russian Federation .........4.27 Jordan .............................4.23 Turkey..............................4.20 Colombia .........................4.18 Vietnam ...........................4.16 Bahrain ............................4.15 Hungary...........................4.10 Mexico ............................4.07 Venezuela........................4.07 Pakistan...........................4.02 Ukraine............................4.02 Bangladesh .....................3.90 Kuwait .............................3.87 Kazakhstan ......................3.86 Egypt...............................3.74 Italy .................................3.47
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
Data yielded from the World Economic Forum’s Executive Opinion Survey are presented in blue-colored bar graphs. Survey questions asked for responses on a 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 in order to produce country scores. For more information on the Executive Opinion Survey and a detailed explanation of how country scores are computed, please refer to Chapter 1.1. For each Survey variable, the corresponding Survey question and the two extreme answers are shown. Scores are reported with a precision of two decimal points, although exact figures are used to determine rankings. For example, in the case of the variable 1.13 on the burden of government regulation, Kazakhstan’s score is 2.99784 and the United Kingdom’s score is 2.99663. These countries rank 30 and 31 respectively, although they are listed with the same rounded score of 3.00. A dotted line on the graph indicates the mean score across the 55 economies. Standard deviations, which give an indication of how closely or widely the individual responses are spread around the mean country score, can be provided upon request to the Global Competitiveness Network at the World Economic Forum.
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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
RANK COUNTRY/ECONOMY
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 46 46 46 46 46 46 46 46 46
HARD DATA
Austria ...............................7.00 Bahrain ..............................7.00 Belgium .............................7.00 Canada...............................7.00 Denmark............................7.00 Finland ...............................7.00 Germany............................7.00 Hong Kong SAR ................7.00 Ireland................................7.00 Italy....................................7.00 Jordan................................7.00 Netherlands .......................7.00 Norway ..............................7.00 Panama..............................7.00 Singapore ..........................7.00 Spain..................................7.00 Sweden .............................7.00 Switzerland........................7.00 United Arab Emirates ........7.00 United Kingdom.................7.00 United States.....................7.00 Japan .................................6.55 France................................6.51 Egypt .................................6.47 Israel..................................5.94 Australia.............................5.73 Saudi Arabia.......................5.67 Czech Republic..................5.45 Chile ..................................5.37 Hungary .............................5.02 Kuwait ...............................4.81 Peru ...................................4.79 Slovak Republic .................4.19 Brazil..................................3.37 Indonesia ...........................3.36 Mexico...............................3.35 Korea, Rep.........................3.21 Malaysia ............................2.93 Poland................................2.72 Philippines .........................2.35 Nigeria ...............................1.94 Colombia ...........................1.89 Russian Federation............1.47 Venezuela ..........................1.46 Argentina ...........................1.06 Bangladesh........................1.00 China .................................1.00 India...................................1.00 Kazakhstan ........................1.00 Pakistan .............................1.00 South Africa.......................1.00 Thailand .............................1.00 Turkey ................................1.00 Ukraine ..............................1.00 Vietnam .............................1.00
SOURCE: Menzie Chinn and Hiro Ito. 2009. “Financial Openness Index.” Dataset available at http://www.ssc.wisc.edu/~mchinn/research.html. Interaction results from World Economic Forum analysis.
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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
RANK COUNTRY/ECONOMY
1 1 1 1 1 1 1 1 1 1 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 47 47 47 47 n/a n/a n/a n/a
HARD DATA
Austria ...............................7.00 Belgium .............................7.00 Denmark............................7.00 France................................7.00 Germany............................7.00 Ireland................................7.00 Italy....................................7.00 Netherlands .......................7.00 Spain..................................7.00 Sweden .............................7.00 United Kingdom.................7.00 Switzerland........................6.94 Canada...............................6.85 Japan .................................6.73 United States.....................6.56 Bahrain ..............................6.21 Hungary .............................6.20 Norway ..............................6.18 Singapore ..........................5.87 Saudi Arabia.......................5.79 Jordan................................5.72 Panama..............................5.57 United Arab Emirates ........5.33 Vietnam .............................4.90 Turkey ................................4.86 Czech Republic..................4.83 Malaysia ............................4.61 Nigeria ...............................4.47 Philippines .........................4.37 China .................................4.21 Finland ...............................3.94 Thailand .............................3.72 Hong Kong SAR ................3.66 Egypt .................................3.55 Australia.............................3.46 Slovak Republic .................3.33 Poland................................2.82 Kuwait ...............................2.81 Argentina ...........................2.77 South Africa.......................2.58 Israel..................................2.44 Colombia ...........................2.31 Indonesia ...........................2.09 Peru ...................................1.84 Venezuela ..........................1.47 Mexico...............................1.29 Bangladesh........................1.00 Brazil..................................1.00 Chile ..................................1.00 India...................................1.00 Pakistan .............................1.00 Kazakhstan...........................n/a Korea, Rep. ..........................n/a Russian Federation ..............n/a Ukraine ................................n/a
SOURCE: The World Bank, World Trade Indicators 2008
Hard data While Survey data provide qualitative information, hard data provide an objective measure of a quantity (for example, gross domestic product, IPO market share, insurance direct premiums, and so on).We use the latest data available from international organizations (such as the International Monetary Fund, the World Bank, various United Nations agencies, the Bank of International Settlements, and the International Telecommunication Union), the research of respected academics in the field, and firms of international stature who engage in professional research on the topics related to the Index. In the following pages, hard data variables are presented in black-shaded bar graphs. For each indicator, a short description appears at the top of the page.The base year (i.e., the year when the majority of the data were collected) follows the description.When the year differs from the base year for a particular economy, this is indicated in a footnote. A more detailed description and the full source for each variable can be found in the Technical Notes and Sources section at the end of this Report. When data are not available or are too outdated, “n/a” is used in lieu of the rank and the value. In the case of hard data, true ties between two or more economies are possible. In such cases, shared rankings are indicated accordingly. For example, the time it takes to close a business is 4.20 years in both Egypt and Kuwait.They share the rank of 46 for that variable in Table 2.22.
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Section I: Institutional environment...............................................279 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 1.24 1.25 1.26 1.27 1.28
Capital account liberalization.........................................280 Commitments to WTO agreement on trade in services.....................................................................280 Domestic financial sector liberalization.........................281 Extent of incentive-based compensation .....................281 Efficacy of corporate boards.........................................282 Reliance on professional management ........................282 Willingness to delegate ................................................283 Strength of auditing and reporting standards ...............283 Ethical behavior of firms ...............................................284 Protection of minority shareholdersâ&#x20AC;&#x2122; interests .............284 Official supervisory power ............................................285 Private monitoring of the banking industry...................285 Burden of government regulation.................................286 Centralization of economic policymaking .....................286 Regulation of securities exchanges..............................287 Property rights ..............................................................287 Intellectual property protection.....................................288 Diversion of public funds ..............................................288 Public trust of politicians...............................................289 Corruption perceptions index........................................289 Strength of legal rights index........................................290 Effectiveness of law-making bodies.............................290 Judicial independence ..................................................291 Irregular payments in judicial decisions ........................291 Time to enforce a contract............................................292 Number of procedures to enforce a contract ...............292 Strength of investor protection.....................................293 Cost of enforcing contracts ..........................................293
Section II: Business environment...................................................295 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22
Quality of management schools...................................296 Quality of math and science education ........................296 Extent of staff training ..................................................297 Local availability of specialized research and training services .....................................................297 Brain drain and ease of hiring foreign labor..................298 Tertiary enrollment .......................................................298 Irregular payments in tax collection..............................299 Distortive effect on competition of taxes and subsidies ................................................................299 Marginal tax variation....................................................300 Time to pay taxes .........................................................300 Quality of overall infrastructure ....................................301 Quality of telephone infrastructure...............................301 Internet users ...............................................................302 Broadband Internet subscribers....................................302 Telephone lines .............................................................303 Mobile telephone subscribers ......................................303 Cost of starting a business ...........................................304 Cost of registering property..........................................304 Cost of closing a business............................................305 Time to start a business ...............................................305 Time to register property ..............................................306 Time to close a business ..............................................306
Section III: Financial stability..........................................................307 3.01 3.02
Change in real effective exchange rate ........................308 External vulnerability indicator ......................................308
3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 3.13 3.14 3.15
Current account balance to GDP ..................................309 Dollarization vulnerability indicator................................309 External debt to GDP (developing economies).............310 Net international investment position to GDP (advanced economies) ..................................................310 Frequency of banking crises.........................................311 Financial strengths indicator .........................................311 Manageability of private debt .......................................312 Aggregate measure of real estate bubbles ..................312 Local currency sovereign rating....................................313 Foreign currency sovereign rating ................................313 Aggregate macroprudential indicator............................314 Manageability of public debt.........................................314 Credit default swap spreads.........................................315
Section IV: Banking financial services.........................................317 4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 4.09 4.10 4.11 4.12 4.13 4.14
Deposit money bank assets to GDP ............................318 Central bank assets to GDP..........................................318 Financial system deposits to GDP................................319 M2 to GDP....................................................................319 Private credit to GDP ....................................................320 Bank deposits to GDP ..................................................320 Money market instruments to GDP .............................321 Aggregate profitability indicator ....................................321 Bank overhead costs ....................................................322 Public ownership of banks............................................322 Bank operating costs to assets ....................................323 Non-performing bank loans to total loans.....................323 Private credit bureau coverage .....................................324 Public credit registry coverage .....................................324
Section V: Non-banking financial services .................................325 5.01 5.02 5.03 5.04 5.05 5.06 5.07 5.08 5.09 5.10 5.11 5.12 5.13
IPO market share..........................................................326 IPO proceeds amount...................................................326 Share of world IPOs .....................................................327 M&A market share .......................................................327 M&A transaction value to GDP.....................................328 Share of total number of M&A deals............................328 Insurance premiums, direct ..........................................329 Insurance density..........................................................329 Real growth of direct insurance premiums ..................330 Insurance penetration ...................................................330 Relative value-added of insurance to GDP ...................331 Securitization to GDP....................................................331 Share of total number of securitization deals ...............332
Section VI: Financial markets..........................................................333 6.01 6.02 6.03 6.04 6.05 6.06 6.07 6.08 6.09 6.10
Spot foreign exchange turnover ...................................334 Outright forward foreign exchange turnover ................334 Foreign exchange swap turnover .................................335 Interest rate derivatives turnover: Forward rate agreements...................................................................335 Interest rate derivatives turnover: Swaps.....................336 Interest rate derivatives turnover: Options...................336 Foreign exchange derivatives turnover: Currency swaps............................................................................337 Foreign exchange derivatives turnover: Options ..........337 Stock market turnover ratio ..........................................338 Stock market capitalization to GDP ..............................338
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Stock market value traded to GDP ...............................339 Number of listed companies per 10,000 people ..........339 Private domestic bond market capitalization to GDP ...340 Public domestic bond market capitalization to GDP.....340 Private international bonds to GDP...............................341 Public international bonds to GDP ................................341
Section VII: Financial access ..........................................................343 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11
278
Financial market sophistication.....................................344 Venture capital availability .............................................344 Ease of access to credit ...............................................345 Financing through local equity market..........................345 Ease of access to loans ................................................346 Foreign direct investment to GDP ................................346 Market penetration of bank accounts...........................347 Commercial bank branches ..........................................347 Total number of ATMs ..................................................348 Total number of point of sale (POS) devices ................348 MFI borrowersâ&#x20AC;&#x2122; penetration rate ..................................349
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Data Tables
Section I Institutional environment 279
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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
RANK COUNTRY/ECONOMY
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 46 46 46 46 46 46 46 46 46
HARD DATA
Austria ...............................7.00 Bahrain ..............................7.00 Belgium .............................7.00 Canada...............................7.00 Denmark............................7.00 Finland ...............................7.00 Germany............................7.00 Hong Kong SAR ................7.00 Ireland................................7.00 Italy....................................7.00 Jordan................................7.00 Netherlands .......................7.00 Norway ..............................7.00 Panama..............................7.00 Singapore ..........................7.00 Spain..................................7.00 Sweden .............................7.00 Switzerland........................7.00 United Arab Emirates ........7.00 United Kingdom.................7.00 United States.....................7.00 Japan .................................6.55 France................................6.51 Egypt .................................6.47 Israel..................................5.94 Australia.............................5.73 Saudi Arabia.......................5.67 Czech Republic..................5.45 Chile ..................................5.37 Hungary .............................5.02 Kuwait ...............................4.81 Peru ...................................4.79 Slovak Republic .................4.19 Brazil..................................3.37 Indonesia ...........................3.36 Mexico...............................3.35 Korea, Rep.........................3.21 Malaysia ............................2.93 Poland................................2.72 Philippines .........................2.35 Nigeria ...............................1.94 Colombia ...........................1.89 Russian Federation............1.47 Venezuela ..........................1.46 Argentina ...........................1.06 Bangladesh........................1.00 China .................................1.00 India...................................1.00 Kazakhstan ........................1.00 Pakistan .............................1.00 South Africa.......................1.00 Thailand .............................1.00 Turkey ................................1.00 Ukraine ..............................1.00 Vietnam .............................1.00
SOURCE: Menzie Chinn and Hiro Ito. 2009. “Financial Openness Index.” Dataset available at http://www.ssc.wisc.edu/~mchinn/research.html. Interaction results from World Economic Forum analysis.
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
RANK COUNTRY/ECONOMY
1 1 1 1 1 1 1 1 1 1 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 47 47 47 47 n/a n/a n/a n/a
HARD DATA
Austria ...............................7.00 Belgium .............................7.00 Denmark............................7.00 France................................7.00 Germany............................7.00 Ireland................................7.00 Italy....................................7.00 Netherlands .......................7.00 Spain..................................7.00 Sweden .............................7.00 United Kingdom.................7.00 Switzerland........................6.94 Canada...............................6.85 Japan .................................6.73 United States.....................6.56 Bahrain ..............................6.21 Hungary .............................6.20 Norway ..............................6.18 Singapore ..........................5.87 Saudi Arabia.......................5.79 Jordan................................5.72 Panama..............................5.57 United Arab Emirates ........5.33 Vietnam .............................4.90 Turkey ................................4.86 Czech Republic..................4.83 Malaysia ............................4.61 Nigeria ...............................4.47 Philippines .........................4.37 China .................................4.21 Finland ...............................3.94 Thailand .............................3.72 Hong Kong SAR ................3.66 Egypt .................................3.55 Australia.............................3.46 Slovak Republic .................3.33 Poland................................2.82 Kuwait ...............................2.81 Argentina ...........................2.77 South Africa.......................2.58 Israel..................................2.44 Colombia ...........................2.31 Indonesia ...........................2.09 Peru ...................................1.84 Venezuela ..........................1.47 Mexico...............................1.29 Bangladesh........................1.00 Brazil..................................1.00 Chile ..................................1.00 India...................................1.00 Pakistan .............................1.00 Kazakhstan...........................n/a Korea, Rep. ..........................n/a Russian Federation ..............n/a Ukraine ................................n/a
SOURCE: The World Bank, World Trade Indicators 2008
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1.03
1.04
Domestic financial sector liberalization
Extent of incentive-based compensation
This index measures the degree of domestic financial sector liberalization within a country, standardized on a 1–7 scale | 2009
Cash compensation of management (1 = is based exclusively on salary; 7 = is made up in large part of performance-based benefits [bonus, stock options, etc.])
RANK COUNTRY/ECONOMY
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 n/a n/a
HARD DATA
Australia.............................7.00 Austria ...............................7.00 Bahrain ..............................7.00 Belgium .............................7.00 Canada...............................7.00 Denmark............................7.00 Finland ...............................7.00 France................................7.00 Germany............................7.00 Hong Kong SAR ................7.00 Ireland................................7.00 Italy....................................7.00 Japan .................................7.00 Malaysia ............................7.00 Netherlands .......................7.00 Norway ..............................7.00 Panama..............................7.00 Singapore ..........................7.00 Spain..................................7.00 Sweden .............................7.00 United Kingdom.................7.00 United States.....................7.00 Nigeria ...............................6.47 South Africa.......................6.33 Israel..................................5.94 United Arab Emirates ........5.70 Thailand .............................5.59 Chile ..................................5.37 Philippines .........................5.34 Brazil..................................5.27 Switzerland........................5.26 Mexico...............................4.90 Colombia ...........................4.89 Peru ...................................4.79 Saudi Arabia.......................4.74 Argentina ...........................4.65 Korea, Rep.........................4.08 Kuwait ...............................4.02 Vietnam .............................3.97 Czech Republic..................3.84 Egypt .................................3.69 Pakistan .............................3.66 Kazakhstan ........................3.58 Hungary .............................3.54 Poland................................3.54 Ukraine ..............................3.38 China .................................3.26 India...................................3.19 Slovak Republic .................3.17 Indonesia ...........................2.80 Turkey ................................2.78 Russian Federation............2.16 Venezuela ..........................1.00 Bangladesh ..........................n/a Jordan..................................n/a
SOURCE: Graciela Kaminsky and Sergio Schmukler. 2003. “Short-Run Pain, Long-Run Gain: The Effects of Financial Liberalization.” IMF Working Paper 03/34 Washington, DC: International Monetary Fund. Updated as of 2009 based on World Economic Forum analysis.
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.41
7
United States ..................5.43 Singapore ........................5.28 Canada ............................5.21 Australia ..........................5.11 Hong Kong SAR ..............5.07 Germany .........................5.01 Switzerland .....................5.01 France .............................4.99 United Kingdom ..............4.99 South Africa ....................4.95 Slovak Republic...............4.93 Chile ................................4.83 Malaysia ..........................4.68 United Arab Emirates......4.67 Sweden...........................4.67 Denmark .........................4.65 Israel ...............................4.64 China ...............................4.63 Ireland .............................4.62 Czech Republic ...............4.62 Panama ...........................4.61 Austria.............................4.58 Netherlands.....................4.57 Indonesia.........................4.55 Poland .............................4.54 Belgium...........................4.50 Kuwait .............................4.50 India ................................4.47 Brazil ...............................4.46 Finland.............................4.45 Bahrain ............................4.45 Japan...............................4.37 Argentina.........................4.37 Hungary...........................4.36 Spain ...............................4.36 Vietnam ...........................4.34 Russian Federation .........4.33 Korea, Rep. .....................4.31 Norway............................4.26 Saudi Arabia ....................4.25 Ukraine............................4.13 Thailand...........................4.10 Philippines.......................4.09 Italy .................................4.09 Kazakhstan ......................4.01 Mexico ............................3.98 Peru.................................3.80 Egypt...............................3.79 Colombia .........................3.70 Pakistan...........................3.65 Nigeria.............................3.59 Jordan .............................3.47 Turkey..............................3.41 Venezuela........................3.39 Bangladesh .....................2.83
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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1.05
1.06
Efficacy of corporate boards
Reliance on professional management
Corporate governance by investors and boards of directors in your country is characterized by (1 = management has little accountability; 7 = investors and boards exert strong supervision of management decisions)
Senior management positions in your country are (1 = usually held by relatives; 7 = held by professional managers chosen for their superior qualification)
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.83
7
Sweden...........................5.87 South Africa ....................5.78 Canada ............................5.68 Australia ..........................5.65 Finland.............................5.64 Norway............................5.61 Singapore ........................5.59 Denmark .........................5.53 Netherlands.....................5.44 Chile ................................5.41 Switzerland .....................5.30 Germany .........................5.26 Belgium...........................5.18 United States ..................5.18 Czech Republic ...............5.17 Slovak Republic...............5.13 United Kingdom ..............5.12 Japan...............................5.11 Malaysia ..........................5.10 United Arab Emirates......5.08 Austria.............................5.06 France .............................5.06 Indonesia.........................4.98 Ireland .............................4.94 Bahrain ............................4.92 Peru.................................4.80 Panama ...........................4.80 Spain ...............................4.72 Hong Kong SAR ..............4.71 Israel ...............................4.69 Korea, Rep. .....................4.67 Brazil ...............................4.67 Jordan .............................4.66 Philippines.......................4.65 India ................................4.63 Egypt...............................4.62 Saudi Arabia ....................4.59 Colombia .........................4.53 Thailand...........................4.51 Russian Federation .........4.51 Vietnam ...........................4.48 Nigeria.............................4.48 Hungary...........................4.46 Poland .............................4.45 China ...............................4.41 Ukraine............................4.40 Kazakhstan ......................4.33 Argentina.........................4.28 Mexico ............................4.26 Kuwait .............................4.26 Pakistan...........................3.91 Bangladesh .....................3.91 Italy .................................3.88 Turkey..............................3.80 Venezuela........................3.66
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.97
7
Sweden...........................6.46 Norway............................6.21 Finland.............................6.18 Denmark .........................6.08 Netherlands.....................6.05 Australia ..........................6.01 Singapore ........................5.99 Canada ............................5.96 Switzerland .....................5.86 United States ..................5.85 Ireland .............................5.77 United Kingdom ..............5.73 Germany .........................5.68 Austria.............................5.61 Japan...............................5.56 Belgium...........................5.54 South Africa ....................5.54 Chile ................................5.42 Israel ...............................5.39 Czech Republic ...............5.32 Malaysia ..........................5.26 India ................................5.26 France .............................5.24 Slovak Republic...............5.19 United Arab Emirates......5.09 Brazil ...............................5.08 Hong Kong SAR ..............5.03 Spain ...............................4.96 Korea, Rep. .....................4.91 Poland .............................4.87 China ...............................4.86 Philippines.......................4.85 Argentina.........................4.74 Peru.................................4.70 Indonesia.........................4.70 Thailand...........................4.57 Nigeria.............................4.47 Panama ...........................4.45 Saudi Arabia ....................4.41 Russian Federation .........4.27 Jordan .............................4.23 Turkey..............................4.20 Colombia .........................4.18 Vietnam ...........................4.16 Bahrain ............................4.15 Hungary...........................4.10 Mexico ............................4.07 Venezuela........................4.07 Pakistan...........................4.02 Ukraine............................4.02 Bangladesh .....................3.90 Kuwait .............................3.87 Kazakhstan ......................3.86 Egypt...............................3.74 Italy .................................3.47
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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1.07
1.08
Willingness to delegate
Strength of auditing and reporting standards
Willingness to delegate authority to subordinates is (1 = low—top management controls all important decisions; 7 = high—authority is mostly delegated to business unit heads and other lower-level managers)
Financial auditing and reporting standards regarding company financial performance in your country are (1 = extremely weak; 7 = extremely strong—the best in the world)
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.32
7
Sweden...........................6.23 Denmark .........................5.90 Netherlands.....................5.76 Norway............................5.73 United States ..................5.39 Finland.............................5.36 Switzerland .....................5.31 Germany .........................5.18 Canada ............................5.15 Austria.............................5.00 Australia ..........................5.00 Belgium...........................4.96 Japan...............................4.85 United Kingdom ..............4.81 United Arab Emirates......4.79 Singapore ........................4.76 Malaysia ..........................4.65 Ireland .............................4.58 Slovak Republic...............4.56 South Africa ....................4.52 Indonesia.........................4.51 Kuwait .............................4.50 Bahrain ............................4.50 Egypt...............................4.37 Czech Republic ...............4.35 Saudi Arabia ....................4.29 Panama ...........................4.28 India ................................4.28 Philippines.......................4.24 Hong Kong SAR ..............4.24 Brazil ...............................4.22 France .............................4.18 Israel ...............................4.13 Spain ...............................4.13 Chile ................................4.06 Nigeria.............................4.02 Jordan .............................4.02 Peru.................................3.92 Argentina.........................3.91 Poland .............................3.88 China ...............................3.86 Colombia .........................3.81 Korea, Rep. .....................3.66 Thailand...........................3.62 Mexico ............................3.62 Vietnam ...........................3.58 Pakistan...........................3.48 Kazakhstan ......................3.39 Turkey..............................3.33 Venezuela........................3.33 Russian Federation .........3.26 Ukraine............................3.20 Italy .................................3.05 Hungary...........................2.96 Bangladesh .....................2.92
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 5.08
7
South Africa ....................6.22 Finland.............................6.18 Sweden...........................6.12 Norway............................6.11 Singapore ........................6.09 Canada ............................6.08 Hong Kong SAR ..............6.01 Australia ..........................6.00 Austria.............................5.98 Netherlands.....................5.93 Denmark .........................5.85 Germany .........................5.79 Switzerland .....................5.67 Belgium...........................5.65 United Kingdom ..............5.63 Chile ................................5.58 France .............................5.56 India ................................5.53 Jordan .............................5.43 United Arab Emirates......5.41 Bahrain ............................5.35 Ireland .............................5.34 Hungary...........................5.30 Japan...............................5.29 United States ..................5.29 Czech Republic ...............5.25 Israel ...............................5.24 Malaysia ..........................5.24 Panama ...........................5.11 Egypt...............................5.07 Thailand...........................5.03 Saudi Arabia ....................5.01 Spain ...............................4.99 Korea, Rep. .....................4.93 Poland .............................4.89 Philippines.......................4.86 Slovak Republic...............4.84 Kuwait .............................4.83 Peru.................................4.79 Mexico ............................4.74 Brazil ...............................4.72 China ...............................4.71 Indonesia.........................4.63 Pakistan...........................4.35 Turkey..............................4.22 Colombia .........................4.20 Kazakhstan ......................4.07 Italy .................................3.95 Nigeria.............................3.92 Argentina.........................3.88 Vietnam ...........................3.85 Venezuela........................3.77 Ukraine............................3.68 Russian Federation .........3.66 Bangladesh .....................3.59
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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1.09
1.10
Ethical behavior of firms
Protection of minority shareholdersâ&#x20AC;&#x2122; interests
The corporate ethics (ethical behavior in interactions with public officials, politicians, and other enterprises) of firms in your country are (1 = among the worldâ&#x20AC;&#x2122;s worst; 7 = among the best in the world)
Interests of minority shareholders in your country are (1 = not protected by law; 7 = protected by law and actively enforced)
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.72
7
Sweden...........................6.66 Finland.............................6.61 Denmark .........................6.58 Singapore ........................6.51 Switzerland .....................6.37 Netherlands.....................6.36 Norway............................6.35 Canada ............................6.24 Australia ..........................6.20 Austria.............................6.16 Germany .........................5.93 United Kingdom ..............5.87 Hong Kong SAR ..............5.82 Ireland .............................5.57 United Arab Emirates......5.54 Belgium...........................5.52 Chile ................................5.47 United States ..................5.46 Japan...............................5.39 France .............................5.38 Bahrain ............................5.32 Israel ...............................5.19 Jordan .............................4.97 Saudi Arabia ....................4.90 Spain ...............................4.85 South Africa ....................4.71 Malaysia ..........................4.68 Korea, Rep. .....................4.59 Poland .............................4.50 Egypt...............................4.37 China ...............................4.26 Kuwait .............................4.21 India ................................4.11 Panama ...........................4.02 Vietnam ...........................4.00 Thailand...........................3.96 Colombia .........................3.89 Czech Republic ...............3.85 Slovak Republic...............3.84 Turkey..............................3.77 Peru.................................3.71 Italy .................................3.64 Kazakhstan ......................3.63 Brazil ...............................3.62 Mexico ............................3.60 Hungary...........................3.59 Pakistan...........................3.58 Indonesia.........................3.52 Nigeria.............................3.47 Russian Federation .........3.37 Philippines.......................3.32 Argentina.........................3.24 Ukraine............................3.23 Bangladesh .....................3.08 Venezuela........................2.87
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.68
7
Sweden...........................6.01 Finland.............................5.86 Norway............................5.81 Denmark .........................5.71 Singapore ........................5.67 Canada ............................5.58 South Africa ....................5.48 Germany .........................5.41 Jordan .............................5.31 Australia ..........................5.22 Austria.............................5.21 United Arab Emirates......5.20 Netherlands.....................5.19 Malaysia ..........................5.13 United Kingdom ..............5.12 Belgium...........................5.08 United States ..................5.05 Chile ................................5.03 Bahrain ............................5.01 Israel ...............................5.01 Ireland .............................4.98 Hong Kong SAR ..............4.97 Japan...............................4.93 India ................................4.93 Switzerland .....................4.88 France .............................4.85 Thailand...........................4.81 Saudi Arabia ....................4.73 Indonesia.........................4.70 Peru.................................4.58 Brazil ...............................4.58 Egypt...............................4.56 Poland .............................4.54 Panama ...........................4.50 Vietnam ...........................4.40 Spain ...............................4.37 Slovak Republic...............4.36 Nigeria.............................4.36 China ...............................4.35 Mexico ............................4.35 Korea, Rep. .....................4.33 Hungary...........................4.33 Philippines.......................4.31 Kuwait .............................4.16 Colombia .........................4.10 Czech Republic ...............4.09 Pakistan...........................4.07 Turkey..............................3.95 Kazakhstan ......................3.75 Argentina.........................3.71 Bangladesh .....................3.65 Venezuela........................3.51 Italy .................................3.41 Russian Federation .........3.17 Ukraine............................2.97
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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1.11
1.12
Official supervisory power
Private monitoring of the banking industry
This index measures the extent to which official supervisory authorities have the authority to take specific actions to prevent and correct problems | 2006
This index measures the degree to which the private sector monitors the banking industry (higher percentage values indicate greater transparency) | 2006
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 1 1 4 5 5 5 5 5 5 11 11 13 13 13 13 13 18 18 20 20 22 22 24 24 24 27 28 28 28 28 32 33 34 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Brazil................................14.00 Hungary ...........................14.00 Switzerland......................14.00 Singapore ........................13.50 Australia...........................13.00 Ireland..............................13.00 Malaysia ..........................13.00 Saudi Arabia.....................13.00 United States...................13.00 Venezuela ........................13.00 Belgium ...........................12.50 Korea, Rep.......................12.50 Bahrain ............................12.00 Japan ...............................12.00 Panama............................12.00 Peru .................................12.00 Thailand ...........................12.00 Mexico.............................11.50 Spain................................11.50 Argentina .........................11.00 Chile ................................11.00 Austria .............................10.50 South Africa.....................10.50 Czech Republic................10.00 Denmark..........................10.00 India.................................10.00 Poland................................9.50 Finland ...............................9.00 France................................9.00 Germany............................9.00 United Kingdom.................9.00 Russian Federation............8.50 Italy....................................7.50 Canada...............................7.00 Bangladesh ..........................n/a China....................................n/a Colombia..............................n/a Egypt ...................................n/a Hong Kong SAR...................n/a Indonesia .............................n/a Israel ....................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Netherlands .........................n/a Nigeria .................................n/a Norway ................................n/a Pakistan ...............................n/a Philippines ...........................n/a Slovak Republic ...................n/a Sweden ...............................n/a Turkey ..................................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Vietnam ...............................n/a
SOURCE: James Barth, Gerard Caprio, and Ross Levine. 2007. “Bank Regulations Are Changing: But for Better or Worse?” World Bank Discussion Paper No. 4646, Washington, DC
1 2 2 2 2 2 2 2 2 10 10 10 10 10 10 10 10 10 10 10 10 22 22 22 22 22 22 22 22 30 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
South Africa.......................9.00 Australia.............................8.00 Bahrain ..............................8.00 Japan .................................8.00 Mexico...............................8.00 Netherlands .......................8.00 Singapore ..........................8.00 Spain..................................8.00 Thailand .............................8.00 Argentina ...........................7.00 Brazil..................................7.00 France................................7.00 Germany............................7.00 Hungary .............................7.00 Ireland................................7.00 Italy....................................7.00 Korea, Rep.........................7.00 Malaysia ............................7.00 Panama..............................7.00 United Kingdom.................7.00 United States.....................7.00 Belgium .............................6.00 Chile ..................................6.00 Czech Republic..................6.00 Finland ...............................6.00 Jordan................................6.00 Russian Federation............6.00 Sweden .............................6.00 Switzerland........................6.00 Peru ...................................5.00 Austria .................................n/a Bangladesh ..........................n/a Canada.................................n/a China....................................n/a Colombia..............................n/a Denmark ..............................n/a Egypt ...................................n/a Hong Kong SAR...................n/a India .....................................n/a Indonesia .............................n/a Israel ....................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Norway ................................n/a Pakistan ...............................n/a Philippines ...........................n/a Poland..................................n/a Saudi Arabia.........................n/a Slovak Republic ...................n/a Turkey ..................................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Venezuela ............................n/a Vietnam ...............................n/a
SOURCE: James Barth, Gerard Caprio, and Ross Levine. 2007. “Bank Regulations Are Changing: But for Better or Worse?” World Bank Discussion Paper No. 4646, Washington, DC
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1.13
1.14
Burden of government regulation
Centralization of economic policymaking
Complying with administrative requirements for businesses (permits, regulations, reporting) issued by the government in your country is (1 = burdensome; 7 = not burdensome)
Economic policymaking in your country is (1 = centralizedâ&#x20AC;&#x201D; national government controls almost all important decisions; 7 = decentralizedâ&#x20AC;&#x201D;states and cities have important decision rights affecting economic development)
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 3.21
7
Singapore ........................5.57 Hong Kong SAR ..............5.17 United Arab Emirates......4.63 Switzerland .....................4.28 Finland.............................4.27 Malaysia ..........................4.05 Jordan .............................4.01 Sweden...........................3.99 Saudi Arabia ....................3.97 China ...............................3.91 Japan...............................3.90 Indonesia.........................3.88 Denmark .........................3.82 Bahrain ............................3.72 Panama ...........................3.71 Chile ................................3.56 Canada ............................3.55 Austria.............................3.53 Norway............................3.48 Thailand...........................3.46 United States ..................3.39 Pakistan...........................3.29 South Africa ....................3.23 Australia ..........................3.20 Egypt...............................3.15 Ireland .............................3.13 Nigeria.............................3.13 Israel ...............................3.13 Germany .........................3.03 Kazakhstan ......................3.00 United Kingdom ..............3.00 Slovak Republic...............2.94 Netherlands.....................2.94 Turkey..............................2.92 India ................................2.88 Korea, Rep. .....................2.83 Spain ...............................2.71 Vietnam ...........................2.71 Colombia .........................2.69 Ukraine............................2.69 Argentina.........................2.68 Poland .............................2.67 Belgium...........................2.67 Philippines.......................2.67 Czech Republic ...............2.66 Kuwait .............................2.63 Mexico ............................2.58 Peru.................................2.52 Bangladesh .....................2.47 Russian Federation .........2.43 France .............................2.33 Italy .................................2.17 Hungary...........................2.13 Brazil ...............................1.85 Venezuela........................1.84
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 3.33
7
Switzerland .....................5.65 Belgium...........................5.08 Spain ...............................4.75 Indonesia.........................4.75 Germany .........................4.69 Poland .............................4.68 United States ..................4.45 United Arab Emirates......4.45 Australia ..........................4.43 Austria.............................4.42 Canada ............................4.38 Czech Republic ...............4.30 Finland.............................4.22 Netherlands.....................3.93 Denmark .........................3.87 Malaysia ..........................3.84 Israel ...............................3.80 China ...............................3.73 Sweden...........................3.69 Italy .................................3.66 India ................................3.65 Slovak Republic...............3.55 Hong Kong SAR ..............3.53 Kazakhstan ......................3.45 Vietnam ...........................3.27 Ukraine............................3.27 Korea, Rep. .....................3.25 Saudi Arabia ....................3.25 Peru.................................3.22 Mexico ............................3.12 Norway............................3.11 Colombia .........................3.08 Pakistan...........................3.07 Nigeria.............................2.91 Philippines.......................2.91 France .............................2.90 Hungary...........................2.90 Jordan .............................2.84 Russian Federation .........2.79 Brazil ...............................2.77 South Africa ....................2.71 Thailand...........................2.71 United Kingdom ..............2.65 Panama ...........................2.56 Bahrain ............................2.50 Japan...............................2.47 Turkey..............................2.39 Chile ................................2.36 Kuwait .............................2.28 Egypt...............................2.26 Singapore ........................2.20 Ireland .............................1.83 Bangladesh .....................1.81 Argentina.........................1.64 Venezuela........................1.22
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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1.15
1.16
Regulation of securities exchanges
Property rights
Regulation of securities exchanges in your country is (1 = not transparent, ineffective, and subject to undue influence from industry and government; 7 = transparent, effective, and independent from undue influence from industry and government)
Property rights, including over financial assets (1 = are poorly defined and not protected by law; 7 = are clearly defined and well protected by law)
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.75
7
Sweden...........................5.94 South Africa ....................5.92 Switzerland .....................5.85 Singapore ........................5.82 Australia ..........................5.75 Denmark .........................5.73 Norway............................5.71 Brazil ...............................5.64 India ................................5.60 Finland.............................5.58 Netherlands.....................5.54 Hong Kong SAR ..............5.38 France .............................5.35 Germany .........................5.30 Canada ............................5.25 Panama ...........................5.19 United Arab Emirates......5.18 Jordan .............................5.15 Bahrain ............................5.13 Belgium...........................5.09 Malaysia ..........................5.00 Austria.............................4.95 Thailand...........................4.95 Czech Republic ...............4.88 Poland .............................4.87 Japan...............................4.87 Indonesia.........................4.79 United Kingdom ..............4.78 United States ..................4.72 Nigeria.............................4.62 Hungary...........................4.57 Korea, Rep. .....................4.55 Israel ...............................4.53 Chile ................................4.52 Ireland .............................4.50 Mexico ............................4.46 Saudi Arabia ....................4.40 Bangladesh .....................4.37 Egypt...............................4.33 Spain ...............................4.29 Turkey..............................4.25 Pakistan...........................4.21 Italy .................................4.19 Philippines.......................4.18 Peru.................................4.18 Colombia .........................4.12 Slovak Republic...............4.11 Argentina.........................4.06 Vietnam ...........................4.03 China ...............................4.02 Kuwait .............................4.02 Venezuela........................3.48 Russian Federation .........3.30 Kazakhstan ......................3.19 Ukraine............................2.69
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.97
7
Switzerland .....................6.55 Denmark .........................6.48 Finland.............................6.46 Singapore ........................6.41 Sweden...........................6.41 Austria.............................6.37 Hong Kong SAR ..............6.28 Germany .........................6.27 Norway............................6.27 Canada ............................6.21 Australia ..........................6.17 Netherlands.....................6.11 Ireland .............................6.06 Japan...............................5.90 South Africa ....................5.87 France .............................5.80 Belgium...........................5.76 Jordan .............................5.75 United Kingdom ..............5.59 United States ..................5.53 Chile ................................5.51 Bahrain ............................5.50 United Arab Emirates......5.47 Saudi Arabia ....................5.31 China ...............................5.25 Malaysia ..........................5.21 Spain ...............................5.14 Kuwait .............................5.12 Korea, Rep. .....................4.97 Panama ...........................4.85 India ................................4.78 Czech Republic ...............4.72 Hungary...........................4.62 Slovak Republic...............4.55 Israel ...............................4.45 Vietnam ...........................4.43 Egypt...............................4.43 Italy .................................4.41 Brazil ...............................4.38 Thailand...........................4.28 Poland .............................4.25 Indonesia.........................4.11 Colombia .........................3.97 Mexico ............................3.95 Peru.................................3.95 Turkey..............................3.90 Nigeria.............................3.89 Philippines.......................3.81 Pakistan...........................3.78 Kazakhstan ......................3.62 Bangladesh .....................3.48 Russian Federation .........3.07 Argentina.........................2.92 Ukraine............................2.85 Venezuela........................2.08
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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1.17
1.18
Intellectual property protection
Diversion of public funds
Intellectual property protection in your country (1 = is weak and not enforced; 7 = is strong and enforced)
In your country, diversion of public funds to companies, individuals, or groups due to corruption (1 = is common; 7 = never occurs)
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.29
7
Singapore ........................6.21 Sweden...........................6.11 Finland.............................6.09 Switzerland .....................6.08 Austria.............................6.07 Denmark .........................5.99 Netherlands.....................5.84 France .............................5.81 Australia ..........................5.79 Germany .........................5.72 Norway............................5.66 United Arab Emirates......5.57 Ireland .............................5.57 Canada ............................5.47 United States ..................5.44 Japan...............................5.43 United Kingdom ..............5.33 Belgium...........................5.27 Hong Kong SAR ..............5.26 South Africa ....................5.22 Bahrain ............................5.08 Jordan .............................4.74 Saudi Arabia ....................4.64 Malaysia ..........................4.51 Spain ...............................4.31 Korea, Rep. .....................4.20 Israel ...............................4.03 China ...............................4.02 Czech Republic ...............4.02 Kuwait .............................4.01 Italy .................................3.91 Hungary...........................3.88 Panama ...........................3.84 Slovak Republic...............3.73 Egypt...............................3.67 India ................................3.65 Poland .............................3.58 Chile ................................3.57 Indonesia.........................3.54 Thailand...........................3.27 Kazakhstan ......................3.25 Mexico ............................3.19 Nigeria.............................3.08 Brazil ...............................3.04 Vietnam ...........................3.02 Colombia .........................3.00 Pakistan...........................2.96 Philippines.......................2.92 Russian Federation .........2.75 Turkey..............................2.68 Ukraine............................2.65 Peru.................................2.51 Argentina.........................2.49 Bangladesh .....................2.37 Venezuela........................2.00
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.19
7
Denmark .........................6.57 Sweden...........................6.50 Singapore ........................6.43 Finland.............................6.40 Switzerland .....................6.06 Norway............................5.98 Australia ..........................5.90 Netherlands.....................5.87 Hong Kong SAR ..............5.79 Germany .........................5.75 Ireland .............................5.71 United Kingdom ..............5.64 Austria.............................5.63 Canada ............................5.58 United Arab Emirates......5.54 Israel ...............................5.33 Belgium...........................5.14 Bahrain ............................5.08 United States ..................5.01 Japan...............................4.92 France .............................4.91 Saudi Arabia ....................4.84 Jordan .............................4.71 Spain ...............................4.57 Korea, Rep. .....................4.11 Malaysia ..........................4.10 Poland .............................3.99 Chile ................................3.90 China ...............................3.70 South Africa ....................3.67 India ................................3.60 Indonesia.........................3.57 Thailand...........................3.48 Kuwait .............................3.48 Peru.................................3.43 Panama ...........................3.38 Kazakhstan ......................3.23 Vietnam ...........................3.16 Italy .................................3.14 Egypt...............................3.08 Pakistan...........................3.08 Czech Republic ...............3.05 Turkey..............................3.04 Hungary...........................3.03 Slovak Republic...............3.03 Colombia .........................2.92 Mexico ............................2.90 Russian Federation .........2.74 Bangladesh .....................2.62 Ukraine............................2.53 Nigeria.............................2.33 Brazil ...............................2.30 Philippines.......................2.28 Argentina.........................2.16 Venezuela........................1.82
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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1.19
1.20
Public trust of politicians
Corruption perceptions index
Public trust in the financial honesty of politicians is (1 = very low; 7 = very high)
Composite index measuring the perceived levels of corruption in a given country as determined by expert assessments and opinion surveys. Higher scores indicate less extensive corruption | 2008
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 3.35
7
Singapore ........................6.45 Denmark .........................6.11 United Arab Emirates......5.88 Sweden...........................5.80 Norway............................5.72 Switzerland .....................5.63 Finland.............................5.50 Netherlands.....................5.31 Saudi Arabia ....................4.92 Australia ..........................4.92 Hong Kong SAR ..............4.85 Canada ............................4.25 Austria.............................4.21 Germany .........................4.06 China ...............................4.05 France .............................3.94 Jordan .............................3.91 Bahrain ............................3.91 Malaysia ..........................3.82 Vietnam ...........................3.63 Egypt...............................3.52 Israel ...............................3.51 Kuwait .............................3.51 Belgium...........................3.47 United Kingdom ..............3.45 United States ..................3.42 Chile ................................3.35 Ireland .............................3.30 Spain ...............................3.25 Indonesia.........................3.17 Kazakhstan ......................3.12 Japan...............................3.11 South Africa ....................2.84 Korea, Rep. .....................2.79 Thailand...........................2.66 India ................................2.38 Russian Federation .........2.32 Pakistan...........................2.27 Panama ...........................2.20 Colombia .........................2.19 Turkey..............................2.18 Mexico ............................2.14 Poland .............................2.08 Peru.................................2.07 Ukraine............................1.98 Italy .................................1.95 Hungary...........................1.90 Czech Republic ...............1.83 Bangladesh .....................1.79 Slovak Republic...............1.74 Venezuela........................1.60 Brazil ...............................1.58 Nigeria.............................1.57 Philippines.......................1.56 Argentina.........................1.45
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
RANK COUNTRY/ECONOMY
1 1 3 4 4 6 7 7 9 9 11 11 13 13 15 15 15 18 18 20 21 22 23 24 25 26 26 26 29 30 31 32 32 34 35 36 36 36 39 39 39 42 42 44 45 46 46 48 49 49 51 52 53 53 55
HARD DATA
Denmark............................9.30 Sweden .............................9.30 Singapore ..........................9.20 Finland ...............................9.00 Switzerland........................9.00 Netherlands .......................8.90 Australia.............................8.70 Canada...............................8.70 Austria ...............................8.10 Hong Kong SAR ................8.10 Germany............................7.90 Norway ..............................7.90 Ireland................................7.70 United Kingdom.................7.70 Belgium .............................7.30 Japan .................................7.30 United States.....................7.30 Chile ..................................6.90 France................................6.90 Spain..................................6.50 Israel..................................6.00 United Arab Emirates ........5.90 Korea, Rep.........................5.60 Bahrain ..............................5.40 Czech Republic..................5.20 Hungary .............................5.10 Jordan................................5.10 Malaysia ............................5.10 Slovak Republic .................5.00 South Africa.......................4.90 Italy....................................4.80 Poland................................4.60 Turkey ................................4.60 Kuwait ...............................4.30 Colombia ...........................3.80 China .................................3.60 Mexico...............................3.60 Peru ...................................3.60 Brazil..................................3.50 Saudi Arabia.......................3.50 Thailand .............................3.50 India...................................3.40 Panama..............................3.40 Argentina ...........................2.90 Egypt .................................2.80 Nigeria ...............................2.70 Vietnam .............................2.70 Indonesia ...........................2.60 Pakistan .............................2.50 Ukraine ..............................2.50 Philippines .........................2.30 Kazakhstan ........................2.20 Bangladesh........................2.10 Russian Federation............2.10 Venezuela ..........................1.90
SOURCE: Transparency International, Corruption Perceptions Index 2008
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1.21
1.22
Strength of legal rights index
Effectiveness of law-making bodies
This index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. The index ranges from 0 to 10, with higher scores indicating that collateral and bankruptcy laws are better designed to expand access to credit | 2008
How effective is your national parliament/congress as a law-making institution? (1 = very ineffective; 7 = very effectiveâ&#x20AC;&#x201D;among the best in the world)
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 1 1 4 4 4 4 4 4 4 11 11 11 11 11 11 11 18 18 18 18 18 18 18 18 18 18 18 29 29 29 29 29 29 29 36 36 36 39 39 39 39 39 39 39 39 39 39 49 49 49 49 49 49 49
HARD DATA
Hong Kong SAR ..............10.00 Malaysia ..........................10.00 Singapore ........................10.00 Australia.............................9.00 Denmark............................9.00 Israel..................................9.00 Slovak Republic .................9.00 South Africa.......................9.00 Ukraine ..............................9.00 United Kingdom.................9.00 Bangladesh........................8.00 India...................................8.00 Ireland................................8.00 Nigeria ...............................8.00 Poland................................8.00 Switzerland........................8.00 United States.....................8.00 Austria ...............................7.00 Belgium .............................7.00 Finland ...............................7.00 France................................7.00 Germany............................7.00 Hungary .............................7.00 Japan .................................7.00 Korea, Rep.........................7.00 Norway ..............................7.00 Peru ...................................7.00 Vietnam .............................7.00 Canada...............................6.00 China .................................6.00 Czech Republic..................6.00 Netherlands .......................6.00 Pakistan .............................6.00 Panama..............................6.00 Spain..................................6.00 Colombia ...........................5.00 Kazakhstan ........................5.00 Sweden .............................5.00 Argentina ...........................4.00 Bahrain ..............................4.00 Chile ..................................4.00 Jordan................................4.00 Kuwait ...............................4.00 Mexico...............................4.00 Saudi Arabia.......................4.00 Thailand .............................4.00 Turkey ................................4.00 United Arab Emirates ........4.00 Brazil..................................3.00 Egypt .................................3.00 Indonesia ...........................3.00 Italy....................................3.00 Philippines .........................3.00 Russian Federation............3.00 Venezuela ..........................3.00
SOURCE: The World Bank, Doing Business 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 3.81
7
Singapore ........................6.46 Denmark .........................5.98 Sweden...........................5.62 Australia ..........................5.58 Norway............................5.40 Finland.............................5.39 Canada ............................5.08 United Kingdom ..............4.97 Switzerland .....................4.93 Malaysia ..........................4.74 United Arab Emirates......4.74 France .............................4.72 Netherlands.....................4.67 India ................................4.64 Germany .........................4.60 Ireland .............................4.44 China ...............................4.39 South Africa ....................4.34 Austria.............................4.29 Japan...............................4.29 United States ..................4.17 Israel ...............................4.16 Vietnam ...........................4.10 Saudi Arabia ....................4.08 Hong Kong SAR ..............4.06 Turkey..............................3.88 Spain ...............................3.85 Kazakhstan ......................3.71 Bahrain ............................3.68 Jordan .............................3.66 Chile ................................3.64 Indonesia.........................3.54 Egypt...............................3.48 Nigeria.............................3.44 Belgium...........................3.38 Thailand...........................3.37 Kuwait .............................3.24 Russian Federation .........3.23 Czech Republic ...............3.20 Slovak Republic...............3.19 Colombia .........................3.00 Bangladesh .....................2.91 Pakistan...........................2.86 Poland .............................2.82 Mexico ............................2.64 Italy .................................2.62 Korea, Rep. .....................2.62 Hungary...........................2.54 Philippines.......................2.50 Panama ...........................2.45 Ukraine............................2.33 Brazil ...............................2.32 Peru.................................2.25 Argentina.........................2.04 Venezuela........................1.52
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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1.23
1.24
Judicial independence
Irregular payments in judicial decisions
Is the judiciary in your country independent from influences of members of government, citizens, or firms? (1 = noâ&#x20AC;&#x201D;heavily influenced; 7 = yesâ&#x20AC;&#x201D;entirely independent)
In your industry, how frequently would you estimate that firms make undocumented extra payments or bribes connected with getting favorable judicial decisions? (1 = common; 7 = never occurs)
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.56
7
Sweden...........................6.61 Denmark .........................6.50 Finland.............................6.48 Australia ..........................6.44 Germany .........................6.41 Switzerland .....................6.37 Netherlands.....................6.37 Ireland .............................6.34 Canada ............................6.21 Norway............................6.17 Austria.............................6.08 Hong Kong SAR ..............6.03 Israel ...............................6.03 United Kingdom ..............6.02 Singapore ........................5.79 Japan...............................5.49 Belgium...........................5.36 United States ..................5.34 United Arab Emirates......5.05 Saudi Arabia ....................5.00 Jordan .............................4.97 Bahrain ............................4.96 India ................................4.96 South Africa ....................4.96 France .............................4.76 Chile ................................4.71 Kuwait .............................4.64 Malaysia ..........................4.21 Thailand...........................4.20 Poland .............................4.14 Hungary...........................4.12 Korea, Rep. .....................4.08 Nigeria.............................4.08 Spain ...............................4.07 Czech Republic ...............4.01 China ...............................3.95 Egypt...............................3.88 Indonesia.........................3.83 Vietnam ...........................3.79 Turkey..............................3.71 Colombia .........................3.64 Brazil ...............................3.59 Slovak Republic...............3.51 Bangladesh .....................3.48 Mexico ............................3.24 Italy .................................3.14 Philippines.......................3.14 Pakistan...........................3.11 Kazakhstan ......................3.10 Panama ...........................2.96 Peru.................................2.86 Russian Federation .........2.69 Argentina.........................2.41 Ukraine............................2.25 Venezuela........................1.45
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.58
7
Singapore ........................6.57 Sweden...........................6.53 Finland.............................6.44 Denmark .........................6.44 Norway............................6.23 Ireland .............................6.14 Netherlands.....................6.05 Canada ............................6.04 Australia ..........................6.04 Switzerland .....................6.02 Hong Kong SAR ..............5.97 Chile ................................5.96 Japan...............................5.96 United Arab Emirates......5.87 Austria.............................5.76 Germany .........................5.63 Israel ...............................5.42 United Kingdom ..............5.40 Belgium...........................5.40 Bahrain ............................5.38 United States ..................5.25 Jordan .............................5.15 France .............................5.10 Spain ...............................5.06 Saudi Arabia ....................4.98 Poland .............................4.78 Korea, Rep. .....................4.77 Czech Republic ...............4.45 South Africa ....................4.42 Slovak Republic...............4.39 Peru.................................4.36 China ...............................4.29 Hungary...........................4.26 Malaysia ..........................4.22 Kuwait .............................4.06 Panama ...........................3.96 Italy .................................3.86 Colombia .........................3.73 Brazil ...............................3.69 Mexico ............................3.56 Thailand...........................3.51 Kazakhstan ......................3.45 Turkey..............................3.43 Egypt...............................3.39 India ................................3.38 Ukraine............................3.16 Indonesia.........................3.13 Pakistan...........................3.05 Nigeria.............................2.82 Argentina.........................2.80 Vietnam ...........................2.75 Russian Federation .........2.68 Philippines.......................2.36 Bangladesh .....................2.24 Venezuela........................2.09
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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1.25
1.26
Time to enforce a contract
Number of procedures to enforce a contract
Time in days to resolve a dispute related to a contract | 2008
Number of procedures from the moment the plaintiff files a lawsuit in court until the moment of payment | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 3 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 31 33 34 35 35 37 38 38 40 41 42 42 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Singapore ......................150.00 Hong Kong SAR ............211.00 Kazakhstan ....................230.00 Korea, Rep.....................230.00 Finland ...........................235.00 Russian Federation........281.00 Vietnam .........................295.00 United States.................300.00 Norway ..........................310.00 Japan .............................316.00 France............................331.00 Hungary .........................335.00 Ukraine ..........................354.00 Denmark........................380.00 Germany........................394.00 Australia.........................395.00 Austria ...........................397.00 United Kingdom.............404.00 China .............................406.00 Mexico...........................415.00 Switzerland....................417.00 Turkey ............................420.00 Nigeria ...........................457.00 Peru ...............................468.00 Thailand .........................479.00 Chile ..............................480.00 Belgium .........................505.00 Sweden .........................508.00 Venezuela ......................510.00 Netherlands ...................514.00 Ireland............................515.00 Spain..............................515.00 Slovak Republic .............565.00 Kuwait ...........................566.00 Canada...........................570.00 Indonesia .......................570.00 Argentina .......................590.00 Malaysia ........................600.00 South Africa...................600.00 United Arab Emirates ....607.00 Brazil..............................616.00 Bahrain ..........................635.00 Saudi Arabia...................635.00 Panama..........................686.00 Jordan............................689.00 Czech Republic..............820.00 Poland............................830.00 Philippines .....................842.00 Israel..............................890.00 Pakistan .........................976.00 Egypt ..........................1,010.00 Italy.............................1,210.00 Colombia ....................1,346.00 India............................1,420.00 Bangladesh.................1,442.00
SOURCE: The World Bank, Doing Business 2009
1 2 3 4 4 4 7 8 9 10 10 10 10 10 10 10 10 10 19 20 20 20 23 23 25 25 25 25 29 29 29 29 33 33 33 36 36 38 38 38 41 41 41 41 45 45 45 48 49 50 51 52 53 54 54
HARD DATA
Ireland..............................20.00 Singapore ........................21.00 Hong Kong SAR ..............24.00 Austria .............................25.00 Belgium ...........................25.00 Netherlands .....................25.00 Czech Republic................27.00 Australia...........................28.00 Venezuela ........................29.00 France..............................30.00 Germany..........................30.00 Japan ...............................30.00 Malaysia ..........................30.00 Slovak Republic ...............30.00 South Africa.....................30.00 Sweden ...........................30.00 Ukraine ............................30.00 United Kingdom...............30.00 Panama............................31.00 Finland .............................32.00 Switzerland......................32.00 United States...................32.00 Hungary ...........................33.00 Norway ............................33.00 China ...............................34.00 Colombia .........................34.00 Denmark..........................34.00 Vietnam ...........................34.00 Israel................................35.00 Korea, Rep.......................35.00 Thailand ...........................35.00 Turkey ..............................35.00 Argentina .........................36.00 Canada.............................36.00 Chile ................................36.00 Philippines .......................37.00 Russian Federation..........37.00 Kazakhstan ......................38.00 Mexico.............................38.00 Poland..............................38.00 Indonesia .........................39.00 Jordan..............................39.00 Nigeria .............................39.00 Spain................................39.00 Bangladesh......................41.00 Italy..................................41.00 Peru .................................41.00 Egypt ...............................42.00 Saudi Arabia.....................44.00 Brazil................................45.00 India.................................46.00 Pakistan ...........................47.00 Bahrain ............................48.00 Kuwait .............................50.00 United Arab Emirates ......50.00
SOURCE: The World Bank, Doing Business 2009
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1.27
1.28
Strength of investor protection
Cost of enforcing contracts
This index assesses the strength of investor protection on a 0â&#x20AC;&#x201C;10 (best) scale | 2008
Cost of enforcing contracts as a percentage of claim | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 4 4 4 8 8 10 11 11 13 13 13 16 16 16 16 16 21 21 21 21 25 25 25 25 25 25 25 25 25 34 34 34 34 38 38 38 38 38 43 43 43 43 47 47 47 50 50 52 53 54 54
HARD DATA
Singapore ..........................9.30 Hong Kong SAR ................9.00 Malaysia ............................8.70 Canada...............................8.30 Ireland................................8.30 Israel..................................8.30 United States.....................8.30 South Africa.......................8.00 United Kingdom.................8.00 Thailand .............................7.70 Belgium .............................7.00 Japan .................................7.00 Bangladesh........................6.70 Norway ..............................6.70 Peru ...................................6.70 Colombia ...........................6.30 Denmark............................6.30 Kuwait ...............................6.30 Pakistan .............................6.30 Saudi Arabia.......................6.30 Chile ..................................6.00 India...................................6.00 Mexico...............................6.00 Poland................................6.00 Australia.............................5.70 Bahrain ..............................5.70 Finland ...............................5.70 Indonesia ...........................5.70 Italy....................................5.70 Kazakhstan ........................5.70 Nigeria ...............................5.70 Sweden .............................5.70 Turkey ................................5.70 Brazil..................................5.30 Egypt .................................5.30 France................................5.30 Korea, Rep.........................5.30 China .................................5.00 Czech Republic..................5.00 Germany............................5.00 Russian Federation............5.00 Spain..................................5.00 Argentina ...........................4.70 Netherlands .......................4.70 Panama..............................4.70 Slovak Republic .................4.70 Hungary .............................4.30 Jordan................................4.30 United Arab Emirates ........4.30 Austria ...............................4.00 Philippines .........................4.00 Ukraine ..............................3.70 Switzerland........................3.00 Venezuela ..........................2.70 Vietnam .............................2.70
SOURCE: The World Bank, Doing Business 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 14 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 34 36 37 37 39 40 41 42 43 44 44 46 47 48 49 50 51 52 53 54 55
HARD DATA
United States.....................9.40 Norway ..............................9.90 Korea, Rep.......................10.30 Finland .............................10.40 China ...............................11.10 Poland..............................12.00 Hungary ...........................13.00 Kuwait .............................13.30 Russian Federation..........13.40 Thailand ...........................14.30 Germany..........................14.40 Hong Kong SAR ..............14.50 Bahrain ............................14.70 Argentina .........................16.50 Brazil................................16.50 Belgium ...........................16.60 Spain................................17.20 France..............................17.40 Austria .............................18.00 Turkey ..............................18.80 Australia...........................20.70 Kazakhstan ......................22.00 Canada.............................22.30 Japan ...............................22.70 Denmark..........................23.30 United Kingdom...............23.40 Pakistan ...........................23.80 Switzerland......................24.00 Netherlands .....................24.40 Israel................................25.30 Slovak Republic ...............25.70 Singapore ........................25.80 Philippines .......................26.00 Egypt ...............................26.20 United Arab Emirates ......26.20 Ireland..............................26.90 Malaysia ..........................27.50 Saudi Arabia.....................27.50 Chile ................................28.60 Italy..................................29.90 Vietnam ...........................31.00 Jordan..............................31.20 Sweden ...........................31.30 Mexico.............................32.00 Nigeria .............................32.00 Czech Republic................33.00 South Africa.....................33.20 Peru .................................35.70 India.................................39.60 Ukraine ............................41.50 Venezuela ........................43.70 Panama............................50.00 Colombia .........................52.60 Bangladesh......................63.30 Indonesia .......................122.70
SOURCE: The World Bank, Doing Business 2009
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Data Tables
Section II Business environment 295
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2.01
2.02
Quality of management schools
Quality of math and science education
Management or business schools in your country are (1 = limited or of poor quality; 7 = among the best in the world)
Math and science education in your countryâ&#x20AC;&#x2122;s schools (1 = lag far behind most other countries; 7 = are among the best in the world)
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.64
7
Switzerland .....................6.13 Canada ............................5.97 France .............................5.92 United States ..................5.85 Singapore ........................5.84 Spain ...............................5.83 Belgium...........................5.79 Denmark .........................5.64 Netherlands.....................5.51 Finland.............................5.44 Sweden...........................5.40 India ................................5.38 United Kingdom ..............5.36 Chile ................................5.35 Australia ..........................5.30 Ireland .............................5.27 Norway............................5.19 United Arab Emirates......5.13 Argentina.........................5.11 Austria.............................5.09 Germany .........................4.96 Hong Kong SAR ..............4.90 South Africa ....................4.83 Malaysia ..........................4.78 Czech Republic ...............4.71 Philippines.......................4.66 Bahrain ............................4.57 Korea, Rep. .....................4.48 Poland .............................4.47 Italy .................................4.45 Mexico ............................4.39 Indonesia.........................4.32 Jordan .............................4.31 Peru.................................4.30 Venezuela........................4.28 Thailand...........................4.22 Colombia .........................4.20 Nigeria.............................4.13 Israel ...............................4.10 Brazil ...............................4.09 Hungary...........................4.06 China ...............................4.00 Pakistan...........................3.90 Japan...............................3.89 Saudi Arabia ....................3.87 Turkey..............................3.84 Russian Federation .........3.69 Ukraine............................3.66 Kazakhstan ......................3.63 Kuwait .............................3.63 Slovak Republic...............3.61 Bangladesh .....................3.61 Panama ...........................3.59 Vietnam ...........................3.39 Egypt...............................3.33
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.28
7
Singapore ........................6.43 Finland.............................6.36 Belgium...........................6.08 Switzerland .....................5.71 France .............................5.51 Czech Republic ...............5.41 Hong Kong SAR ..............5.39 Canada ............................5.31 Denmark .........................5.23 Netherlands.....................5.21 Korea, Rep. .....................5.19 United Arab Emirates......5.15 India ................................5.03 Poland .............................4.95 Ireland .............................4.93 Japan...............................4.93 Hungary...........................4.93 Australia ..........................4.85 Malaysia ..........................4.81 China ...............................4.81 Sweden...........................4.81 Jordan .............................4.74 Austria.............................4.73 Ukraine............................4.68 Russian Federation .........4.68 Germany .........................4.53 United States ..................4.47 Indonesia.........................4.46 Slovak Republic...............4.46 United Kingdom ..............4.45 Vietnam ...........................4.44 Bahrain ............................4.35 Norway............................4.24 Thailand...........................4.14 Kazakhstan ......................3.86 Turkey..............................3.81 Saudi Arabia ....................3.73 Italy .................................3.66 Colombia .........................3.56 Kuwait .............................3.49 Pakistan...........................3.40 Philippines.......................3.38 Nigeria.............................3.36 Argentina.........................3.35 Spain ...............................3.34 Israel ...............................3.19 Panama ...........................2.98 Venezuela........................2.95 Chile ................................2.91 Bangladesh .....................2.86 Brazil ...............................2.71 Egypt...............................2.70 Mexico ............................2.58 Peru.................................2.23 South Africa ....................2.07
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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2.03
2.04
Extent of staff training
Local availability of specialized research and training services
The general approach of companies in your country to human resources is (1 = to invest little in training and employee development; 7 = to invest heavily to attract, train, and retain employees)
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.38
7
Sweden...........................5.68 Singapore ........................5.63 Switzerland .....................5.63 Denmark .........................5.63 Japan...............................5.45 Norway............................5.41 United States ..................5.31 Finland.............................5.27 Netherlands.....................5.23 Germany .........................5.18 Canada ............................5.03 Belgium...........................4.94 Ireland .............................4.89 Malaysia ..........................4.89 France .............................4.86 Australia ..........................4.84 South Africa ....................4.81 Austria.............................4.80 Hong Kong SAR ..............4.77 United Kingdom ..............4.73 Czech Republic ...............4.67 Korea, Rep. .....................4.66 United Arab Emirates......4.65 Indonesia.........................4.52 India ................................4.51 Israel ...............................4.49 Bahrain ............................4.47 Philippines.......................4.38 Chile ................................4.38 Saudi Arabia ....................4.29 Vietnam ...........................4.23 China ...............................4.22 Slovak Republic...............4.17 Brazil ...............................4.16 Panama ...........................4.10 Thailand...........................4.06 Poland .............................4.06 Jordan .............................3.99 Kuwait .............................3.87 Spain ...............................3.86 Mexico ............................3.77 Peru.................................3.70 Argentina.........................3.70 Kazakhstan ......................3.67 Turkey..............................3.66 Nigeria.............................3.63 Hungary...........................3.62 Russian Federation .........3.57 Venezuela........................3.48 Colombia .........................3.42 Egypt...............................3.41 Ukraine............................3.37 Pakistan...........................3.30 Italy .................................3.06 Bangladesh .....................2.64
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
In your country, specialized research and training services are (1 = not available; 7 = available from world-class local institutions)
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.69
7
Switzerland .....................6.30 Germany .........................6.03 United States ..................5.98 Netherlands.....................5.97 Finland.............................5.94 Denmark .........................5.89 Sweden...........................5.84 France .............................5.75 United Kingdom ..............5.64 Belgium...........................5.63 Canada ............................5.62 Austria.............................5.55 Japan...............................5.51 Singapore ........................5.50 Norway............................5.40 Czech Republic ...............5.29 Australia ..........................5.28 Hong Kong SAR ..............5.05 United Arab Emirates......5.01 Ireland .............................4.87 Malaysia ..........................4.85 Spain ...............................4.82 Israel ...............................4.79 Brazil ...............................4.79 Poland .............................4.78 India ................................4.68 Korea, Rep. .....................4.61 South Africa ....................4.59 Chile ................................4.58 Saudi Arabia ....................4.58 Italy .................................4.54 Jordan .............................4.45 China ...............................4.35 Indonesia.........................4.35 Hungary...........................4.33 Slovak Republic...............4.31 Mexico ............................4.21 Argentina.........................4.16 Colombia .........................4.14 Thailand...........................4.08 Kazakhstan ......................3.97 Russian Federation .........3.96 Nigeria.............................3.92 Ukraine............................3.91 Turkey..............................3.88 Panama ...........................3.87 Egypt...............................3.86 Kuwait .............................3.84 Philippines.......................3.79 Peru.................................3.78 Vietnam ...........................3.62 Pakistan...........................3.42 Venezuela........................3.38 Bahrain ............................3.38 Bangladesh .....................3.05
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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2.05
2.06
Brain drain and ease of hiring foreign labor
Tertiary enrollment
This variable is the average of the results to two questions in the Survey: Your countryâ&#x20AC;&#x2122;s talented people (1 = normally leave to pursue opportunities in other countries; 7 = almost always remain in the country); and Labor regulation in your country (1 = prevents your company from employing foreign labor; 7 = does not prevent your company from employing foreign labor)
Gross tertiary enrollment rate | 2007 or most recent year available
RANK COUNTRY/ECONOMY RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.25
7
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
United Arab Emirates......6.01 Switzerland .....................5.56 Singapore ........................5.49 Ireland .............................5.25 United States ..................5.22 Hong Kong SAR ..............5.19 Chile ................................5.02 Norway............................5.01 Finland.............................5.00 Netherlands.....................4.92 United Kingdom ..............4.92 Sweden...........................4.89 Denmark .........................4.85 Bahrain ............................4.83 Saudi Arabia ....................4.74 Kuwait .............................4.73 Canada ............................4.64 Indonesia.........................4.64 China ...............................4.62 Belgium...........................4.51 Spain ...............................4.42 Czech Republic ...............4.39 Malaysia ..........................4.37 Australia ..........................4.28 Panama ...........................4.26 Germany .........................4.24 Peru.................................4.20 Brazil ...............................4.19 Japan...............................4.19 Thailand...........................4.15 India ................................4.12 Nigeria.............................4.10 Korea, Rep. .....................4.09 France .............................4.06 Argentina.........................3.98 Hungary...........................3.94 Austria.............................3.92 Vietnam ...........................3.88 Italy .................................3.86 Slovak Republic...............3.77 Turkey..............................3.71 Mexico ............................3.70 Colombia .........................3.67 Pakistan...........................3.64 Israel ...............................3.62 Kazakhstan ......................3.56 Poland .............................3.51 Jordan .............................3.45 Egypt...............................3.44 Ukraine............................3.42 Russian Federation .........3.35 Philippines.......................3.19 South Africa ....................3.13 Bangladesh .....................2.97 Venezuela........................2.72
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
HARD DATA
Finland .............................93.22 Korea, Rep.......................92.60 United States...................81.77 Denmark..........................79.94 Sweden ...........................78.99 Norway ............................77.51 Ukraine ............................76.38 Australia...........................72.70 Russian Federation..........72.28 Hungary ...........................68.60 Spain................................67.36 Italy..................................66.99 Poland..............................65.58 Argentina .........................63.77 Belgium ...........................62.84 Canada2 ...........................62.36 Netherlands .....................59.81 United Kingdom...............59.34 Ireland..............................58.77 Singapore5 .......................58.60 Israel................................57.57 Japan ...............................57.31 France..............................56.16 Venezuela4 .......................51.96 Austria .............................49.89 Czech Republic................49.85 Thailand5 ..........................49.51 Kazakhstan5 .....................47.01 Chile ................................46.57 Germany4 .........................46.34 Switzerland......................45.80 Panama4 ..........................45.49 Slovak Republic ...............45.32 Jordan..............................39.05 Peru4 ................................35.06 Egypt3 ..............................34.75 Turkey ..............................34.62 Hong Kong SAR ..............32.97 Bahrain4 ...........................32.05 Colombia .........................31.80 Saudi Arabia4 ...................29.22 Malaysia4 .........................28.58 Philippines4 ......................28.47 Mexico.............................26.08 Brazil................................25.48 United Arab Emirates5 .....22.90 China ...............................21.58 Kuwait4 ............................17.56 Indonesia .........................16.98 South Africa4....................15.41 India4 ................................11.85 Nigeria3 ............................10.15 Vietnam1 ............................9.47 Bangladesh........................6.78 Pakistan .............................5.12
SOURCE: UNESCO Institute for Statistics (June 2009); The World Bank, World Development Indicators 2009; national sources 1
2001
2
2004
3
2005
4
2006
5
2008
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2.07
2.08
Irregular payments in tax collection
Distortive effect on competition of taxes and subsidies
In your industry, how frequently would you estimate that firms make undocumented extra payments or bribes connected with annual tax payments? (1 = common; 7 = never occurs)
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.59
7
Singapore ........................6.55 Sweden...........................6.53 Denmark .........................6.46 Finland.............................6.45 Norway............................6.23 Ireland .............................6.17 Netherlands.....................6.05 Australia ..........................6.05 Switzerland .....................6.03 Canada ............................5.97 Hong Kong SAR ..............5.97 Chile ................................5.97 Japan...............................5.96 United Arab Emirates......5.89 Austria.............................5.75 Bahrain ............................5.70 Israel ...............................5.69 Germany .........................5.64 United Kingdom ..............5.44 Belgium...........................5.41 United States ..................5.27 Jordan .............................5.16 France .............................5.09 Saudi Arabia ....................5.04 Spain ...............................5.03 Korea, Rep. .....................4.77 Poland .............................4.77 South Africa ....................4.42 Peru.................................4.42 Slovak Republic...............4.38 Czech Republic ...............4.37 Hungary...........................4.27 China ...............................4.27 Malaysia ..........................4.22 Kuwait .............................3.95 Panama ...........................3.94 Italy .................................3.88 Colombia .........................3.74 Brazil ...............................3.71 Mexico ............................3.58 Thailand...........................3.52 Kazakhstan ......................3.45 Turkey..............................3.43 Egypt...............................3.41 India ................................3.39 Ukraine............................3.12 Indonesia.........................3.10 Pakistan...........................3.07 Argentina.........................2.84 Nigeria.............................2.80 Vietnam ...........................2.74 Russian Federation .........2.68 Philippines.......................2.36 Bangladesh .....................2.21 Venezuela........................2.09
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
In your country, government subsidies and tax breaks seriously distort competition (1 = strongly agree; 7 = strongly disagree)
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.32
7
Hong Kong SAR ..............6.06 Singapore ........................5.97 United Arab Emirates......5.80 Bahrain ............................5.66 Chile ................................5.47 South Africa ....................5.13 Saudi Arabia ....................5.05 Norway............................5.05 Ireland .............................4.97 Sweden...........................4.93 Denmark .........................4.87 Netherlands.....................4.84 Australia ..........................4.82 Switzerland .....................4.78 Finland.............................4.73 Peru.................................4.73 Austria.............................4.72 China ...............................4.66 Israel ...............................4.58 Nigeria.............................4.52 Jordan .............................4.47 France .............................4.47 Kuwait .............................4.35 Indonesia.........................4.34 Canada ............................4.30 Belgium...........................4.26 Malaysia ..........................4.20 Thailand...........................4.20 United Kingdom ..............4.17 Egypt...............................4.13 Bangladesh .....................4.13 Japan...............................4.09 Panama ...........................4.09 Korea, Rep. .....................4.08 Vietnam ...........................4.08 Czech Republic ...............4.08 Turkey..............................4.07 India ................................4.00 United States ..................3.99 Spain ...............................3.98 Pakistan...........................3.98 Poland .............................3.91 Philippines.......................3.85 Mexico ............................3.84 Brazil ...............................3.81 Colombia .........................3.81 Germany .........................3.80 Russian Federation .........3.72 Slovak Republic...............3.69 Italy .................................3.67 Kazakhstan ......................3.60 Hungary...........................3.32 Ukraine............................2.97 Argentina.........................2.33 Venezuela........................2.26
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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2.10
Marginal tax variation
Time to pay taxes
Variation between the top tax rate on corporate income and the taxes and mandatory contributions paid by a prototypical business as a percentage of commercial profits | 2009
Time to prepare, file, and pay or withhold the corporate income tax, the value-added tax, and social security contributions (hours per year) | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 9 11 12 13 13 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 33 35 36 37 37 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 n/a n/a
HARD DATA
Germany ..........................–6.90 Canada.............................–6.00 Japan ...............................–4.00 Kuwait..............................–3.70 Hong Kong SAR...............–2.10 Ireland..............................–1.70 Chile.................................–1.30 Italy ..................................–0.50 Bahrain ..............................0.00 United Arab Emirates ........0.00 Saudi Arabia.......................0.40 Israel..................................0.80 Denmark............................1.50 Thailand .............................1.50 Australia.............................2.80 Peru ...................................2.90 Turkey ................................3.20 Indonesia ...........................3.40 South Africa.......................3.50 Norway ..............................3.60 Netherlands .......................3.70 Mexico...............................4.80 Poland................................6.00 Egypt .................................6.40 Hungary .............................6.90 United Kingdom.................7.00 Vietnam .............................7.40 Spain..................................7.80 Nigeria ...............................8.20 Korea, Rep.........................8.90 Finland ...............................9.00 Malaysia ............................9.20 Austria ...............................9.90 Jordan................................9.90 Singapore ........................10.10 India.................................11.10 Sweden ...........................11.50 United States...................11.50 Slovak Republic ...............12.20 Brazil................................12.70 China ...............................13.00 Panama............................13.10 Ukraine ............................13.50 Kazakhstan ......................14.40 Czech Republic................15.00 Colombia .........................15.10 Switzerland......................16.10 Bangladesh......................17.70 Pakistan ...........................21.10 Venezuela ........................23.70 France..............................26.10 Belgium ...........................28.10 Argentina .........................32.20 Philippines ...........................n/a Russian Federation ..............n/a
SOURCE: Top tax rate data from Heritage Foundation, 2009 Index of Economic Freedom; profit tax data from The World Bank, Doing Business 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 33 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
United Arab Emirates ......12.00 Bahrain ............................36.00 Switzerland......................63.00 Ireland..............................76.00 Saudi Arabia.....................79.00 Hong Kong SAR ..............80.00 Singapore ........................84.00 Norway ............................87.00 Jordan............................101.00 United Kingdom.............105.00 Australia.........................107.00 Kuwait ...........................118.00 Canada...........................119.00 Sweden .........................122.00 France............................132.00 Denmark........................135.00 Malaysia ........................145.00 Belgium .........................156.00 Austria ...........................170.00 Netherlands ...................180.00 United States.................187.00 Philippines .....................195.00 Germany........................196.00 South Africa...................200.00 Turkey ............................223.00 Israel..............................230.00 Spain..............................234.00 Korea, Rep.....................250.00 Colombia .......................256.00 Thailand .........................264.00 Indonesia .......................266.00 Finland ...........................269.00 India...............................271.00 Kazakhstan ....................271.00 Bangladesh....................302.00 Chile ..............................316.00 Slovak Republic .............325.00 Hungary .........................330.00 Italy................................334.00 Japan .............................355.00 Poland............................418.00 Peru ...............................424.00 Russian Federation........448.00 Argentina .......................453.00 Panama..........................482.00 China .............................504.00 Mexico...........................549.00 Pakistan .........................560.00 Egypt .............................711.00 Ukraine ..........................848.00 Venezuela ......................864.00 Czech Republic..............930.00 Nigeria ...........................938.00 Vietnam ......................1,050.00 Brazil...........................2,600.00
SOURCE: The World Bank, Doing Business 2009
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2.11
2.12
Quality of overall infrastructure
Quality of telephone infrastructure
General infrastructure in your country is (1 = underdeveloped; 7 = extensive and efficient by international standards)
New telephone lines for your business are (1 = scarce and difficult to obtain; 7 = widely available and highly reliable)
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.67
7
Switzerland .....................6.77 Singapore ........................6.70 Hong Kong SAR ..............6.69 Austria.............................6.60 France .............................6.55 Germany .........................6.54 Finland.............................6.47 Denmark .........................6.25 Sweden...........................6.19 United Arab Emirates......6.08 Canada ............................5.95 United States ..................5.89 Belgium...........................5.83 Japan...............................5.81 Netherlands.....................5.81 Korea, Rep. .....................5.77 Chile ................................5.61 Bahrain ............................5.43 Malaysia ..........................5.39 Spain ...............................5.25 Jordan .............................5.22 Norway............................5.19 Saudi Arabia ....................5.17 United Kingdom ..............5.16 Australia ..........................4.99 Thailand...........................4.77 South Africa ....................4.74 Kuwait .............................4.71 Israel ...............................4.50 Czech Republic ...............4.48 Egypt...............................4.39 Hungary...........................4.33 Turkey..............................4.16 Slovak Republic...............4.12 Ireland .............................4.06 China ...............................3.99 Panama ...........................3.97 Kazakhstan ......................3.84 Mexico ............................3.77 Italy .................................3.77 Ukraine............................3.49 Brazil ...............................3.43 Colombia .........................3.42 Russian Federation .........3.34 Pakistan...........................3.21 India ................................3.21 Argentina.........................3.18 Indonesia.........................3.15 Philippines.......................3.12 Peru.................................3.00 Venezuela........................2.98 Vietnam ...........................2.83 Poland .............................2.64 Bangladesh .....................2.52 Nigeria.............................2.43
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 6.11
7
Finland.............................6.90 Norway............................6.89 Austria.............................6.89 Switzerland .....................6.88 Hong Kong SAR ..............6.86 Sweden...........................6.83 Singapore ........................6.80 Japan...............................6.80 Denmark .........................6.78 Israel ...............................6.78 Canada ............................6.76 France .............................6.72 Chile ................................6.72 Netherlands.....................6.71 United States ..................6.70 Germany .........................6.58 Jordan .............................6.56 Egypt...............................6.55 United Arab Emirates......6.53 Slovak Republic...............6.53 Belgium...........................6.51 Brazil ...............................6.46 United Kingdom ..............6.45 Hungary...........................6.42 Czech Republic ...............6.41 India ................................6.34 Bahrain ............................6.27 Thailand...........................6.24 Korea, Rep. .....................6.14 Saudi Arabia ....................6.11 Peru.................................6.09 Ireland .............................6.07 Panama ...........................6.07 Colombia .........................5.98 Turkey..............................5.98 Malaysia ..........................5.93 Mexico ............................5.93 Spain ...............................5.93 Australia ..........................5.86 China ...............................5.82 Vietnam ...........................5.80 Nigeria.............................5.64 Philippines.......................5.59 Poland .............................5.55 Argentina.........................5.49 Pakistan...........................5.42 Ukraine............................5.38 Kuwait .............................5.36 Italy .................................5.29 Russian Federation .........5.14 Kazakhstan ......................5.03 Indonesia.........................4.78 South Africa ....................4.58 Venezuela........................4.56 Bangladesh .....................4.40
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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2.14
Internet users
Broadband Internet subscribers
Internet users per 100 inhabitants | 2007
Total broadband Internet subscribers per 100 inhabitants | 2007 or most recent year available
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Norway ............................85.00 Netherlands .....................84.00 Denmark..........................81.00 Sweden ...........................80.00 Finland .............................79.00 Switzerland......................77.00 Korea, Rep.......................76.30 Canada.............................73.00 United States...................72.50 Germany..........................72.00 United Kingdom...............72.00 Australia...........................69.00 Japan ...............................68.85 Singapore ........................68.00 Austria .............................67.00 Belgium ...........................67.00 Ireland..............................57.00 Slovak Republic ...............56.00 Malaysia ..........................55.67 Hong Kong SAR ..............54.97 Italy..................................54.35 Spain................................52.00 Hungary ...........................52.00 United Arab Emirates ......51.59 France..............................51.21 Czech Republic................49.00 Poland..............................44.00 Brazil................................35.20 Bahrain ............................33.22 Kuwait .............................31.57 Chile ................................30.95 Israel................................28.87 Peru .................................27.37 Colombia .........................26.22 Argentina .........................25.92 Saudi Arabia.....................25.79 Mexico.............................22.41 Panama............................22.29 Ukraine ............................21.64 Russian Federation..........21.05 Thailand ...........................21.00 Venezuela ........................20.68 Vietnam ...........................20.45 Jordan..............................19.02 Turkey ..............................16.24 China ...............................16.00 Egypt ...............................13.95 Kazakhstan ......................12.32 Pakistan ...........................10.68 South Africa.......................8.16 India...................................6.93 Nigeria ...............................6.75 Philippines .........................6.03 Indonesia ...........................5.61 Bangladesh........................0.32
SOURCE: International Telecommunication Union, World Telecommunication Indicators 2008; national sources
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Denmark..........................35.99 Sweden ...........................35.97 Netherlands .....................33.54 Switzerland......................31.79 Norway ............................30.64 Finland .............................30.64 Korea, Rep.......................30.50 Canada.............................27.60 Hong Kong SAR ..............26.35 Belgium ...........................25.97 United Kingdom...............25.68 France..............................25.22 United States...................23.94 Germany..........................23.73 Australia...........................23.29 Japan ...............................22.10 Israel................................22.06 Singapore ........................20.18 Austria .............................19.40 Ireland..............................18.74 Italy..................................18.45 Spain................................18.23 Hungary ...........................14.25 Czech Republic................12.90 Bahrain ..............................9.07 Poland................................9.00 Slovak Republic .................8.76 United Arab Emirates ........8.67 Chile ..................................7.86 Argentina ...........................6.58 Turkey ................................6.08 China .................................5.00 Panama..............................4.30 Mexico...............................4.27 Malaysia ............................3.80 Brazil..................................3.54 Venezuela ..........................3.10 Russian Federation............2.81 Colombia ...........................2.62 Saudi Arabia.......................2.52 Peru ...................................2.04 Kazakhstan ........................1.75 Ukraine ..............................1.73 Vietnam .............................1.48 Jordan................................1.45 Thailand .............................1.43 Kuwait1 ..............................0.93 South Africa.......................0.78 Egypt .................................0.63 Philippines .........................0.56 India...................................0.27 Indonesia ...........................0.11 Pakistan .............................0.03 Nigeria1 ..............................0.00 Bangladesh1 .......................0.00
SOURCE: International Telecommunication Union, World Telecommunication Indicators 2008; national sources 1
2005
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2.15
2.16
Telephone lines
Mobile telephone subscribers
Main telephone lines per 100 inhabitants | 2007 or most recent year available
Mobile cellular telephone subscribers per 100 inhabitants | 2007
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 16 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Switzerland......................65.91 Germany..........................65.07 Sweden ...........................60.38 Hong Kong SAR ..............57.24 France..............................56.45 Canada.............................55.48 United Kingdom...............55.43 United States...................53.35 Denmark..........................51.91 Ireland..............................49.13 Australia...........................47.05 Korea, Rep.......................46.44 Spain................................45.91 Netherlands .....................44.67 Belgium ...........................44.63 Israel1 ...............................43.88 Italy1 .................................43.88 Norway ............................42.36 Singapore ........................41.97 Austria .............................40.75 Japan ...............................40.04 Finland .............................32.97 Vietnam ...........................32.65 Hungary ...........................32.41 United Arab Emirates ......31.63 Russian Federation..........31.02 Ukraine ............................27.83 China ...............................27.52 Poland..............................27.14 Bahrain1 ...........................26.30 Turkey ..............................24.31 Argentina .........................24.03 Czech Republic................23.59 Slovak Republic ...............21.35 Kazakhstan ......................20.99 Chile ................................20.74 Brazil................................20.54 Kuwait1 ............................18.70 Mexico.............................18.54 Venezuela ........................18.38 Colombia .........................17.19 Malaysia ..........................16.37 Saudi Arabia.....................16.16 Egypt ...............................14.87 Panama............................14.81 Thailand ...........................11.00 Jordan................................9.88 Peru ...................................9.58 South Africa.......................9.56 Indonesia ...........................7.70 Philippines .........................4.48 India...................................3.37 Pakistan .............................2.93 Nigeria ...............................1.07 Bangladesh........................0.75
SOURCE: International Telecommunication Union, World Telecommunication Indicators 2008; national sources 1
2006
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
United Arab Emirates ....176.50 Italy................................153.12 Hong Kong SAR ............149.20 Bahrain ..........................148.28 Singapore ......................133.54 Israel..............................128.50 Czech Republic..............124.88 Thailand .........................123.77 Ukraine ..........................119.55 Austria ...........................118.55 United Kingdom.............118.47 Germany........................117.62 Netherlands ...................117.46 Ireland............................115.86 Finland ...........................115.22 Saudi Arabia...................114.74 Russian Federation........114.60 Denmark........................114.48 Sweden .........................113.73 Slovak Republic .............112.58 Norway ..........................110.50 Hungary .........................109.97 Switzerland....................109.69 Spain..............................109.36 Poland............................108.68 Belgium .........................102.68 Australia.........................102.49 Argentina .......................102.20 Kuwait .............................97.28 Korea, Rep.......................90.20 Panama............................90.05 France..............................89.80 Malaysia ..........................87.86 South Africa.....................87.08 Venezuela ........................86.13 Japan ...............................83.88 Chile ................................83.66 United States...................83.51 Turkey ..............................82.77 Jordan..............................80.54 Kazakhstan ......................79.90 Colombia .........................73.54 Brazil................................63.08 Mexico.............................62.48 Canada.............................61.68 Philippines .......................58.88 Peru .................................55.25 China ...............................41.19 Egypt ...............................39.82 Pakistan ...........................38.41 Indonesia .........................35.33 Nigeria .............................27.28 Vietnam ...........................27.16 Bangladesh......................21.66 India.................................19.98
SOURCE: International Telecommunication Union, World Telecommunication Indicators 2008; national sources
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2.18
Cost of starting a business
Cost of registering property
Cost of starting a business as a percentage of income per capita | 2008
Cost of registering property as a percentage of income per capita | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 4 6 6 8 8 10 10 12 13 14 14 16 17 18 19 20 21 21 23 24 25 26 27 27 29 30 30 32 33 34 35 36 37 38 39 39 39 42 43 44 45 46 47 48 48 50 51 52 53 54 55
HARD DATA
Denmark............................0.00 Ireland................................0.30 Canada...............................0.50 Bahrain ..............................0.60 Sweden .............................0.60 Singapore ..........................0.70 United States.....................0.70 Australia.............................0.80 United Kingdom.................0.80 Finland ...............................1.00 France................................1.00 Kuwait ...............................1.30 Hong Kong SAR ................2.00 Norway ..............................2.10 Switzerland........................2.10 Russian Federation............2.60 Slovak Republic .................3.30 Israel..................................4.40 Thailand .............................4.90 Austria ...............................5.10 Belgium .............................5.20 Kazakhstan ........................5.20 Ukraine ..............................5.50 Germany............................5.60 Netherlands .......................5.90 South Africa.......................6.00 Chile ..................................7.50 Japan .................................7.50 Brazil..................................8.20 China .................................8.40 Hungary .............................8.40 Argentina ...........................9.00 Czech Republic..................9.60 Mexico.............................12.50 Pakistan ...........................12.60 United Arab Emirates ......13.40 Colombia .........................14.10 Malaysia ..........................14.70 Saudi Arabia.....................14.90 Spain................................14.90 Turkey ..............................14.90 Vietnam ...........................16.80 Korea, Rep.......................16.90 Italy..................................17.80 Egypt ...............................18.30 Poland..............................18.80 Panama............................19.60 Bangladesh......................25.70 Peru .................................25.70 Venezuela ........................26.80 Philippines .......................29.80 Jordan..............................60.40 India.................................70.10 Indonesia .........................77.90 Nigeria .............................90.10
SOURCE: The World Bank, Doing Business 2009
1 2 2 4 5 6 6 6 9 9 11 11 13 14 15 16 17 18 19 19 21 21 23 24 25 26 26 26 29 30 31 32 33 34 35 36 37 37 39 40 41 42 43 44 45 45 45 48 49 50 51 52 53 54 55
HARD DATA
Saudi Arabia.......................0.00 Kazakhstan ........................0.10 Slovak Republic .................0.10 Russian Federation............0.20 Switzerland........................0.40 Kuwait ...............................0.50 Poland................................0.50 United States.....................0.50 Denmark............................0.60 Italy....................................0.60 Bahrain ..............................0.90 Egypt .................................0.90 Thailand .............................1.10 Vietnam .............................1.20 Chile ..................................1.30 Canada...............................1.80 United Arab Emirates ........2.00 Venezuela ..........................2.20 Colombia ...........................2.40 Panama..............................2.40 Malaysia ............................2.50 Norway ..............................2.50 Brazil..................................2.70 Singapore ..........................2.80 Ukraine ..............................2.90 Czech Republic..................3.00 Sweden .............................3.00 Turkey ................................3.00 China .................................3.20 Peru ...................................3.30 Finland ...............................4.00 United Kingdom.................4.10 Philippines .........................4.30 Austria ...............................4.50 Mexico...............................4.80 Australia.............................4.90 Hong Kong SAR ................5.00 Japan .................................5.00 Korea, Rep.........................5.10 Germany............................5.20 Pakistan .............................5.30 Netherlands .......................6.10 France................................6.30 Spain..................................7.20 Argentina ...........................7.50 India...................................7.50 Israel..................................7.50 South Africa.......................8.80 Ireland................................9.60 Jordan..............................10.00 Bangladesh......................10.40 Indonesia .........................10.70 Hungary ...........................11.00 Belgium ...........................12.70 Nigeria .............................21.90
SOURCE: The World Bank, Doing Business 2009
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2.20
Cost of closing a business
Time to start a business
Cost of closing a business as a percentage of the estate | 2008
Time in days to start a business | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 1 1 1 5 5 5 5 5 5 5 5 5 14 15 15 17 17 17 20 20 20 20 20 20 20 27 28 28 30 30 30 30 30 30 30 37 37 37 37 37 37 37 44 45 45 45 45 45 50 51 52 53 53 55
HARD DATA
Colombia ...........................1.00 Kuwait ...............................1.00 Norway ..............................1.00 Singapore ..........................1.00 Belgium .............................4.00 Canada...............................4.00 Denmark............................4.00 Finland ...............................4.00 Japan .................................4.00 Korea, Rep.........................4.00 Netherlands .......................4.00 Pakistan .............................4.00 Switzerland........................4.00 United Kingdom.................6.00 Peru ...................................7.00 United States.....................7.00 Australia.............................8.00 Bangladesh........................8.00 Germany............................8.00 France................................9.00 Hong Kong SAR ................9.00 India...................................9.00 Ireland................................9.00 Jordan................................9.00 Russian Federation............9.00 Sweden .............................9.00 Bahrain ............................10.00 Argentina .........................12.00 Brazil................................12.00 Chile ................................15.00 Czech Republic................15.00 Hungary ...........................15.00 Malaysia ..........................15.00 Spain................................15.00 Turkey ..............................15.00 Vietnam ...........................15.00 Austria .............................18.00 Indonesia .........................18.00 Kazakhstan ......................18.00 Mexico.............................18.00 Panama............................18.00 Slovak Republic ...............18.00 South Africa.....................18.00 Poland..............................20.00 China ...............................22.00 Egypt ...............................22.00 Italy..................................22.00 Nigeria .............................22.00 Saudi Arabia.....................22.00 Israel................................23.00 United Arab Emirates ......30.00 Thailand ...........................36.00 Philippines .......................38.00 Venezuela ........................38.00 Ukraine ............................42.00
SOURCE: The World Bank, Doing Business 2009
1 2 2 4 4 6 6 6 9 9 11 12 12 12 15 16 17 17 17 17 21 21 23 23 25 26 26 28 29 30 31 32 33 34 34 36 36 38 39 40 40 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Australia.............................2.00 Belgium .............................4.00 Singapore ..........................4.00 Canada...............................5.00 Hungary .............................5.00 Denmark............................6.00 Turkey ................................6.00 United States.....................6.00 Egypt .................................7.00 France................................7.00 Bahrain ..............................9.00 Italy..................................10.00 Netherlands .....................10.00 Norway ............................10.00 Hong Kong SAR ..............11.00 Saudi Arabia.....................12.00 Ireland..............................13.00 Malaysia ..........................13.00 Panama............................13.00 United Kingdom...............13.00 Finland .............................14.00 Jordan..............................14.00 Czech Republic................15.00 Sweden ...........................15.00 Slovak Republic ...............16.00 Korea, Rep.......................17.00 United Arab Emirates ......17.00 Germany..........................18.00 Switzerland......................20.00 Kazakhstan ......................21.00 South Africa.....................22.00 Japan ...............................23.00 Pakistan ...........................24.00 Chile ................................27.00 Ukraine ............................27.00 Austria .............................28.00 Mexico.............................28.00 Russian Federation..........29.00 India.................................30.00 Nigeria .............................31.00 Poland..............................31.00 Argentina .........................32.00 Thailand ...........................33.00 Israel................................34.00 Kuwait .............................35.00 Colombia .........................36.00 China ...............................40.00 Spain................................47.00 Vietnam ...........................50.00 Philippines .......................52.00 Peru .................................65.00 Bangladesh......................73.00 Indonesia .........................76.00 Venezuela ......................141.00 Brazil..............................152.00
SOURCE: The World Bank, Doing Business 2009
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2.22
Time to register property
Time to close a business
Time in days to register property | 2008
Time in years to close a business | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 1 1 4 5 5 7 7 9 10 11 12 12 14 15 15 15 18 19 20 21 22 23 24 25 25 27 28 28 30 31 32 32 34 34 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 52 54 55
HARD DATA
Saudi Arabia.......................2.00 Sweden .............................2.00 Thailand .............................2.00 Norway ..............................3.00 Australia.............................5.00 Netherlands .......................5.00 Turkey ................................6.00 United Arab Emirates ........6.00 Singapore ..........................9.00 Korea, Rep.......................11.00 United States...................12.00 Finland .............................14.00 Japan ...............................14.00 Switzerland......................16.00 Canada.............................17.00 Hungary ...........................17.00 Slovak Republic ...............17.00 Spain................................18.00 United Kingdom...............21.00 Jordan..............................22.00 Colombia .........................23.00 South Africa.....................24.00 Italy..................................27.00 China ...............................29.00 Bahrain ............................31.00 Chile ................................31.00 Austria .............................32.00 Peru .................................33.00 Philippines .......................33.00 Ireland..............................38.00 Indonesia .........................39.00 Germany..........................40.00 Kazakhstan ......................40.00 Brazil................................42.00 Denmark..........................42.00 Panama............................44.00 India.................................45.00 Venezuela ........................47.00 Pakistan ...........................50.00 Argentina .........................51.00 Russian Federation..........52.00 Hong Kong SAR ..............54.00 Kuwait .............................55.00 Vietnam ...........................57.00 Egypt ...............................72.00 Mexico.............................74.00 Nigeria .............................82.00 Ukraine ............................93.00 France............................113.00 Czech Republic..............123.00 Belgium .........................132.00 Israel..............................144.00 Malaysia ........................144.00 Poland............................197.00 Bangladesh....................245.00
SOURCE: The World Bank, Doing Business 2009
1 2 3 3 5 5 5 8 8 8 11 11 11 11 15 16 16 16 19 20 20 22 23 23 23 23 27 28 28 30 31 31 33 34 34 34 37 38 38 40 41 41 41 41 41 46 46 48 49 50 51 52 53 54 55
HARD DATA
Ireland................................0.40 Japan .................................0.60 Canada...............................0.80 Singapore ..........................0.80 Belgium .............................0.90 Finland ...............................0.90 Norway ..............................0.90 Australia.............................1.00 Spain..................................1.00 United Kingdom.................1.00 Austria ...............................1.10 Denmark............................1.10 Hong Kong SAR ................1.10 Netherlands .......................1.10 Germany............................1.20 Korea, Rep.........................1.50 Saudi Arabia.......................1.50 United States.....................1.50 China .................................1.70 Italy....................................1.80 Mexico...............................1.80 France................................1.90 Hungary .............................2.00 Nigeria ...............................2.00 South Africa.......................2.00 Sweden .............................2.00 Malaysia ............................2.30 Bahrain ..............................2.50 Panama..............................2.50 Thailand .............................2.70 Argentina ...........................2.80 Pakistan .............................2.80 Ukraine ..............................2.90 Colombia ...........................3.00 Poland................................3.00 Switzerland........................3.00 Peru ...................................3.10 Kazakhstan ........................3.30 Turkey ................................3.30 Russian Federation............3.80 Bangladesh........................4.00 Brazil..................................4.00 Israel..................................4.00 Slovak Republic .................4.00 Venezuela ..........................4.00 Egypt .................................4.20 Kuwait ...............................4.20 Jordan................................4.30 Chile ..................................4.50 Vietnam .............................5.00 United Arab Emirates ........5.10 Indonesia ...........................5.50 Philippines .........................5.70 Czech Republic..................6.50 India.................................10.00
SOURCE: The World Bank, Doing Business 2009
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3.01
3.02
Change in real effective exchange rate
External vulnerability indicator
Average percentage change in real effective exchange rate from year to year over the period 2003–07. Higher REER represents appreciation | as of 2007
The external vulnerability indicator is the sum of several measures of external exposure expressed as a percentage of foreign exchange reserves | 2007
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 36 36 36 36 41 41 43 44 45 46 47 48 49 50 51 52 53 n/a n/a
HARD DATA
Brazil................................11.72 Russian Federation............7.36 Australia.............................7.16 Slovak Republic .................6.52 Venezuela ..........................5.22 Indonesia ...........................4.98 Chile ..................................4.84 Philippines .........................4.84 Italy....................................4.64 Turkey ................................4.62 Korea, Rep.........................3.84 Singapore ..........................3.74 Ireland................................3.66 Canada...............................3.52 Czech Republic..................3.32 Spain..................................3.18 Thailand .............................3.16 Norway ..............................3.12 Colombia ...........................2.46 Belgium .............................2.28 Poland................................1.94 Finland ...............................1.84 Netherlands .......................1.70 India...................................1.62 France................................1.46 Ukraine ..............................1.22 Hungary .............................1.16 Sweden .............................1.08 Pakistan .............................0.82 Austria ...............................0.72 Switzerland........................0.56 Argentina ...........................0.44 Denmark............................0.32 United Kingdom.................0.30 Mexico...............................0.00 Egypt .................................0.00 Jordan................................0.00 Kazakhstan ........................0.00 Kuwait ...............................0.00 United Arab Emirates ........0.00 China ................................-0.34 Israel.................................-0.34 Germany...........................-0.44 Vietnam ............................-0.66 Peru ..................................-0.80 Malaysia ...........................-1.96 Panama.............................-2.22 Japan ................................-4.22 Saudi Arabia......................-4.24 Hong Kong SAR ...............-4.54 United States....................-5.02 Bahrain .............................-5.42 South Africa....................-10.88 Bangladesh ..........................n/a Nigeria .................................n/a
SOURCE: Moody’s Statistical Handbook (November 2008)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Egypt ...............................13.90 China ...............................16.00 Malaysia ..........................21.10 Vietnam ...........................27.30 Pakistan ...........................28.10 India.................................29.50 Peru .................................31.60 Russian Federation..........34.70 Thailand ...........................38.00 Panama............................38.90 Saudi Arabia.....................39.20 Brazil................................42.10 Mexico.............................45.00 Philippines .......................47.10 Colombia .........................54.00 Indonesia .........................59.10 Venezuela ........................70.40 Korea, Rep.......................74.70 Ukraine ............................76.40 Czech Republic................82.30 South Africa.....................88.30 Argentina .......................102.80 Slovak Republic .............105.80 Chile ..............................108.70 Jordan............................112.90 Turkey ............................125.00 United Arab Emirates ....134.50 Poland............................140.60 Israel..............................141.20 Kuwait ...........................148.00 Kazakhstan ....................201.80 Hungary .........................286.00 Bahrain ..........................523.50 Australia...............................n/a Austria .................................n/a Bangladesh ..........................n/a Belgium ...............................n/a Canada.................................n/a Denmark ..............................n/a Finland .................................n/a France..................................n/a Germany ..............................n/a Hong Kong SAR...................n/a Ireland..................................n/a Italy ......................................n/a Japan ...................................n/a Netherlands .........................n/a Nigeria .................................n/a Norway ................................n/a Singapore.............................n/a Spain....................................n/a Sweden ...............................n/a Switzerland ..........................n/a United Kingdom...................n/a United States.......................n/a
SOURCE: Moody’s Statistical Handbook (November 2008)
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3.03
3.04
Current account balance to GDP
Dollarization vulnerability indicator
Current account balance to GDP provides an indicator of the difficulty a country might have in mobilizing the foreign exchange necessary for debt service | 2008
This variable measures the risk of payment crisis and default originating from the presence of a large amount of dollarization in the domestic banking system | 2007
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Kuwait .............................44.66 Saudi Arabia.....................28.87 Norway ............................18.37 Malaysia ..........................17.44 United Arab Emirates ......15.80 Singapore ........................14.83 Hong Kong SAR ..............14.21 Venezuela ........................12.27 Bahrain ............................10.62 China ...............................10.00 Switzerland........................9.10 Sweden .............................8.34 Germany............................6.42 Russian Federation............6.10 Kazakhstan ........................5.28 Nigeria ...............................4.48 Netherlands .......................4.41 Japan .................................3.19 Austria ...............................2.90 Finland ...............................2.53 Philippines .........................2.51 Argentina ...........................1.36 Israel..................................1.15 Bangladesh........................0.94 Canada...............................0.64 Egypt .................................0.55 Denmark............................0.54 Indonesia ...........................0.10 Thailand ...........................–0.07 Korea, Rep. ......................–0.68 Mexico.............................–1.43 France..............................–1.58 United Kingdom...............–1.70 Brazil ................................–1.80 Chile.................................–2.03 Belgium ...........................–2.55 India .................................–2.76 Colombia..........................–2.81 Czech Republic ................–3.07 Italy ..................................–3.16 Peru .................................–3.28 Australia...........................–4.24 Ireland..............................–4.51 United States...................–4.72 Poland..............................–5.52 Turkey ..............................–5.68 Slovak Republic ...............–6.31 Ukraine ............................–7.20 South Africa .....................–7.41 Hungary ...........................–7.83 Pakistan ...........................–8.37 Vietnam ...........................–9.38 Spain................................–9.56 Panama..........................–12.40 Jordan............................–12.69
SOURCE: IMF, World Economic Outlook Database (April 2009)
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Australia.............................0.00 Austria ...............................0.00 Belgium .............................0.00 Brazil..................................0.00 Canada...............................0.00 Colombia ...........................0.00 Denmark............................0.00 Finland ...............................0.00 France................................0.00 Germany............................0.00 Hong Kong SAR ................0.00 Ireland................................0.00 Italy....................................0.00 Japan .................................0.00 Netherlands .......................0.00 Norway ..............................0.00 Singapore ..........................0.00 Spain..................................0.00 Sweden .............................0.00 Switzerland........................0.00 United Kingdom.................0.00 United States.....................0.00 Venezuela ..........................0.60 Thailand .............................2.30 Mexico...............................3.20 India...................................4.70 Russian Federation............9.90 South Africa.....................10.20 Argentina .........................15.20 Pakistan ...........................18.70 Kazakhstan ......................26.70 Indonesia .........................28.80 Philippines .......................34.30 Peru .................................46.20 Ukraine ............................47.00 Vietnam ...........................47.90 Egypt ...............................62.80 Turkey ..............................79.40 Bahrain.................................n/a Bangladesh ..........................n/a Chile.....................................n/a China....................................n/a Czech Republic ....................n/a Hungary ...............................n/a Israel ....................................n/a Jordan..................................n/a Korea, Rep. ..........................n/a Kuwait..................................n/a Malaysia...............................n/a Nigeria .................................n/a Panama................................n/a Poland..................................n/a Saudi Arabia.........................n/a Slovak Republic ...................n/a United Arab Emirates ..........n/a
SOURCE: Moody’s Statistical Handbook (November 2008)
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3.05
3.06
External debt to GDP (developing economies)
Net international investment position to GDP (advanced economies)
External debt as a percentage of GDP | 2007
Net international investment position as a percentage of GDP | 2007
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
China ...............................10.90 India.................................17.70 Brazil................................18.30 Mexico.............................21.60 Egypt ...............................23.40 Venezuela ........................24.40 Thailand ...........................25.10 Colombia .........................26.00 South Africa.....................26.60 Pakistan ...........................27.90 Peru .................................28.70 Malaysia ..........................30.20 Indonesia .........................31.50 Kuwait .............................31.60 Chile ................................34.10 Russian Federation..........35.60 Turkey ..............................38.30 Vietnam ...........................39.60 Korea, Rep.......................40.90 Czech Republic................42.60 Philippines .......................45.50 Argentina .........................47.20 Poland..............................48.00 Panama............................51.20 Israel................................55.50 Slovak Republic ...............58.90 Ukraine ............................59.90 United Arab Emirates ......70.40 Jordan..............................90.00 Kazakhstan ......................93.50 Hungary .........................104.40 Bahrain ..........................167.20 Australia...............................n/a Austria .................................n/a Bangladesh ..........................n/a Belgium ...............................n/a Canada.................................n/a Denmark ..............................n/a Finland .................................n/a France..................................n/a Germany ..............................n/a Hong Kong SAR...................n/a Ireland..................................n/a Italy ......................................n/a Japan ...................................n/a Netherlands .........................n/a Nigeria .................................n/a Norway ................................n/a Saudi Arabia.........................n/a Singapore.............................n/a Spain....................................n/a Sweden ...............................n/a Switzerland ..........................n/a United Kingdom...................n/a United States.......................n/a
SOURCE: Moody’s Statistical Handbook (November 2008)
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Hong Kong SAR ............251.90 Switzerland....................138.50 Singapore ......................128.30 Norway ............................64.80 Japan ...............................53.30 Slovak Republic ...............–0.05 Finland .............................–0.17 Ireland..............................–0.18 Austria .............................–0.26 Belgium ...........................–0.32 Netherlands .....................–0.54 Spain................................–1.00 Italy ..................................–1.46 France..............................–1.79 Germany ..........................–2.30 Denmark ..........................–4.00 Sweden ...........................–6.80 Canada...........................–11.10 United States.................–17.60 United Kingdom.............–27.20 Australia.........................–71.60 Argentina .............................n/a Bahrain.................................n/a Bangladesh ..........................n/a Brazil ....................................n/a Chile.....................................n/a China....................................n/a Colombia..............................n/a Czech Republic ....................n/a Egypt ...................................n/a Hungary ...............................n/a India .....................................n/a Indonesia .............................n/a Israel ....................................n/a Jordan..................................n/a Kazakhstan...........................n/a Korea, Rep. ..........................n/a Kuwait..................................n/a Malaysia...............................n/a Mexico.................................n/a Nigeria .................................n/a Pakistan ...............................n/a Panama................................n/a Peru .....................................n/a Philippines ...........................n/a Poland..................................n/a Russian Federation ..............n/a Saudi Arabia.........................n/a South Africa .........................n/a Thailand ...............................n/a Turkey ..................................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Venezuela ............................n/a Vietnam ...............................n/a
SOURCE: Moody’s Statistical Handbook (November 2008)
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3.07
3.08
Frequency of banking crises
Financial strengths indicator
This variable is calculated based on the number of banking crises that countries experienced from 1970 to 2008. Recent crises are weighted more heavily | 2008
Weighted average financial strength rating by bank assets | 2008
RANK COUNTRY/ECONOMY
1 1 1 1 1 1 1 1 1 1 1 1 1 1 15 15 17 17 17 20 20 20 23 23 23 23 23 23 23 23 23 32 32 32 32 32 32 32 32 32 41 41 41 41 41 41 41 48 48 48 51 51 53 54 55
HARD DATA
Australia.............................0.00 Bahrain ..............................0.00 Canada...............................0.00 Denmark............................0.00 France................................0.00 Germany............................0.00 Hong Kong SAR ................0.00 Italy....................................0.00 Pakistan .............................0.00 Saudi Arabia.......................0.00 Singapore ..........................0.00 South Africa.......................0.00 Switzerland........................0.00 United Arab Emirates ........0.00 Israel..................................0.50 Spain..................................0.50 Egypt .................................0.75 Kuwait ...............................0.75 Peru ...................................0.75 Bangladesh........................1.00 Jordan................................1.00 Panama..............................1.00 Chile ..................................1.25 Finland ...............................1.25 Hungary .............................1.25 India...................................1.25 Nigeria ...............................1.25 Norway ..............................1.25 Poland................................1.25 Sweden .............................1.25 Venezuela ..........................1.25 China .................................1.50 Czech Republic..................1.50 Indonesia ...........................1.50 Japan .................................1.50 Korea, Rep.........................1.50 Malaysia ............................1.50 Russian Federation............1.50 Slovak Republic .................1.50 Vietnam .............................1.50 Austria ...............................2.00 Belgium .............................2.00 Ireland................................2.00 Kazakhstan ........................2.00 Mexico...............................2.00 Netherlands .......................2.00 United Kingdom.................2.00 Colombia ...........................2.25 Philippines .........................2.25 Thailand .............................2.25 Brazil..................................2.50 Turkey ................................2.50 United States.....................3.00 Ukraine ..............................3.50 Argentina ...........................5.00
SOURCE: Data on crises up to 2007 from Luc Laeven and Fabian Valencia. 2008. “Systemic Banking Crises: A New Database.” IMF Working Paper 08/224, Washington, DC; 2008 data and all weighting based on provisional World Economic Forum analysis.
RANK COUNTRY/ECONOMY
1 1 1 1 1 1 1 1 1 10 10 10 10 10 10 10 17 17 19 19 19 19 19 19 19 19 19 19 19 19 19 32 32 32 32 32 37 37 37 37 37 42 42 42 42 42 47 47 47 47 47 47 47 n/a n/a
HARD DATA
Australia.............................9.00 Canada...............................9.00 Denmark............................9.00 Finland ...............................9.00 Hong Kong SAR ................9.00 Singapore ..........................9.00 United Arab Emirates ........9.00 United Kingdom.................9.00 United States.....................9.00 Chile ..................................8.00 France................................8.00 Netherlands .......................8.00 Norway ..............................8.00 Spain..................................8.00 Sweden .............................8.00 Switzerland........................8.00 Germany............................7.00 Italy....................................7.00 Austria ...............................6.00 Belgium .............................6.00 Brazil..................................6.00 Czech Republic..................6.00 Hungary .............................6.00 Ireland................................6.00 Israel..................................6.00 Japan .................................6.00 Jordan................................6.00 Kuwait ...............................6.00 Mexico...............................6.00 Saudi Arabia.......................6.00 South Africa.......................6.00 Bahrain ..............................5.00 Korea, Rep.........................5.00 Malaysia ............................5.00 Panama..............................5.00 Poland................................5.00 Colombia ...........................4.00 India...................................4.00 Peru ...................................4.00 Slovak Republic .................4.00 Turkey ................................4.00 Argentina ...........................3.00 Egypt .................................3.00 Indonesia ...........................3.00 Philippines .........................3.00 Thailand .............................3.00 China .................................2.00 Kazakhstan ........................2.00 Pakistan .............................2.00 Russian Federation............2.00 Ukraine ..............................2.00 Venezuela ..........................2.00 Vietnam .............................2.00 Bangladesh ..........................n/a Nigeria .................................n/a
SOURCE: Moody’s Statistical Handbook (November 2008)
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3.09
3.10
Manageability of private debt
Aggregate measure of real estate bubbles
This is the sum of domestic debt securities and international debt securities for financial institutions and corporate issuers as a percentage of GDP | 2008
This is the aggregate measure of real estate bubbles based on priceto-income ratio and price-to-rent ratio | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Nigeria ...............................0.30 Vietnam .............................0.30 Pakistan .............................0.41 Poland................................0.59 Egypt .................................1.86 Colombia ...........................1.87 Turkey ................................1.87 Saudi Arabia.......................2.37 Kuwait ...............................2.58 Ukraine ..............................4.01 Venezuela ..........................4.53 Indonesia ...........................5.64 Israel..................................6.20 Argentina ...........................6.47 Peru ...................................6.63 Slovak Republic .................6.99 Russian Federation............7.19 Panama..............................7.31 India...................................7.83 Philippines .......................11.67 Czech Republic................17.67 Hungary ...........................18.87 Bahrain ............................20.00 Mexico.............................20.46 Chile ................................24.19 Brazil................................24.84 China ...............................27.97 South Africa.....................29.88 Kazakhstan ......................32.74 Canada.............................57.10 Singapore ........................63.73 Finland .............................70.86 Hong Kong SAR ..............72.66 Norway ............................85.09 Korea, Rep.......................86.34 Malaysia ........................122.43 Australia.........................142.36 Italy................................146.27 Sweden .........................148.50 United Kingdom.............152.41 Switzerland....................176.14 Netherlands ...................230.42 Denmark........................249.89 Ireland............................296.15 Austria .................................n/a Bangladesh ..........................n/a Belgium ...............................n/a France..................................n/a Germany ..............................n/a Japan ...................................n/a Jordan..................................n/a Spain....................................n/a Thailand ...............................n/a United Arab Emirates ..........n/a United States.......................n/a
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 Database (April 2009)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Ireland................................6.71 Chile ..................................6.53 Vietnam .............................6.52 Malaysia ............................6.42 Egypt .................................6.40 Panama..............................6.31 Peru ...................................6.30 Jordan................................6.08 Colombia ...........................6.08 Argentina ...........................6.08 Netherlands .......................5.99 Canada...............................5.95 Hungary .............................5.86 Mexico...............................5.57 Brazil..................................5.55 Indonesia ...........................5.47 Australia.............................5.47 United Arab Emirates ........5.33 Turkey ................................5.29 Poland................................5.23 Belgium .............................5.13 Germany............................5.06 Israel..................................5.03 Switzerland........................5.00 Thailand .............................4.90 Denmark............................4.88 Czech Republic..................4.86 Ukraine ..............................4.85 Austria ...............................4.75 South Africa.......................4.54 Japan .................................4.27 Philippines .........................4.24 Slovak Republic .................4.24 France................................4.23 United States.....................3.98 Finland ...............................3.84 Singapore ..........................3.74 Italy....................................3.66 United Kingdom.................3.44 Hong Kong SAR ................2.83 Russian Federation............1.92 China .................................1.76 India...................................1.39 Spain..................................1.00 Bahrain.................................n/a Bangladesh ..........................n/a Kazakhstan...........................n/a Korea, Rep. ..........................n/a Kuwait..................................n/a Nigeria .................................n/a Norway ................................n/a Pakistan ...............................n/a Saudi Arabia.........................n/a Sweden ...............................n/a Venezuela ............................n/a
SOURCE: Global Property Guide website, www.globalpropertyguide.com
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3.11
3.12
Local currency sovereign rating
Foreign currency sovereign rating
This variable measures the probability that a country will pay its local currency borrowing in a full and timely manner | 2009
This variable measures the probability that a country will pay its foreign currency borrowing in a full and timely manner | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 1 1 1 1 1 1 1 1 1 1 1 1 14 15 16 16 18 19 19 21 21 21 24 24 24 24 24 24 30 31 32 32 34 35 35 35 38 39 40 41 42 43 44 44 44 47 48 49 50 51 52 52 n/a n/a
HARD DATA
Australia...........................20.00 Austria .............................20.00 Canada.............................20.00 Denmark..........................20.00 Finland .............................20.00 France..............................20.00 Germany..........................20.00 Netherlands .....................20.00 Norway ............................20.00 Singapore ........................20.00 Sweden ...........................20.00 Switzerland......................20.00 United States...................20.00 United Kingdom...............19.83 Spain................................19.08 Belgium ...........................19.00 Hong Kong SAR ..............19.00 Ireland..............................18.37 Chile ................................18.00 Japan ...............................18.00 Israel................................17.00 Kuwait .............................17.00 Saudi Arabia.....................17.00 China ...............................16.00 Czech Republic................16.00 Italy..................................16.00 Korea, Rep.......................16.00 Malaysia ..........................16.00 Slovak Republic ...............16.00 Mexico.............................15.83 South Africa.....................15.70 Bahrain ............................15.00 Poland..............................15.00 Thailand ...........................14.03 Brazil................................13.00 Colombia .........................13.00 Peru .................................13.00 Russian Federation..........12.70 Jordan..............................12.00 Kazakhstan ......................11.90 Egypt ...............................11.00 Hungary ...........................10.95 India.................................10.75 Indonesia .........................10.00 Panama............................10.00 Philippines .......................10.00 Vietnam .............................9.70 Turkey ................................8.70 Nigeria ...............................8.21 Venezuela ..........................7.70 Ukraine ..............................5.28 Argentina ...........................5.00 Pakistan .............................5.00 Bangladesh ..........................n/a United Arab Emirates ..........n/a
SOURCE: Standard and Poorâ&#x20AC;&#x2122;s, August 2009
1 1 1 1 1 1 1 1 1 1 1 1 1 14 15 16 16 18 19 20 20 22 22 22 22 26 26 26 26 30 30 32 33 33 35 36 36 38 39 40 41 41 41 44 45 46 46 48 48 50 51 51 53 n/a n/a
HARD DATA
Australia...........................20.00 Austria .............................20.00 Canada.............................20.00 Denmark..........................20.00 Finland .............................20.00 France..............................20.00 Germany..........................20.00 Netherlands .....................20.00 Norway ............................20.00 Singapore ........................20.00 Sweden ...........................20.00 Switzerland......................20.00 United States...................20.00 United Kingdom...............19.83 Spain................................19.08 Belgium ...........................19.00 Hong Kong SAR ..............19.00 Ireland..............................18.37 Japan ...............................18.00 Kuwait .............................17.00 Saudi Arabia.....................17.00 Chile ................................16.00 China ...............................16.00 Italy..................................16.00 Slovak Republic ...............16.00 Bahrain ............................15.00 Czech Republic................15.00 Israel................................15.00 Korea, Rep.......................15.00 Malaysia ..........................14.00 Poland..............................14.00 Mexico.............................12.83 South Africa.....................12.70 Thailand ...........................12.70 Russian Federation..........11.70 Brazil................................11.00 Peru .................................11.00 Hungary ...........................10.95 Kazakhstan ......................10.90 India.................................10.75 Colombia .........................10.00 Egypt ...............................10.00 Panama............................10.00 Jordan................................9.00 Vietnam .............................8.70 Indonesia ...........................8.00 Philippines .........................8.00 Turkey ................................7.70 Venezuela ..........................7.70 Nigeria ...............................7.54 Argentina ...........................5.00 Pakistan .............................5.00 Ukraine ..............................4.28 Bangladesh ..........................n/a United Arab Emirates ..........n/a
SOURCE: Standard and Poorâ&#x20AC;&#x2122;s, August 2009
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3.13
3.14
Aggregate macroprudential indicator
Manageability of public debt
This is the aggregate measure of macroprudential soundness based on real GDP growth, deposit interest rate, inflation volatility, and inflation level
This index is based on total debt owed by government to domestic residents, foreign nationals, and multilateral institutions as a percentage of GDP | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Peru ...................................6.53 Slovak Republic .................6.27 Poland................................6.06 Bahrain ..............................6.03 Israel..................................5.84 China .................................5.82 Panama..............................5.71 Switzerland........................5.70 France................................5.49 Netherlands .......................5.48 Mexico...............................5.43 Austria ...............................5.42 Canada...............................5.42 Czech Republic..................5.37 Japan .................................5.36 Germany............................5.31 Argentina ...........................5.30 Kuwait ...............................5.25 Hong Kong SAR ................5.24 Korea, Rep.........................5.19 Malaysia ............................5.18 Norway ..............................5.18 Finland ...............................5.07 Saudi Arabia.......................5.05 United Kingdom.................5.01 Belgium .............................4.97 Thailand .............................4.96 Spain..................................4.95 Philippines .........................4.91 Bangladesh........................4.87 Australia.............................4.87 Russian Federation............4.87 Sweden .............................4.85 United States.....................4.81 Brazil..................................4.78 Denmark............................4.77 India...................................4.69 Indonesia ...........................4.66 Chile ..................................4.66 Singapore ..........................4.59 Colombia ...........................4.51 Italy....................................4.51 Ireland................................4.46 Pakistan .............................4.46 Hungary .............................4.41 Egypt .................................4.35 Kazakhstan ........................4.22 South Africa.......................3.94 United Arab Emirates ........3.89 Jordan................................3.52 Venezuela ..........................3.18 Turkey ................................3.14 Vietnam .............................3.14 Nigeria ...............................2.87 Ukraine ..............................2.58
SOURCE: GDP and inflation level data from IMF, World Economic Outlook Database (April 2009); deposit interest rate data from World Bank Financial Development Indicators, retrieved June 2009; inflation volatility data from Bloomberg, retrieved June 2009.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Chile ..................................5.21 Russian Federation............6.70 Kuwait ...............................7.50 Kazakhstan ........................8.63 Ukraine ............................10.30 Venezuela ........................13.77 Hong Kong SAR ..............13.90 Nigeria .............................14.70 Australia...........................14.72 China ...............................15.60 Saudi Arabia.....................19.00 Peru .................................24.04 Korea, Rep.......................24.44 Czech Republic................26.70 Slovak Republic ...............28.69 Indonesia .........................29.30 Bahrain ............................30.00 South Africa.....................31.60 Denmark..........................32.80 Finland .............................33.40 Ireland..............................34.85 Mexico.............................35.80 Sweden ...........................36.70 Brazil................................36.90 United States...................37.54 Thailand ...........................37.90 Bangladesh......................39.40 Malaysia ..........................40.00 Turkey ..............................40.03 Spain................................40.40 United Arab Emirates ......40.70 Switzerland......................40.90 Colombia .........................42.56 Panama............................45.04 Poland..............................45.22 Vietnam ...........................48.10 Argentina .........................48.60 Pakistan ...........................51.20 United Kingdom...............51.88 Norway ............................55.74 India.................................56.45 Philippines .......................56.86 Netherlands .....................58.07 Jordan..............................62.20 Austria .............................62.57 Canada.............................63.80 Germany..........................66.00 Hungary ...........................67.70 France..............................68.10 Israel................................78.02 Egypt ...............................86.50 Belgium ...........................89.60 Singapore ........................99.24 Italy................................105.83 Japan .............................172.09
SOURCE: Economist Intelligence Unit CountryData Database, data retrieved August 2009
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RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Norway ............................32.50 Finland .............................37.50 Germany..........................37.79 France..............................40.00 United States...................44.50 Japan ...............................49.50 Australia...........................57.64 Netherlands .....................57.77 Denmark..........................62.14 Switzerland......................65.00 Belgium ...........................68.27 Hong Kong SAR ..............75.31 China ...............................87.65 Sweden ...........................88.25 United Kingdom...............90.43 Slovak Republic ...............91.75 Spain..............................104.33 Italy................................110.42 Malaysia ........................117.79 Austria ...........................119.47 Thailand .........................121.79 Chile ..............................127.85 Czech Republic..............127.95 Saudi Arabia...................150.84 Israel..............................175.00 Poland............................183.74 Brazil..............................189.83 Peru ...............................195.53 Korea, Rep.....................196.93 Colombia .......................224.65 South Africa...................225.45 Mexico...........................228.25 Panama..........................229.42 Ireland............................230.25 Philippines .....................240.00 Turkey ............................274.00 Russian Federation........319.59 Egypt .............................325.00 Vietnam .........................338.35 Indonesia .......................340.28 Bahrain ..........................356.54 Hungary .........................375.01 Kazakhstan ....................508.90 Ukraine .......................1,837.07 Argentina ....................2,135.89 Bangladesh ..........................n/a Canada.................................n/a India .....................................n/a Jordan..................................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Singapore.............................n/a United Arab Emirates ..........n/a Venezuela ............................n/a
SOURCE: Bloomberg, data retrieved June 2009
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4.02
Deposit money bank assets to GDP
Central bank assets to GDP
Claims on domestic real nonfinancial sector by deposit money banks as a share of GDP | 2007 or most recent year available
Claims on domestic real nonfinancial sector by the central bank as a share of GDP | 2007 or most recent year available
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 n/a n/a n/a
HARD DATA
Denmark........................199.30 Netherlands ...................188.85 Ireland............................185.86 Switzerland....................181.42 Spain..............................179.63 United Kingdom.............175.89 Japan .............................153.29 Hong Kong SAR ............147.70 Canada...........................141.30 Germany........................126.67 Sweden .........................124.47 Austria ...........................124.20 France............................117.33 Jordan............................116.32 Italy................................116.15 Australia.........................114.30 Singapore ......................110.82 Belgium .........................108.67 Korea, Rep.....................107.61 Malaysia ........................106.84 Israel................................95.92 Thailand ...........................93.62 Vietnam ...........................85.16 South Africa.....................83.52 Norway1 ...........................83.33 Finland .............................81.58 Panama............................80.73 Brazil................................77.91 Hungary ...........................70.61 Egypt ...............................68.85 Chile ................................67.22 United States...................65.94 Kuwait .............................61.15 India.................................61.08 Bahrain1 ...........................58.21 Czech Republic................55.53 Slovak Republic ...............52.59 Bangladesh......................51.65 Kazakhstan ......................49.57 Saudi Arabia.....................48.45 Poland..............................45.93 Turkey ..............................45.74 Colombia .........................44.02 Pakistan ...........................38.34 Philippines .......................36.34 Russian Federation..........34.94 Indonesia .........................31.52 Mexico.............................29.69 Nigeria .............................23.86 Argentina .........................22.77 Venezuela ........................22.59 Peru .................................19.56 China....................................n/a Ukraine ................................n/a United Arab Emirates ..........n/a
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Egypt ...............................27.94 Japan ...............................14.83 Brazil................................13.08 Panama............................12.77 Indonesia ...........................7.69 Argentina ...........................7.01 Pakistan .............................6.74 Bangladesh........................5.87 Jordan................................5.65 United States.....................5.55 Italy....................................4.82 Philippines .........................4.63 Australia.............................4.34 Canada...............................3.22 Singapore ..........................2.68 Chile ..................................2.41 Thailand .............................2.13 India...................................2.13 Turkey ................................2.11 Nigeria ...............................1.90 United Kingdom.................1.83 Vietnam .............................1.54 Spain..................................1.47 Switzerland........................1.39 Korea, Rep.........................1.28 Austria ...............................1.16 Israel2 .................................1.01 Malaysia ............................0.93 Russian Federation............0.92 Hungary .............................0.81 Mexico1 .............................0.72 South Africa.......................0.71 France................................0.61 Colombia ...........................0.59 Denmark............................0.49 Venezuela ..........................0.44 Belgium .............................0.44 Czech Republic..................0.25 Finland ...............................0.21 Germany............................0.18 Kazakhstan ........................0.18 Netherlands .......................0.14 Ireland................................0.04 Slovak Republic .................0.02 Poland................................0.01 Peru ...................................0.00 Bahrain.................................n/a China....................................n/a Hong Kong SAR...................n/a Kuwait..................................n/a Norway ................................n/a Saudi Arabia.........................n/a Sweden ...............................n/a Ukraine ................................n/a United Arab Emirates ..........n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
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2005
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4.03
4.04
Financial system deposits to GDP
M2 to GDP
Demand, time, and savings deposits in deposit money banks and other financial institutions as a share of GDP | 2007 or most recent year available
Money and quasi-money supply as a percentage of GDP | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 n/a n/a n/a
HARD DATA
Hong Kong SAR ............267.93 Japan .............................186.17 Switzerland....................158.14 United Kingdom.............141.88 Canada...........................132.38 Spain..............................121.48 Netherlands ...................115.85 Jordan............................111.67 Singapore ......................111.40 Malaysia ........................109.79 Germany........................100.79 Belgium ...........................98.65 Ireland..............................93.13 Thailand ...........................89.19 Israel................................86.53 Austria .............................86.16 Australia...........................85.42 Panama............................77.60 Egypt ...............................77.53 Bahrain1 ...........................73.89 United States...................73.80 France..............................68.51 Korea, Rep.......................63.43 Denmark..........................62.31 South Africa.....................61.41 Italy..................................60.70 Czech Republic................60.34 Vietnam ...........................57.78 India.................................57.60 Brazil................................56.08 Kuwait .............................52.44 Philippines .......................51.19 Norway1 ...........................50.60 Finland .............................49.65 Bangladesh......................49.50 Sweden ...........................49.24 Chile ................................49.09 Slovak Republic ...............48.22 Hungary ...........................44.69 Poland..............................39.32 Saudi Arabia.....................38.52 Turkey ..............................37.55 Pakistan ...........................35.51 Indonesia .........................34.10 Russian Federation..........27.03 Kazakhstan ......................26.82 Venezuela ........................24.66 Peru .................................22.49 Mexico.............................21.15 Argentina .........................20.46 Colombia .........................20.13 Nigeria .............................16.58 China....................................n/a Ukraine ................................n/a United Arab Emirates ..........n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008 1
2006
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Hong Kong SAR ............312.75 China .............................163.09 Spain..............................153.34 Switzerland....................145.34 Japan .............................144.71 United Kingdom.............135.19 Netherlands ...................132.58 Singapore ......................129.52 Jordan............................126.32 Malaysia ........................120.68 Germany........................118.82 Thailand .........................109.31 Belgium .........................108.32 Australia.........................107.58 Ireland............................101.03 Austria ...........................100.41 Bahrain ............................96.53 Vietnam ...........................94.97 Panama............................91.54 Egypt ...............................90.29 France..............................80.21 India.................................78.34 Italy..................................78.13 Canada.............................75.83 Czech Republic................75.79 United Arab Emirates ......73.76 Denmark..........................72.70 Brazil................................70.25 South Africa.....................66.76 Korea, Rep.......................66.76 Finland .............................64.02 Bangladesh......................61.21 Sweden ...........................59.34 Chile ................................59.34 Norway ............................58.91 Slovak Republic ...............58.26 United States...................57.16 Hungary ...........................56.97 Philippines .......................55.11 Kuwait .............................54.93 Poland..............................52.13 Ukraine ............................52.01 Saudi Arabia.....................51.41 Pakistan ...........................49.99 Israel................................48.99 Turkey ..............................44.65 Russian Federation..........40.38 Kazakhstan ......................40.04 Indonesia .........................38.20 Nigeria .............................37.33 Peru .................................34.30 Argentina .........................31.37 Venezuela ........................28.44 Mexico.............................26.85 Colombia .........................22.32
SOURCE: Economist Intelligence Unit CountryData Database, data retrieved April 2009
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4.05
4.06
Private credit to GDP
Bank deposits to GDP
Private credit by deposit-money banks and other financial institutions as a percentage of GDP | 2007 or most recent year available
This variable shows the demand, time, and savings deposits in deposit money banks as a share of GDP | 2007 or most recent year available
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 n/a n/a n/a
HARD DATA
United States.................202.42 Denmark........................190.90 Ireland............................184.30 Netherlands ...................179.11 United Kingdom.............176.33 Switzerland....................170.38 Spain..............................168.65 Canada...........................157.10 South Africa...................155.44 Hong Kong SAR ............132.41 Sweden .........................115.72 Australia.........................113.88 Austria ...........................111.15 Germany........................104.91 Norway1 .........................101.96 Korea, Rep.....................100.89 Malaysia ........................100.69 France............................100.56 Japan ...............................96.76 Italy..................................96.46 Jordan..............................92.50 Singapore ........................91.91 Israel................................86.58 Belgium ...........................85.45 Thailand ...........................82.71 Chile ................................80.21 Finland .............................77.75 Panama............................77.49 Vietnam ...........................76.72 Bahrain1 ...........................66.23 Kuwait .............................61.53 Hungary ...........................57.19 Kazakhstan ......................48.17 Egypt ...............................43.89 Brazil................................43.63 India.................................43.41 Saudi Arabia.....................43.31 Czech Republic................42.43 Slovak Republic ...............38.59 Colombia .........................36.14 Poland..............................35.15 Bangladesh......................34.44 Russian Federation..........31.64 Philippines .......................27.99 Pakistan ...........................27.18 Turkey ..............................26.02 Indonesia .........................22.67 Mexico.............................20.04 Venezuela ........................18.34 Peru .................................18.24 Nigeria .............................17.26 Argentina .........................12.51 China....................................n/a Ukraine ................................n/a United Arab Emirates ..........n/a
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 n/a
HARD DATA
Hong Kong SAR ............267.93 Japan .............................186.17 China1 ............................147.12 United Kingdom.............141.88 Switzerland....................135.95 Canada...........................132.38 Spain..............................121.48 Netherlands ...................115.85 Jordan............................111.67 Malaysia ........................109.79 Singapore ......................107.89 Germany........................100.79 Belgium ...........................98.65 Ireland..............................93.13 Thailand ...........................89.19 Israel................................86.53 Austria .............................86.16 Australia...........................85.42 Panama............................77.60 Egypt ...............................77.53 United States...................73.80 France..............................68.51 Korea, Rep.......................63.43 Denmark..........................62.31 South Africa.....................61.41 Italy..................................60.70 Czech Republic................60.34 Bahrain1 ...........................59.43 Vietnam ...........................57.78 India.................................57.60 Brazil................................56.08 Kuwait .............................52.44 Norway1 ...........................50.60 Finland .............................49.65 Bangladesh......................49.50 Sweden ...........................49.24 Chile ................................49.09 Slovak Republic ...............48.22 Philippines .......................46.19 Hungary ...........................44.69 Poland..............................39.32 Saudi Arabia.....................38.52 Turkey ..............................37.55 Pakistan ...........................34.86 Indonesia .........................34.10 Ukraine1 ...........................33.86 Russian Federation..........27.03 Kazakhstan ......................26.82 Venezuela ........................24.52 Peru .................................22.48 Mexico.............................21.15 Argentina .........................20.38 Colombia .........................20.13 Nigeria .............................16.58 United Arab Emirates ..........n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
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4.08
Money market instruments to GDP
Aggregate profitability indicator
Total money market instruments (US$ billions) as a percentage of GDP | 2008
Based on a three-year average of three measures of profitability: net interest margin, bank return on assets, and bank return on equity | 2005–07 average
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 27 27 27 27 27 27 27 27 27 27 27 27 27 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Ireland..............................45.04 United Kingdom...............11.60 Netherlands .....................10.62 Sweden .............................7.49 Austria ...............................6.89 Denmark............................5.48 Belgium .............................5.15 Australia.............................4.15 Finland ...............................3.69 Germany............................3.38 Norway ..............................3.02 France................................2.85 Spain..................................2.00 Hong Kong SAR ................1.48 Singapore ..........................1.15 United States.....................0.61 United Arab Emirates ........0.50 Canada...............................0.20 Switzerland........................0.12 Brazil..................................0.08 Philippines .........................0.06 Japan .................................0.04 Thailand .............................0.04 Argentina ...........................0.03 Mexico...............................0.01 Italy....................................0.01 Chile ..................................0.00 China .................................0.00 Colombia ...........................0.00 Hungary .............................0.00 India...................................0.00 Indonesia ...........................0.00 Israel..................................0.00 Malaysia ............................0.00 Panama..............................0.00 Peru ...................................0.00 Poland................................0.00 South Africa.......................0.00 Turkey ................................0.00 Venezuela ..........................0.00 Bahrain.................................n/a Bangladesh ..........................n/a Czech Republic ....................n/a Egypt ...................................n/a Jordan..................................n/a Kazakhstan...........................n/a Korea, Rep. ..........................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Russian Federation ..............n/a Saudi Arabia.........................n/a Slovak Republic ...................n/a Ukraine ................................n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Quarterly Review March 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Saudi Arabia.......................6.38 United Arab Emirates ........6.33 Bahrain ..............................6.08 Kuwait ...............................5.97 Netherlands .......................5.68 Australia.............................5.20 Bangladesh........................5.03 Venezuela ..........................4.85 Belgium .............................4.77 Singapore ..........................4.76 Slovak Republic .................4.74 Jordan................................4.66 Turkey ................................4.65 Panama..............................4.58 Nigeria ...............................4.53 Denmark............................4.47 Switzerland........................4.47 Vietnam .............................4.46 Kazakhstan ........................4.42 Hong Kong SAR ................4.41 Malaysia ............................4.23 Colombia ...........................4.22 Austria ...............................4.22 South Africa.......................4.18 Spain..................................4.13 Czech Republic..................4.09 India...................................4.07 Poland................................4.00 Finland ...............................3.95 Israel..................................3.93 France................................3.93 Korea, Rep.........................3.82 Sweden .............................3.79 China .................................3.78 Egypt .................................3.75 Canada...............................3.67 Brazil..................................3.67 Norway ..............................3.65 Indonesia ...........................3.63 Ireland................................3.62 Pakistan .............................3.56 Peru ...................................3.51 United Kingdom.................3.42 Italy....................................3.40 Ukraine ..............................3.28 Russian Federation............3.26 United States.....................3.24 Germany............................3.23 Japan .................................2.99 Hungary .............................2.76 Chile ..................................2.54 Argentina ...........................2.52 Philippines .........................2.48 Thailand .............................2.40 Mexico...............................1.00
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
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4.09
4.10
Bank overhead costs
Public ownership of banks
Bank overhead costs as a percentage of total assets | 2007
Percentage of assets held by the 10 largest banks that is located in banks that are 25 percent or more government owned | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Singapore ..........................1.00 Vietnam .............................1.05 China .................................1.05 Norway ..............................1.23 Hong Kong SAR ................1.27 United Arab Emirates ........1.41 Spain..................................1.42 Japan .................................1.44 Saudi Arabia.......................1.54 Kuwait ...............................1.56 Australia.............................1.64 Korea, Rep.........................1.69 Malaysia ............................1.73 India...................................1.77 Finland ...............................1.88 Ireland................................1.97 Jordan................................2.02 Czech Republic..................2.06 Egypt .................................2.15 Thailand .............................2.23 Sweden .............................2.23 Israel..................................2.37 United Kingdom.................2.40 Bangladesh........................2.41 Slovak Republic .................2.46 Pakistan .............................2.53 Canada...............................2.59 Denmark............................2.59 Italy....................................2.67 Poland................................2.92 Indonesia ...........................2.95 Belgium .............................2.96 Bahrain ..............................3.02 France................................3.03 Kazakhstan ........................3.06 Chile ..................................3.35 Panama..............................3.35 United States.....................3.50 Philippines .........................3.72 Ukraine ..............................3.83 Turkey ................................4.06 Austria ...............................4.12 Switzerland........................4.35 Nigeria ...............................4.38 Venezuela ..........................4.39 South Africa.......................4.58 Colombia ...........................5.26 Germany............................5.48 Peru ...................................5.70 Netherlands .......................5.74 Russian Federation............7.66 Argentina ...........................7.97 Brazil..................................9.23 Hungary ...........................10.91 Mexico.............................12.09
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
1 1 1 1 1 1 1 1 1 1 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Belgium .............................0.00 Czech Republic..................0.00 Denmark............................0.00 France................................0.00 Hong Kong SAR ................0.00 Jordan................................0.00 Nigeria ...............................0.00 Panama..............................0.00 Singapore ..........................0.00 Slovak Republic .................0.00 United States.....................0.00 Finland ...............................0.58 Canada...............................1.17 South Africa.......................1.88 Spain..................................2.00 Australia.............................2.27 Colombia ...........................4.08 Hungary .............................4.21 Venezuela ..........................5.49 Japan .................................5.92 Poland................................6.08 Mexico...............................6.50 Peru ...................................6.51 Thailand .............................6.69 Sweden .............................6.79 Italy....................................8.15 Norway ..............................8.18 Switzerland........................8.23 Austria ...............................8.84 Brazil..................................9.14 Korea, Rep.........................9.30 Ukraine ............................10.40 Kuwait .............................13.99 Saudi Arabia.....................14.76 Bahrain ............................16.61 Chile ................................16.66 Ireland..............................16.69 Philippines .......................17.64 Israel................................18.35 United Kingdom...............27.53 Germany..........................27.55 Pakistan ...........................30.79 Turkey ..............................32.08 Kazakhstan ......................36.36 Netherlands .....................38.60 India.................................40.71 Argentina .........................46.21 China ...............................49.04 Malaysia ..........................50.35 United Arab Emirates ......57.37 Russian Federation..........58.32 Indonesia .........................61.33 Bangladesh......................65.91 Egypt ...............................68.28 Vietnam ...........................73.73
SOURCE: BankScope database, data retrieved June 2009
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4.11
4.12
Bank operating costs to assets
Non-performing bank loans to total loans
Non interest expense as a percentage of average assets in last reported year | 2008
Percentage of non-performing bank loans relative to total number of loans outstanding | 2008 or most recent year available
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Japan .................................0.76 Finland ...............................0.88 Sweden .............................0.91 Germany............................0.96 Denmark............................1.04 Ireland................................1.05 Norway ..............................1.13 France................................1.16 Belgium .............................1.19 Netherlands .......................1.21 Singapore ..........................1.31 United Kingdom.................1.37 Hong Kong SAR ................1.39 Switzerland........................1.58 Australia.............................1.59 China .................................1.78 Saudi Arabia.......................1.79 Malaysia ............................1.82 United Arab Emirates ........1.84 Austria ...............................1.99 Jordan................................2.03 Spain..................................2.04 Italy....................................2.21 Canada...............................2.28 Czech Republic..................2.29 Kuwait ...............................2.64 Vietnam .............................2.80 United States.....................2.86 Israel..................................3.05 Egypt .................................3.08 Poland................................3.09 Thailand .............................3.18 India...................................3.22 Slovak Republic .................3.28 Philippines .........................3.50 Korea, Rep.........................3.58 South Africa.......................3.79 Chile ..................................3.84 Turkey ................................3.95 Pakistan .............................4.04 Indonesia ...........................4.95 Panama..............................4.99 Peru ...................................5.09 Kazakhstan ........................5.45 Argentina ...........................5.54 Nigeria ...............................5.57 Brazil..................................5.64 Bangladesh........................5.78 Mexico...............................6.13 Hungary .............................6.57 Venezuela ..........................6.76 Ukraine ..............................7.14 Colombia ...........................7.22 Bahrain ..............................7.56 Russian Federation..........11.23
SOURCE: BankScope database, data retrieved June 2009
1 2 3 4 5 5 7 7 9 9 11 11 13 13 15 15 17 18 19 19 19 22 22 22 22 22 27 28 28 30 30 30 33 33 35 36 37 38 38 40 41 42 43 44 45 45 47 48 49 50 n/a n/a n/a n/a n/a
HARD DATA
Denmark1 ...........................0.30 Finland ...............................0.40 Australia.............................0.50 Norway ..............................0.80 Chile ..................................0.90 United Kingdom1 ...............0.90 Hong Kong SAR ................1.00 Sweden .............................1.00 Canada...............................1.10 Korea, Rep.........................1.10 Panama..............................1.40 Singapore ..........................1.40 Belgium .............................1.50 Japan .................................1.50 Austria1 ..............................1.70 Israel1 .................................1.70 Saudi Arabia1 .....................2.10 Peru ...................................2.20 India...................................2.30 United States.....................2.30 Venezuela ..........................2.30 Argentina ...........................2.50 China .................................2.50 Mexico...............................2.50 Russian Federation............2.50 United Arab Emirates ........2.50 South Africa.......................2.60 France1 ..............................2.70 Germany1 ...........................2.70 Brazil..................................2.90 Hungary .............................2.90 Slovak Republic .................2.90 Czech Republic..................3.10 Kuwait ...............................3.10 Spain..................................3.20 Turkey ................................3.30 Indonesia ...........................3.50 Colombia ...........................4.00 Jordan................................4.00 Poland................................4.40 Italy1 ...................................4.60 Malaysia ............................5.10 Philippines .........................5.20 Nigeria ...............................6.10 Kazakhstan ........................6.50 Thailand .............................6.50 Pakistan .............................8.40 Bangladesh......................13.00 Ukraine ............................14.50 Egypt ...............................16.50 Bahrain.................................n/a Ireland..................................n/a Netherlands .........................n/a Switzerland ..........................n/a Vietnam ...............................n/a
SOURCE: IMF, Global Financial Stability Report, April 2009 1
2007
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4.13
4.14
Private credit bureau coverage
Public credit registry coverage
Percentage of adults covered by a private credit registry | 2008
Percentage of adults covered by a public credit registry | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 1 1 1 1 1 1 1 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 37 39 40 41 42 43 44 45 46 46 46 46 46 46 46 46 46 n/a
HARD DATA
Argentina .......................100.00 Australia.........................100.00 Canada...........................100.00 Ireland............................100.00 Norway ..........................100.00 Sweden .........................100.00 United Kingdom.............100.00 United States.................100.00 Germany..........................98.40 Israel................................91.00 Korea, Rep.......................90.40 Netherlands .....................81.00 Japan ...............................76.20 Italy..................................74.90 Mexico.............................70.80 Hong Kong SAR ..............69.90 Czech Republic................65.20 South Africa.....................64.80 Brazil................................62.20 Poland..............................50.00 Singapore ........................48.30 Panama............................43.70 Colombia .........................42.50 Austria .............................40.90 Slovak Republic ...............39.90 Bahrain ............................35.80 Chile ................................34.50 Peru .................................33.20 Thailand ...........................31.80 Kuwait .............................31.20 Turkey ..............................26.30 Kazakhstan ......................25.60 Switzerland......................22.50 Finland .............................14.80 Saudi Arabia.....................14.10 India.................................10.50 Hungary ...........................10.00 Russian Federation..........10.00 Spain..................................8.10 United Arab Emirates ........7.70 Philippines .........................5.40 Denmark............................5.00 Egypt .................................4.70 Ukraine ..............................3.00 Pakistan .............................1.50 Bangladesh........................0.00 Belgium .............................0.00 China .................................0.00 France................................0.00 Indonesia ...........................0.00 Jordan................................0.00 Nigeria ...............................0.00 Venezuela ..........................0.00 Vietnam .............................0.00 Malaysia...............................n/a
SOURCE: The World Bank, Doing Business 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24 24
HARD DATA
China ...............................58.80 Belgium ...........................57.70 Malaysia ..........................52.90 Spain................................45.80 Argentina .........................31.20 France..............................28.30 Chile ................................28.10 Indonesia .........................26.10 Peru .................................23.70 Brazil................................20.20 Vietnam ...........................13.40 Turkey ..............................12.70 Italy..................................11.80 United Arab Emirates ........6.50 Pakistan .............................4.90 Czech Republic..................4.60 Egypt .................................2.20 Slovak Republic .................1.40 Austria ...............................1.30 Jordan................................1.00 Bangladesh........................0.90 Germany............................0.70 Nigeria ...............................0.10 Australia.............................0.00 Bahrain ..............................0.00 Canada...............................0.00 Colombia ...........................0.00 Denmark............................0.00 Finland ...............................0.00 Hong Kong SAR ................0.00 Hungary .............................0.00 India...................................0.00 Ireland................................0.00 Israel..................................0.00 Japan .................................0.00 Kazakhstan ........................0.00 Korea, Rep.........................0.00 Kuwait ...............................0.00 Mexico...............................0.00 Netherlands .......................0.00 Norway ..............................0.00 Panama..............................0.00 Philippines .........................0.00 Poland................................0.00 Russian Federation............0.00 Saudi Arabia.......................0.00 Singapore ..........................0.00 South Africa.......................0.00 Sweden .............................0.00 Switzerland........................0.00 Thailand .............................0.00 Ukraine ..............................0.00 United Kingdom.................0.00 United States.....................0.00 Venezuela ..........................0.00
SOURCE: The World Bank, Doing Business 2009
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5.01
5.02
IPO market share
IPO proceeds amount
Three-year average of percentage of world IPOs (initial public offerings) issued in a given country as measured by US dollars | 2006â&#x20AC;&#x201C;08 average
Three-year average of total IPO (initial public offering) proceeds as a percentage of GDP | 2006â&#x20AC;&#x201C;08 average
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 53 n/a
HARD DATA
China ...............................19.33 United States...................16.90 Russian Federation............8.90 Brazil..................................6.57 United Kingdom.................5.66 Japan .................................3.94 Germany............................3.24 Spain..................................3.08 India...................................2.71 Hong Kong SAR ................2.65 Saudi Arabia.......................2.46 Australia.............................2.08 Italy....................................1.97 France................................1.92 United Arab Emirates ........1.46 Korea, Rep.........................1.41 Netherlands .......................1.37 Canada...............................1.30 Mexico...............................0.94 Switzerland........................0.89 Turkey ................................0.88 Singapore ..........................0.80 Austria ...............................0.78 Ireland................................0.73 Indonesia ...........................0.73 Norway ..............................0.71 Kazakhstan ........................0.66 Poland................................0.52 Sweden .............................0.50 Thailand .............................0.47 Colombia ...........................0.47 Israel..................................0.41 Belgium .............................0.40 Argentina ...........................0.37 Philippines .........................0.32 Vietnam .............................0.32 Nigeria ...............................0.28 Pakistan .............................0.26 Finland ...............................0.25 Malaysia ............................0.24 Egypt .................................0.23 South Africa.......................0.21 Ukraine ..............................0.14 Bahrain ..............................0.12 Denmark............................0.10 Jordan................................0.10 Czech Republic..................0.06 Chile ..................................0.06 Peru ...................................0.05 Hungary .............................0.03 Kuwait ...............................0.02 Slovak Republic .................0.00 Panama..............................0.00 Venezuela ..........................0.00 Bangladesh ..........................n/a
SOURCE: Thomson Financial SDC Platinum, retrieved April 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 53 53
HARD DATA
Hong Kong SAR ................2.80 United Arab Emirates ........1.57 Russian Federation............1.45 Bahrain ..............................1.42 Kazakhstan ........................1.35 Saudi Arabia.......................1.30 Jordan................................1.21 China .................................1.20 Singapore ..........................1.07 Brazil..................................1.06 Vietnam .............................0.92 Ireland................................0.63 India...................................0.55 Israel..................................0.51 Australia.............................0.50 Colombia ...........................0.49 Philippines .........................0.48 Spain..................................0.46 United Kingdom.................0.46 Austria ...............................0.45 Switzerland........................0.44 Thailand .............................0.42 Norway ..............................0.39 Netherlands .......................0.38 Egypt .................................0.38 Pakistan .............................0.38 Indonesia ...........................0.36 Nigeria ...............................0.34 Korea, Rep.........................0.31 Turkey ................................0.30 Argentina ...........................0.30 Malaysia ............................0.28 United States.....................0.27 Poland................................0.26 Sweden .............................0.24 Finland ...............................0.23 Germany............................0.21 Ukraine ..............................0.20 Italy....................................0.20 Canada...............................0.20 Mexico...............................0.20 Belgium .............................0.19 Japan .................................0.19 South Africa.......................0.16 France................................0.16 Peru ...................................0.11 Chile ..................................0.08 Czech Republic..................0.07 Denmark............................0.07 Hungary .............................0.05 Kuwait ...............................0.04 Slovak Republic .................0.01 Bangladesh........................0.00 Panama..............................0.00 Venezuela ..........................0.00
SOURCE: IPO information from Thomson Financial SDC Platinum, retrieved April 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
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5.03
5.04
Share of world IPOs
M&A market share
Three-year average of number of IPO (initial public offering) issues as a percentage of total global number of issues | 2006â&#x20AC;&#x201C;08 average
Three-year average of dollar value of M&A (mergers and acquisitions) occurring in a given country as a percentage of total global value | 2006â&#x20AC;&#x201C;08 average
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 20 22 23 24 25 25 27 28 29 30 30 32 33 34 34 34 37 37 39 40 41 42 42 44 44 44 47 47 47 50 50 50 53 53 53
HARD DATA
China ...............................12.92 United States...................11.74 Japan ...............................10.62 Australia.............................7.59 United Kingdom.................7.22 India...................................5.72 Korea, Rep.........................5.55 France................................4.40 Canada...............................2.96 Hong Kong SAR ................2.91 Brazil..................................2.70 Germany............................2.59 Malaysia ............................2.53 Poland................................2.07 Singapore ..........................1.96 Italy....................................1.75 Russian Federation............1.12 Saudi Arabia.......................1.09 Norway ..............................1.06 Belgium .............................0.95 Indonesia ...........................0.95 Sweden .............................0.75 Netherlands .......................0.72 Switzerland........................0.66 Spain..................................0.60 Thailand .............................0.60 Philippines .........................0.52 United Arab Emirates ........0.49 Israel..................................0.46 Denmark............................0.43 Ireland................................0.43 Turkey ................................0.40 Austria ...............................0.37 Jordan................................0.35 Mexico...............................0.35 Vietnam .............................0.35 Argentina ...........................0.26 Finland ...............................0.26 South Africa.......................0.23 Kazakhstan ........................0.20 Nigeria ...............................0.17 Pakistan .............................0.14 Ukraine ..............................0.14 Bahrain ..............................0.12 Czech Republic..................0.12 Egypt .................................0.12 Chile ..................................0.09 Colombia ...........................0.09 Peru ...................................0.09 Hungary .............................0.03 Kuwait ...............................0.03 Slovak Republic .................0.03 Bangladesh........................0.00 Panama..............................0.00 Venezuela ..........................0.00
SOURCE: Thomson Financial SDC Platinum, retrieved April 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
United States...................41.73 United Kingdom...............10.04 Canada...............................4.68 France................................4.32 Germany............................3.54 Netherlands .......................3.49 Australia.............................3.25 Japan .................................3.20 Italy....................................3.01 Spain..................................2.70 Switzerland........................2.11 Russian Federation............2.07 Sweden .............................1.33 Korea, Rep.........................1.22 China .................................1.21 Brazil..................................1.17 Hong Kong SAR ................1.07 India...................................0.92 Norway ..............................0.91 Mexico...............................0.85 Belgium .............................0.76 Malaysia ............................0.63 Turkey ................................0.60 Singapore ..........................0.59 South Africa.......................0.47 Denmark............................0.43 Austria ...............................0.32 Finland ...............................0.32 Ireland................................0.27 Egypt .................................0.26 Indonesia ...........................0.22 Thailand .............................0.22 Israel..................................0.19 Chile ..................................0.19 Philippines .........................0.18 Poland................................0.17 Colombia ...........................0.17 Hungary .............................0.15 Argentina ...........................0.14 United Arab Emirates ........0.13 Ukraine ..............................0.11 Czech Republic..................0.10 Kazakhstan ........................0.09 Nigeria ...............................0.09 Pakistan .............................0.07 Peru ...................................0.06 Kuwait ...............................0.06 Venezuela ..........................0.04 Panama..............................0.03 Jordan................................0.03 Vietnam .............................0.02 Slovak Republic .................0.02 Bahrain ..............................0.02 Saudi Arabia.......................0.02 Bangladesh........................0.01
SOURCE: Thomson Financial SDC Platinum, retrieved April 2009
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5.05
5.06
M&A transaction value to GDP
Share of total number of M&A deals
This variable is the rank value of the three-year average of transactions in US dollars (including the net debt of the target) as a percentage of GDP | 2006â&#x20AC;&#x201C;08 average
Three-year average of percentage of world M&A (mergers and acquisitions) deals occurring in a given country as measured by the share of total number of global M&A deals | 2006â&#x20AC;&#x201C;08 average
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Hong Kong SAR ..............16.76 Switzerland......................15.40 Netherlands .....................14.38 United Kingdom...............12.14 Australia...........................11.61 Singapore ........................11.49 Malaysia ..........................10.63 Canada.............................10.58 United States.....................9.67 Sweden .............................9.58 Norway ..............................7.36 Egypt .................................6.23 Spain..................................6.03 South Africa.......................5.44 France................................5.34 Belgium .............................5.29 Russian Federation............5.00 Jordan................................4.66 Italy....................................4.58 Denmark............................4.42 Panama..............................4.16 Finland ...............................4.14 Philippines .........................4.11 Korea, Rep.........................3.95 Bahrain ..............................3.81 Chile ..................................3.71 Israel..................................3.53 Hungary .............................3.49 Ireland................................3.47 Germany............................3.42 Turkey ................................2.99 Thailand .............................2.85 Kazakhstan ........................2.82 Brazil..................................2.81 India...................................2.77 Austria ...............................2.75 Mexico...............................2.64 Colombia ...........................2.63 Ukraine ..............................2.45 Japan .................................2.24 United Arab Emirates ........2.08 Peru ...................................1.89 Czech Republic..................1.79 Argentina ...........................1.70 Nigeria ...............................1.67 Indonesia ...........................1.59 Pakistan .............................1.55 Kuwait ...............................1.55 Poland................................1.25 China .................................1.11 Vietnam .............................1.00 Slovak Republic .................0.95 Venezuela ..........................0.56 Bangladesh........................0.36 Saudi Arabia.......................0.15
SOURCE: Thomson Financial SDC Platinum, retrieved April 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 47 49 50 51 52 53 53 55
HARD DATA
United States...................30.16 United Kingdom.................8.82 Japan .................................6.78 Canada...............................5.31 Australia.............................5.23 Germany............................4.29 France................................3.88 China .................................2.83 Spain..................................2.55 India...................................2.42 Russian Federation............2.37 Malaysia ............................2.17 Italy....................................2.02 Sweden .............................1.96 Korea, Rep.........................1.92 Netherlands .......................1.65 Brazil..................................1.55 Hong Kong SAR ................1.51 Switzerland........................1.10 Singapore ..........................1.05 Norway ..............................0.90 Finland ...............................0.79 Denmark............................0.79 Belgium .............................0.74 Poland................................0.62 Thailand .............................0.56 Ireland................................0.50 Austria ...............................0.47 South Africa.......................0.46 Mexico...............................0.43 Czech Republic..................0.41 Turkey ................................0.38 Ukraine ..............................0.34 Indonesia ...........................0.34 Argentina ...........................0.32 Israel..................................0.28 Philippines .........................0.27 Hungary .............................0.25 Chile ..................................0.21 Vietnam .............................0.19 United Arab Emirates ........0.18 Colombia ...........................0.16 Peru ...................................0.14 Egypt .................................0.11 Slovak Republic .................0.08 Nigeria ...............................0.07 Kuwait ...............................0.07 Saudi Arabia.......................0.07 Kazakhstan ........................0.06 Jordan................................0.06 Pakistan .............................0.06 Venezuela ..........................0.05 Bahrain ..............................0.04 Panama..............................0.04 Bangladesh........................0.01
SOURCE: Thomson Financial SDC Platinum, retrieved April 2009
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5.07
5.08
Insurance premiums, direct
Insurance density
Direct insurance premiums (life and non-life), including commissions and other charges, prior to cession to a reinsurance company (US$ millions) | 2007
Direct life insurance premiums (life and non-life) per capita from domestic sources (US dollars) | 2007
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 n/a n/a
HARD DATA
United States.......1,230,526.00 United Kingdom......539,468.00 Japan ......................424,755.00 France.....................272,732.00 Germany.................223,429.00 Italy.........................142,328.00 Korea, Rep..............116,384.00 Netherlands ............102,831.00 Canada....................100,148.00 China ........................92,483.00 Spain.........................74,696.00 Ireland.......................63,064.00 Australia....................62,240.00 India..........................58,725.00 Belgium ....................44,897.00 Switzerland...............43,313.00 South Africa..............42,775.00 Brazil.........................39,251.00 Sweden ....................33,874.00 Russian Federation...29,846.00 Denmark...................28,435.00 Hong Kong SAR .......24,657.00 Austria ......................21,741.00 Finland ......................20,630.00 Norway .....................19,451.00 Mexico......................17,856.00 Poland.......................15,625.00 Singapore .................14,245.00 Israel...........................8,857.00 Malaysia .....................8,512.00 Thailand ......................8,285.00 Turkey .........................8,221.00 Venezuela ...................7,172.00 Indonesia ....................6,938.00 Czech Republic...........6,548.00 Argentina ....................6,315.00 Chile ...........................6,169.00 Hungary ......................4,924.00 Colombia ....................4,103.00 United Arab Emirates .3,973.00 Ukraine .......................3,566.00 Slovak Republic ..........2,323.00 Saudi Arabia................2,291.00 Philippines ..................2,105.00 Kazakhstan .................1,202.00 Peru ............................1,187.00 Pakistan ......................1,094.00 Egypt ..........................1,090.00 Vietnam ......................1,082.00 Nigeria ...........................814.00 Kuwait ...........................701.00 Panama..........................607.00 Bangladesh....................456.00 Bahrain.................................n/a Jordan..................................n/a
SOURCE: Swiss Re, World Insurance in 2007: Emerging Markets Leading the Way
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 n/a n/a
HARD DATA
United Kingdom..........8,326.00 Ireland.........................7,262.00 Netherlands ................6,262.90 Switzerland.................5,705.50 Denmark.....................5,103.10 France.........................4,169.70 United States..............4,089.30 Belgium ......................4,022.70 Finland ........................3,923.80 Norway .......................3,768.50 Sweden ......................3,730.20 Hong Kong SAR .........3,421.80 Japan ..........................3,319.30 Canada........................3,046.20 Australia......................3,000.50 Singapore ...................2,790.90 Germany.....................2,666.60 Austria ........................2,619.70 Korea, Rep..................2,372.60 Italy.............................2,322.00 Spain...........................1,699.90 Israel...........................1,278.50 United Arab Emirates ....907.10 South Africa...................880.60 Czech Republic..............643.90 Hungary .........................489.80 Slovak Republic .............432.90 Poland............................411.00 Chile ..............................370.90 Malaysia ........................320.30 Venezuela ......................259.30 Kuwait ...........................245.80 Russian Federation........209.40 Brazil..............................204.70 Panama..........................181.50 Mexico...........................167.60 Argentina .......................159.80 Thailand .........................129.70 Turkey ............................109.80 Saudi Arabia.....................92.60 Colombia .........................88.90 Kazakhstan ......................78.00 Ukraine ............................77.20 China ...............................69.60 India.................................50.30 Peru .................................42.50 Indonesia .........................30.00 Philippines .......................23.90 Egypt ...............................14.40 Vietnam ...........................12.40 Pakistan .............................6.70 Nigeria ...............................5.50 Bangladesh........................2.90 Bahrain.................................n/a Jordan..................................n/a
SOURCE: Swiss Re, World Insurance in 2007: Emerging Markets Leading the Way
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5.09
5.10
Real growth of direct insurance premiums
Insurance penetration
Annual real rate of growth (%) of direct premiums (life and non-life) based on local currency prices | 2007
Direct domestic premiums (life and non-life) as a percentage of GDP | 2007
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 10 12 12 14 15 16 17 18 19 20 21 22 23 24 25 26 26 28 29 30 31 31 33 33 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 n/a n/a n/a n/a n/a
HARD DATA
United Arab Emirates ........0.28 Hong Kong SAR ................0.25 Venezuela ..........................0.24 United Kingdom.................0.23 Indonesia ...........................0.21 India...................................0.21 China .................................0.19 Saudi Arabia.......................0.19 Panama..............................0.17 Ireland................................0.17 Russian Federation............0.17 Singapore ..........................0.15 Ukraine ..............................0.15 Egypt .................................0.15 Chile ..................................0.15 Poland................................0.14 Mexico...............................0.14 Brazil..................................0.11 Kazakhstan ........................0.11 Korea, Rep.........................0.11 Denmark............................0.10 Pakistan .............................0.10 Vietnam .............................0.09 Colombia ...........................0.07 Sweden .............................0.06 Czech Republic..................0.06 Norway ..............................0.06 Hungary .............................0.05 Philippines .........................0.05 Israel..................................0.05 Argentina ...........................0.04 Australia.............................0.04 Slovak Republic .................0.04 Turkey ................................0.04 Belgium .............................0.04 Thailand .............................0.04 Peru ...................................0.03 Canada...............................0.02 United States.....................0.02 Spain..................................0.01 Netherlands .......................0.01 Switzerland........................0.01 Malaysia ............................0.01 Austria ...............................0.00 South Africa.......................0.00 Germany...........................-0.01 France...............................-0.02 Finland ..............................-0.02 Japan ................................-0.03 Italy...................................-0.09 Bahrain.................................n/a Bangladesh ..........................n/a Jordan..................................n/a Kuwait..................................n/a Nigeria .................................n/a
SOURCE: Swiss Re, World Insurance in 2007: Emerging Markets Leading the Way
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 32 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 n/a n/a
HARD DATA
United Kingdom.................0.18 South Africa.......................0.15 Netherlands .......................0.13 Hong Kong SAR ................0.12 Ireland................................0.12 Korea, Rep.........................0.12 France................................0.10 Switzerland........................0.10 Japan .................................0.10 Belgium .............................0.09 Denmark............................0.09 United States.....................0.09 Finland ...............................0.08 Singapore ..........................0.08 Sweden .............................0.07 Canada...............................0.07 Australia.............................0.07 Germany............................0.07 Italy....................................0.06 Austria ...............................0.06 Israel..................................0.05 Spain..................................0.05 India...................................0.05 Norway ..............................0.05 Malaysia ............................0.04 Czech Republic..................0.04 Poland................................0.04 Chile ..................................0.04 Hungary .............................0.04 Thailand .............................0.03 Venezuela ..........................0.03 Panama..............................0.03 Slovak Republic .................0.03 Brazil..................................0.03 China .................................0.03 Ukraine ..............................0.03 Argentina ...........................0.02 Russian Federation............0.02 Colombia ...........................0.02 United Arab Emirates ........0.02 Mexico...............................0.02 Indonesia ...........................0.02 Vietnam .............................0.02 Philippines .........................0.01 Kazakhstan ........................0.01 Turkey ................................0.01 Peru ...................................0.01 Egypt .................................0.01 Pakistan .............................0.01 Bangladesh........................0.01 Nigeria ...............................0.01 Saudi Arabia.......................0.01 Kuwait ...............................0.01 Bahrain.................................n/a Jordan..................................n/a
SOURCE: Swiss Re, World Insurance in 2007: Emerging Markets Leading the Way
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5.11
5.12
Relative value-added of insurance to GDP
Securitization to GDP
The value added by insurance services to the economy after costs are subtracted, as a percentage of GDP | 2008
Three-year average of the sum of asset-backed securities (ABS), mortgage-backed securities (MBS), high-yield bonds, and highly leveraged loansâ&#x20AC;&#x2122; deal value as a percentage of GDP | 2006â&#x20AC;&#x201C;08 average
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 n/a n/a n/a n/a n/a
HARD DATA
Hong Kong SAR ................3.94 Singapore ..........................3.59 Egypt .................................3.32 Switzerland........................3.22 Ireland................................3.02 Korea, Rep.........................2.59 Israel..................................2.57 United Kingdom.................2.51 United States.....................2.42 Australia.............................2.27 Japan .................................2.03 Jordan................................1.93 Netherlands .......................1.85 South Africa.......................1.79 Brazil..................................1.69 Chile ..................................1.61 Austria ...............................1.56 Ukraine ..............................1.48 Argentina ...........................1.32 Belgium .............................1.28 Poland................................1.26 Russian Federation............1.16 Turkey ................................1.10 Malaysia ............................1.09 Philippines .........................1.07 Sweden .............................1.02 India...................................1.01 Denmark............................0.98 Peru ...................................0.95 France................................0.90 Mexico...............................0.83 Hungary .............................0.76 Slovak Republic .................0.72 Saudi Arabia.......................0.72 Indonesia ...........................0.71 Germany............................0.70 Canada...............................0.69 Italy....................................0.69 Panama..............................0.64 Pakistan .............................0.64 China .................................0.59 Thailand .............................0.57 Spain..................................0.53 Bangladesh........................0.53 Colombia ...........................0.52 Finland ...............................0.50 Norway ..............................0.38 Venezuela ..........................0.27 Kuwait ...............................0.24 Czech Republic..................0.22 Bahrain.................................n/a Kazakhstan...........................n/a Nigeria .................................n/a United Arab Emirates ..........n/a Vietnam ...............................n/a
SOURCE: Global Insight, World Industry Monitor, April 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 n/a n/a
HARD DATA
United States...................16.30 United Kingdom...............10.11 Denmark............................8.54 Kazakhstan ........................8.37 Netherlands .......................8.20 Jordan................................6.52 Ireland................................6.43 Spain..................................5.50 Finland ...............................5.34 Australia.............................5.06 Ukraine ..............................4.66 Singapore ..........................3.99 Russian Federation............3.69 Belgium .............................3.68 Canada...............................3.32 Malaysia ............................2.94 Egypt .................................2.91 France................................2.80 Sweden .............................2.70 Germany............................2.67 United Arab Emirates ........2.33 Turkey ................................2.33 Bahrain ..............................2.32 South Africa.......................2.23 Chile ..................................2.23 Philippines .........................2.18 Switzerland........................2.12 Italy....................................1.98 Argentina ...........................1.81 Peru ...................................1.79 Norway ..............................1.77 Venezuela ..........................1.66 Vietnam .............................1.63 Panama..............................1.53 Indonesia ...........................1.53 Colombia ...........................1.32 Brazil..................................1.31 India...................................1.23 Hungary .............................1.14 Mexico...............................1.03 Czech Republic..................0.97 Japan .................................0.97 Kuwait ...............................0.93 Austria ...............................0.88 Nigeria ...............................0.86 Saudi Arabia.......................0.68 Thailand .............................0.48 Pakistan .............................0.33 Israel..................................0.30 Slovak Republic .................0.27 Poland................................0.23 China .................................0.17 Bangladesh........................0.12 Hong Kong SAR...................n/a Korea, Rep. ..........................n/a
Source: Dealogic Analytics, data retrieved April 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
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5.13 Share of total number of securitization deals Three-year average of the sum of asset-backed securities (ABS), mortgage-backed securities (MBS), high-yield bonds, and highly leveraged loans as a percentage of total deals | 2006â&#x20AC;&#x201C;08 average
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 20 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 41 43 44 45 46 47 48 49 50 50 52 53 54 55
HARD DATA
United States...................60.29 Russian Federation............4.55 United Kingdom.................3.27 Argentina ...........................2.58 France................................1.98 Canada...............................1.95 Germany............................1.67 India...................................1.57 Ukraine ..............................1.56 Brazil..................................1.46 Japan .................................1.32 Spain..................................1.16 Mexico...............................1.11 Italy....................................0.99 Australia.............................0.98 Kazakhstan ........................0.90 Peru ...................................0.86 Netherlands .......................0.73 Indonesia ...........................0.72 Korea, Rep.........................0.38 Turkey ................................0.38 Chile ..................................0.35 China .................................0.34 Colombia ...........................0.32 Philippines .........................0.28 Belgium .............................0.28 Singapore ..........................0.24 Switzerland........................0.23 Malaysia ............................0.22 Ireland................................0.21 Sweden .............................0.21 South Africa.......................0.19 Vietnam .............................0.16 Pakistan .............................0.16 Denmark............................0.16 Norway ..............................0.15 Hong Kong SAR ................0.15 Thailand .............................0.13 Czech Republic..................0.13 United Arab Emirates ........0.12 Finland ...............................0.11 Slovak Republic .................0.11 Nigeria ...............................0.09 Austria ...............................0.08 Saudi Arabia.......................0.07 Hungary .............................0.07 Poland................................0.07 Egypt .................................0.06 Kuwait ...............................0.06 Bahrain ..............................0.05 Bangladesh........................0.05 Venezuela ..........................0.04 Panama..............................0.03 Jordan................................0.02 Israel..................................0.02
SOURCE: Dealogic Analytics, data retrieved April 2009
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6.01
6.02
Spot foreign exchange turnover
Outright forward foreign exchange turnover
Percentage share of world total of spot foreign exchange turnover | April 2007
Percentage share of world total of outright forward foreign exchange turnover | April 2007
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
United Kingdom...............26.31 United States...................24.42 Switzerland........................8.51 Japan .................................7.91 Singapore ..........................7.00 Australia.............................3.47 Hong Kong SAR ................2.97 Russian Federation............2.67 France................................1.96 Germany............................1.92 Korea, Rep.........................1.37 Denmark............................1.18 Belgium .............................1.15 India...................................1.13 Canada...............................1.07 Italy....................................0.88 China .................................0.65 Sweden .............................0.61 Spain..................................0.48 Austria ...............................0.43 Brazil..................................0.40 Mexico...............................0.35 Ireland................................0.31 Israel..................................0.28 Norway ..............................0.27 South Africa.......................0.27 Netherlands .......................0.24 Saudi Arabia.......................0.21 Poland................................0.19 Hungary .............................0.17 Chile ..................................0.16 Indonesia ...........................0.13 Malaysia ............................0.13 Bahrain ..............................0.12 Czech Republic..................0.11 Thailand .............................0.11 Colombia ...........................0.10 Argentina ...........................0.09 Philippines .........................0.08 Turkey ................................0.06 Finland ...............................0.05 Peru ...................................0.05 Slovak Republic .................0.02 Bangladesh ..........................n/a Egypt ...................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Panama................................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Venezuela ............................n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Triennial Central Bank Survey, December 2007
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
United Kingdom...............29.22 United States...................26.73 Japan .................................6.03 Singapore ..........................5.93 Germany............................5.32 Switzerland........................3.96 Hong Kong SAR ................3.46 Australia.............................3.41 Denmark............................2.35 France................................1.76 Belgium .............................1.71 India...................................1.48 Netherlands .......................1.34 Korea, Rep.........................1.21 Canada...............................1.01 Italy....................................0.60 Norway ..............................0.57 Spain..................................0.48 Austria ...............................0.45 Sweden .............................0.37 Chile ..................................0.35 Russian Federation............0.26 South Africa.......................0.22 Czech Republic..................0.21 Ireland................................0.21 Bahrain ..............................0.17 Thailand .............................0.16 Turkey ................................0.15 Poland................................0.12 Indonesia ...........................0.12 Colombia ...........................0.11 Mexico...............................0.10 Finland ...............................0.09 Malaysia ............................0.08 Brazil..................................0.08 Peru ...................................0.05 Philippines .........................0.05 Hungary .............................0.04 Saudi Arabia.......................0.03 China .................................0.01 Argentina ...........................0.00 Slovak Republic .................0.00 Bangladesh ..........................n/a Egypt ...................................n/a Israel ....................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Panama................................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Venezuela ............................n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Triennial Central Bank Survey, December 2007
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6.03
6.04
Foreign exchange swap turnover
Interest rate derivatives turnover: Forward rate agreements
Percentage share of world total of foreign exchange swap turnover | April 2007
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
United Kingdom...............40.84 United States...................10.84 Hong Kong SAR ................5.54 Switzerland........................5.29 Singapore ..........................5.27 Japan .................................5.08 Australia.............................5.03 France................................3.96 Denmark............................2.77 Germany............................2.34 Canada...............................1.90 Sweden .............................1.49 Belgium .............................1.19 Norway ..............................1.18 Italy....................................0.99 Russian Federation............0.68 Netherlands .......................0.68 India...................................0.61 Korea, Rep.........................0.49 Austria ...............................0.47 Mexico...............................0.46 South Africa.......................0.43 Spain..................................0.36 Finland ...............................0.32 Poland................................0.27 Ireland................................0.26 Israel..................................0.20 Hungary .............................0.20 Thailand .............................0.19 Slovak Republic .................0.15 Czech Republic..................0.12 Turkey ................................0.09 Malaysia ............................0.06 Saudi Arabia.......................0.06 Philippines .........................0.05 China .................................0.04 Bahrain ..............................0.03 Indonesia ...........................0.03 Chile ..................................0.02 Colombia ...........................0.00 Brazil..................................0.00 Argentina .............................n/a Bangladesh ..........................n/a Egypt ...................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Panama................................n/a Peru .....................................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Venezuela ............................n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Triennial Central Bank Survey, December 2007
Percentage share of world total of over-the-counter single currency forward interest rate agreements turnover | April 2007
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 31 31 34 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
United Kingdom...............45.11 United States...................26.90 Germany............................7.27 France................................5.58 Sweden .............................2.58 Switzerland........................1.83 Canada...............................1.81 Norway ..............................1.56 Denmark............................1.09 Australia.............................1.05 Japan .................................1.00 Italy....................................0.74 South Africa.......................0.68 Belgium .............................0.49 Singapore ..........................0.47 Poland................................0.42 Netherlands .......................0.28 Hong Kong SAR ................0.21 Hungary .............................0.17 Austria ...............................0.16 Spain..................................0.16 Czech Republic..................0.14 Korea, Rep.........................0.13 Mexico...............................0.09 Finland ...............................0.05 Ireland................................0.03 Thailand .............................0.00 Malaysia ............................0.00 Turkey ................................0.00 Colombia ...........................0.00 Indonesia ...........................0.00 Philippines .........................0.00 Saudi Arabia.......................0.00 Chile ..................................0.00 Argentina .............................n/a Bahrain.................................n/a Bangladesh ..........................n/a Brazil ....................................n/a China....................................n/a Egypt ...................................n/a India .....................................n/a Israel ....................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Panama................................n/a Peru .....................................n/a Russian Federation ..............n/a Slovak Republic ...................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Venezuela ............................n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Triennial Central Bank Survey, December 2007
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6.05
6.06
Interest rate derivatives turnover: Swaps
Interest rate derivatives turnover: Options
Percentage share of world total of over-the-counter single currency interest rate swaps turnover | April 2007
Percentage share of world total of over-the-counter interest rate options turnover | April 2007
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
United Kingdom...............45.84 United States...................20.52 France................................8.97 Germany............................4.09 Switzerland........................3.51 Singapore ..........................3.50 Japan .................................3.17 Netherlands .......................1.64 Italy....................................1.59 Australia.............................1.15 Hong Kong SAR ................1.03 Belgium .............................1.02 Spain..................................1.00 Canada...............................0.70 Ireland................................0.45 Denmark............................0.31 Korea, Rep.........................0.29 Austria ...............................0.26 India...................................0.22 Mexico...............................0.15 Sweden .............................0.13 Finland ...............................0.13 South Africa.......................0.09 Poland................................0.08 Norway ..............................0.08 Thailand .............................0.02 Hungary .............................0.02 Czech Republic..................0.01 Bahrain ..............................0.01 Brazil..................................0.01 Malaysia ............................0.01 Saudi Arabia.......................0.01 Indonesia ...........................0.00 Turkey ................................0.00 Peru ...................................0.00 Chile ..................................0.00 Philippines .........................0.00 Colombia ...........................0.00 Argentina .............................n/a Bangladesh ..........................n/a China....................................n/a Egypt ...................................n/a Israel ....................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Panama................................n/a Russian Federation ..............n/a Slovak Republic ...................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Venezuela ............................n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Triennial Central Bank Survey, December 2007
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 29 31 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
United States...................42.38 United Kingdom...............34.08 Japan .................................8.79 France................................6.03 Belgium .............................1.52 Canada...............................1.33 Italy....................................1.00 Germany............................0.73 Singapore ..........................0.57 Sweden .............................0.55 Denmark............................0.53 Australia.............................0.49 Finland ...............................0.33 South Africa.......................0.31 Spain..................................0.25 Netherlands .......................0.22 Hong Kong SAR ................0.21 Korea, Rep.........................0.16 Thailand .............................0.15 Austria ...............................0.09 Mexico...............................0.09 Saudi Arabia.......................0.06 Ireland................................0.06 Turkey ................................0.03 Norway ..............................0.03 Switzerland........................0.02 Poland................................0.00 Czech Republic..................0.00 Indonesia ...........................0.00 Malaysia ............................0.00 Brazil..................................0.00 Argentina .............................n/a Bahrain.................................n/a Bangladesh ..........................n/a Chile.....................................n/a China....................................n/a Colombia..............................n/a Egypt ...................................n/a Hungary ...............................n/a India .....................................n/a Israel ....................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Panama................................n/a Peru .....................................n/a Philippines ...........................n/a Russian Federation ..............n/a Slovak Republic ...................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Venezuela ............................n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Triennial Central Bank Survey, December 2007
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6.07
6.08
Foreign exchange derivatives turnover: Currency swaps
Foreign exchange derivatives turnover: Options
Percentage share of world total of over-the-counter foreign exchange currency swaps turnover | April 2007
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 35 37 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
United Kingdom...............46.65 United States...................16.98 Australia.............................5.55 Canada...............................4.20 France................................3.64 Korea, Rep.........................3.15 Singapore ..........................3.05 Japan .................................2.71 Denmark............................1.92 Hong Kong SAR ................1.64 Turkey ................................1.46 India...................................1.25 Netherlands .......................1.03 Ireland................................1.03 Belgium .............................0.94 Brazil..................................0.70 Saudi Arabia.......................0.69 Austria ...............................0.49 Germany............................0.48 Spain..................................0.34 Italy....................................0.33 Indonesia ...........................0.28 Thailand .............................0.28 Switzerland........................0.20 Poland................................0.18 Norway ..............................0.14 Bahrain ..............................0.13 Finland ...............................0.12 South Africa.......................0.10 Malaysia ............................0.10 Chile ..................................0.07 Sweden .............................0.05 Philippines .........................0.04 Mexico...............................0.03 Colombia ...........................0.02 Czech Republic..................0.02 Hungary .............................0.00 Argentina .............................n/a Bangladesh ..........................n/a China....................................n/a Egypt ...................................n/a Israel ....................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Panama................................n/a Peru .....................................n/a Russian Federation ..............n/a Slovak Republic ...................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Venezuela ............................n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Triennial Central Bank Survey, December 2007
Percentage share of world total of over-the-counter foreign exchange options turnover | April 2007
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
United Kingdom...............42.39 United States...................29.95 Switzerland........................4.73 Japan .................................4.29 Singapore ..........................4.01 Hong Kong SAR ................2.28 France................................2.21 Australia.............................1.85 India...................................1.52 Canada...............................1.04 Germany............................0.99 Italy....................................0.74 Sweden .............................0.69 Belgium .............................0.60 Denmark............................0.55 Austria ...............................0.31 Spain..................................0.29 Netherlands .......................0.26 Korea, Rep.........................0.25 Ireland................................0.18 Israel..................................0.16 Poland................................0.14 Turkey ................................0.07 Bahrain ..............................0.06 Hungary .............................0.06 Mexico...............................0.05 Finland ...............................0.05 Indonesia ...........................0.05 Norway ..............................0.04 Saudi Arabia.......................0.04 South Africa.......................0.03 Czech Republic..................0.03 Slovak Republic .................0.02 Brazil..................................0.02 Thailand .............................0.01 Malaysia ............................0.01 Russian Federation............0.01 Colombia ...........................0.00 Philippines .........................0.00 Chile ..................................0.00 Argentina .............................n/a Bangladesh ..........................n/a China....................................n/a Egypt ...................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Panama................................n/a Peru .....................................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Venezuela ............................n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Triennial Central Bank Survey, December 2007
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6.09
6.10
Stock market turnover ratio
Stock market capitalization to GDP
Ratio of the value of total shares traded to average real market capitalization | 2007
This indicator is the value of listed shares as a percentage of GDP | 2007 or most recent year available
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
United Kingdom.............267.70 Italy................................218.73 United States.................214.78 Netherlands ...................206.50 Korea, Rep.....................200.51 Spain..............................188.72 China .............................180.18 Germany........................178.68 Pakistan .........................172.84 Finland ...........................170.39 Sweden .........................162.21 Saudi Arabia...................160.88 Norway ..........................146.96 Switzerland....................141.89 Japan .............................140.34 Turkey ............................134.35 France............................130.61 Singapore ......................121.32 Australia.........................109.79 Hungary .........................105.32 Denmark..........................94.60 Bangladesh......................92.09 Hong Kong SAR ..............88.62 Ireland..............................88.07 Vietnam ...........................87.80 Canada.............................84.18 India.................................83.91 United Arab Emirates ......82.50 Kuwait .............................75.82 Czech Republic................68.45 Belgium ...........................64.81 Indonesia .........................64.12 Thailand ...........................63.88 Russian Federation..........58.67 Austria .............................57.45 Brazil................................56.10 Israel................................55.11 South Africa.....................54.63 Malaysia ..........................53.21 Jordan..............................48.89 Poland..............................47.23 Egypt ...............................45.42 Philippines .......................33.95 Mexico.............................30.78 Nigeria .............................28.17 Chile ................................22.82 Kazakhstan ......................20.75 Colombia .........................13.04 Venezuela ..........................9.98 Argentina ...........................9.85 Peru ...................................8.75 Bahrain ..............................6.57 Ukraine ..............................2.61 Panama..............................1.96 Slovak Republic .................0.48
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Hong Kong SAR ............500.53 Switzerland....................301.54 South Africa...................280.78 Jordan............................225.16 Singapore ......................196.29 Malaysia ........................155.99 Canada...........................147.36 Australia.........................146.63 United States.................143.65 United Kingdom.............141.38 Sweden .........................134.39 China .............................131.84 Finland ...........................129.61 Kuwait2 ..........................128.34 Israel..............................127.22 United Arab Emirates1 ...122.99 Bahrain1 .........................120.04 Chile ..............................118.92 Netherlands ...................115.80 India...............................112.72 Saudi Arabia...................110.71 Spain..............................109.82 Japan .............................105.78 France............................102.16 Korea, Rep.....................101.52 Russian Federation..........99.62 Egypt ...............................91.24 Belgium ...........................87.96 Norway ............................84.07 Denmark..........................83.09 Brazil................................79.35 Peru .................................76.11 Thailand ...........................68.91 Ireland..............................60.84 Philippines .......................59.78 Germany..........................57.09 Austria .............................56.05 Ukraine ............................55.00 Italy..................................50.19 Colombia .........................46.10 Poland..............................42.60 Mexico.............................42.04 Kazakhstan ......................41.31 Indonesia .........................40.66 Pakistan ...........................40.47 Czech Republic................36.44 Nigeria .............................35.94 Turkey ..............................34.26 Hungary ...........................32.64 Argentina .........................31.95 Panama............................30.45 Vietnam ...........................20.12 Slovak Republic .................8.42 Bangladesh........................7.70 Venezuela2 .........................3.67
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008 1
2005
2
2006
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6.11
6.12
Stock market value traded to GDP
Number of listed companies per 10,000 people
Total value of shares traded on stock market exchanges as a percentage of GDP | 2007 or most recent year available
Number of publicly listed companies per 10,000 people | 2007
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Hong Kong SAR ............443.57 Switzerland....................427.85 United Kingdom.............378.49 United States.................308.54 Netherlands ...................239.12 Singapore ......................238.14 China .............................237.55 Finland ...........................220.85 Sweden .........................217.99 Spain..............................207.25 Korea, Rep.....................203.55 Saudi Arabia...................178.12 Australia.........................160.98 South Africa...................153.38 Japan .............................148.45 France............................133.43 Canada...........................124.06 Norway ..........................123.55 United Arab Emirates1 ...110.35 Jordan............................110.08 Italy................................109.77 Germany........................102.00 India.................................94.58 Malaysia ..........................83.01 Denmark..........................78.60 Israel................................70.11 Pakistan ...........................69.95 Russian Federation..........58.45 Belgium ...........................57.00 Kuwait2 ............................54.74 Ireland..............................53.58 Turkey ..............................46.02 Brazil................................44.51 Thailand ...........................44.02 Egypt ...............................41.44 Hungary ...........................34.37 Austria .............................32.21 Chile ................................27.13 Indonesia .........................26.07 Czech Republic................24.94 Philippines .......................20.30 Poland..............................20.12 Vietnam ...........................17.67 Mexico.............................12.94 Nigeria .............................10.12 Kazakhstan ........................8.57 Bangladesh........................7.09 Peru ...................................6.66 Colombia ...........................6.01 Bahrain1 .............................5.51 Argentina ...........................3.15 Ukraine ..............................1.44 Panama..............................0.60 Venezuela2 .........................0.37 Slovak Republic .................0.04
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14 597–605. Updated November 2008 1
2005
2
2006
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Hong Kong SAR ................1.49 Canada...............................1.18 Singapore ..........................1.03 Israel..................................0.91 Australia.............................0.91 Spain..................................0.78 Kuwait ...............................0.68 Bahrain ..............................0.57 Jordan................................0.43 United Kingdom.................0.42 Malaysia ............................0.39 Korea, Rep.........................0.36 Switzerland........................0.34 Japan .................................0.30 Sweden .............................0.30 Slovak Republic .................0.28 United Arab Emirates ........0.21 United States.....................0.17 Chile ..................................0.14 France................................0.11 South Africa.......................0.09 Poland................................0.09 Germany............................0.08 Thailand .............................0.07 Peru ...................................0.07 Panama..............................0.07 Ukraine ..............................0.06 Kazakhstan ........................0.06 Egypt .................................0.06 Italy....................................0.05 Saudi Arabia.......................0.05 India...................................0.04 Turkey ................................0.04 Hungary .............................0.04 Pakistan .............................0.04 Czech Republic..................0.03 Philippines .........................0.03 Argentina ...........................0.03 Russian Federation............0.02 Brazil..................................0.02 Venezuela ..........................0.02 Colombia ...........................0.02 Bangladesh........................0.02 Indonesia ...........................0.02 Nigeria ...............................0.01 Vietnam .............................0.01 Mexico...............................0.01 China .................................0.01 Austria .................................n/a Belgium ...............................n/a Denmark ..............................n/a Finland .................................n/a Ireland..................................n/a Netherlands .........................n/a Norway ................................n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated May 2009
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6.14
Private domestic bond market capitalization to GDP
Public domestic bond market capitalization to GDP
Domestic debt securities issued by financial institutions and corporations as a share of GDP | 2008
Domestic debt securities issued by government as a share of GDP | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Denmark........................202.67 Malaysia ..........................98.04 Italy..................................85.71 Australia...........................81.33 Netherlands .....................80.16 Korea, Rep.......................73.15 Sweden ...........................70.14 Switzerland......................44.76 Finland .............................38.36 Ireland..............................35.88 Norway ............................31.01 Canada.............................29.96 China ...............................26.58 Singapore ........................23.03 Hong Kong SAR ..............22.87 United Kingdom...............22.15 Brazil................................20.03 South Africa.....................19.17 Chile ................................18.73 Mexico.............................15.37 Czech Republic................13.11 Hungary .............................7.93 Slovak Republic .................6.16 Peru ...................................4.21 Argentina ...........................4.10 India...................................3.99 Indonesia ...........................2.23 Philippines .........................1.64 Venezuela ..........................1.02 Colombia ...........................0.36 Turkey ................................0.07 Austria .................................n/a Bahrain.................................n/a Bangladesh ..........................n/a Belgium ...............................n/a Egypt ...................................n/a France..................................n/a Germany ..............................n/a Israel ....................................n/a Japan ...................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Panama................................n/a Poland..................................n/a Russian Federation ..............n/a Saudi Arabia.........................n/a Spain....................................n/a Thailand ...............................n/a Ukraine ................................n/a United Arab Emirates ..........n/a United States.......................n/a Vietnam ...............................n/a
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 Database (April 2009)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Japan .............................198.55 France..............................82.60 United States...................66.08 Germany..........................60.39 Singapore ........................55.32 India.................................54.95 Czech Republic................53.24 Netherlands .....................52.25 Canada.............................51.13 Hungary ...........................50.30 China ...............................49.01 Finland .............................48.75 Thailand ...........................48.41 Korea, Rep.......................47.69 United Kingdom...............46.66 Venezuela ........................46.07 Brazil................................44.75 Philippines .......................44.10 Austria .............................42.47 Poland..............................39.99 Malaysia ..........................39.65 Spain................................36.53 Sweden ...........................35.93 Slovak Republic ...............33.62 Pakistan ...........................29.13 Ireland..............................28.50 Denmark..........................24.61 Colombia .........................22.79 Argentina .........................19.68 Mexico.............................19.56 Norway ............................18.72 Peru .................................17.74 Indonesia .........................16.46 Australia...........................14.83 Hong Kong SAR ..............11.96 Chile ................................10.51 Russian Federation............3.03 Bahrain.................................n/a Bangladesh ..........................n/a Belgium ...............................n/a Egypt ...................................n/a Israel ....................................n/a Italy ......................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Panama................................n/a Saudi Arabia.........................n/a South Africa .........................n/a Switzerland ..........................n/a Turkey ..................................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Vietnam ...............................n/a
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 Database (April 2009)
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6.16
Private international bonds to GDP
Public international bonds to GDP
International debt securities issued by financial institutions and corporations as a share of GDP | 2008
International debt securities issued by government as a share of GDP | 2008
RANK COUNTRY/ECONOMY
[D3H]RANK
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Ireland............................279.13 Spain..............................171.71 Netherlands ...................151.09 United Kingdom.............131.63 Switzerland....................130.16 Belgium .........................125.16 United States.................122.67 Germany........................118.06 France............................102.11 Austria .............................93.20 Sweden ...........................77.95 Australia...........................61.31 Italy..................................60.48 Norway ............................54.02 Hong Kong SAR ..............50.39 Denmark..........................47.26 Singapore ........................40.65 Finland .............................32.53 Canada.............................27.38 Thailand ...........................25.69 Malaysia ..........................24.21 Japan ...............................21.33 Korea, Rep.......................13.30 South Africa.....................12.83 Hungary ...........................10.91 Philippines .......................10.03 Panama..............................7.23 Russian Federation............7.17 Israel..................................6.19 Chile ..................................5.48 Mexico...............................5.12 Brazil..................................4.65 India...................................3.84 Venezuela ..........................3.49 Indonesia ...........................3.43 Peru ...................................2.39 Argentina ...........................2.37 Turkey ................................1.80 Colombia ...........................1.51 China .................................1.40 Slovak Republic .................0.84 Poland................................0.59 Bahrain.................................n/a Bangladesh ..........................n/a Czech Republic ....................n/a Egypt ...................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Pakistan ...............................n/a Saudi Arabia.........................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Quarterly Review March 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
COUNTRY/ECONOMY
HARD DATA
Panama............................46.89 Austria .............................39.45 Belgium ...........................36.80 Finland .............................32.70 Ireland..............................27.89 Philippines .......................24.09 Hungary ...........................17.86 Argentina .........................17.27 Italy..................................15.01 Germany..........................12.68 Spain................................11.51 Poland................................9.21 Peru ...................................8.61 Venezuela ..........................8.13 Colombia ...........................7.16 Slovak Republic .................7.03 Turkey ................................6.25 Canada...............................6.07 Sweden .............................6.01 Denmark............................5.53 Israel..................................4.91 Mexico...............................4.04 South Africa.......................3.64 Brazil..................................3.64 Malaysia ............................3.09 France................................2.81 Indonesia ...........................2.46 Netherlands .......................2.42 Thailand .............................2.15 Russian Federation............1.87 Chile ..................................1.81 Australia.............................1.71 Hong Kong SAR ................1.26 Korea, Rep.........................0.75 United Kingdom.................0.54 Switzerland........................0.37 Singapore ..........................0.24 China .................................0.17 Japan .................................0.15 United States.....................0.08 Bahrain.................................n/a Bangladesh ..........................n/a Czech Republic ....................n/a Egypt ...................................n/a India .....................................n/a Jordan..................................n/a Kazakhstan...........................n/a Kuwait..................................n/a Nigeria .................................n/a Norway ................................n/a Pakistan ...............................n/a Saudi Arabia.........................n/a Ukraine ................................n/a United Arab Emirates ..........n/a Vietnam ...............................n/a
SOURCE: Bank of International Settlements, Quarterly Review March 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
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7.01
7.02
Financial market sophistication
Venture capital availability
The level of sophistication of financial markets in your country is (1 = lower than international norms; 7 = higher than international norms)
In your country, how difficult is it for entrepreneurs with innovative but risky projects to find venture capital? (1 = impossible; 7 = very easy)
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 5.08
7
Switzerland .....................6.62 Canada ............................6.45 Sweden...........................6.44 Hong Kong SAR ..............6.42 South Africa ....................6.32 United Kingdom ..............6.28 Singapore ........................6.24 Netherlands.....................6.24 France .............................6.22 United States ..................6.22 Australia ..........................6.20 Brazil ...............................6.05 Finland.............................6.01 Denmark .........................6.00 Norway............................6.00 Germany .........................5.98 Austria.............................5.95 Belgium...........................5.93 Chile ................................5.86 Israel ...............................5.69 Spain ...............................5.64 Panama ...........................5.64 Bahrain ............................5.52 Ireland .............................5.47 United Arab Emirates......5.43 Malaysia ..........................5.38 India ................................5.31 Thailand...........................5.14 Turkey..............................4.98 Slovak Republic...............4.97 Japan...............................4.88 Czech Republic ...............4.80 Jordan .............................4.78 Peru.................................4.66 Saudi Arabia ....................4.61 Mexico ............................4.55 Kuwait .............................4.52 Indonesia.........................4.50 Korea, Rep. .....................4.49 Hungary...........................4.34 Colombia .........................4.32 Italy .................................4.25 Poland .............................4.23 Philippines.......................4.20 Nigeria.............................4.13 China ...............................3.98 Pakistan...........................3.97 Egypt...............................3.78 Venezuela........................3.70 Russian Federation .........3.59 Kazakhstan ......................3.50 Argentina.........................3.45 Vietnam ...........................3.41 Ukraine............................3.37 Bangladesh .....................2.88
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 3.26
7
Hong Kong SAR ..............4.61 Norway............................4.42 Singapore ........................4.33 Sweden...........................4.29 Finland.............................4.27 United States ..................4.17 Netherlands.....................4.10 Australia ..........................3.97 Bahrain ............................3.89 Malaysia ..........................3.88 United Arab Emirates......3.88 Israel ...............................3.86 Indonesia.........................3.84 Panama ...........................3.80 Denmark .........................3.78 Canada ............................3.77 India ................................3.62 Switzerland .....................3.59 United Kingdom ..............3.51 Saudi Arabia ....................3.51 Belgium...........................3.48 Chile ................................3.47 France .............................3.46 Kuwait .............................3.39 South Africa ....................3.37 Egypt...............................3.37 Austria.............................3.25 China ...............................3.22 Ireland .............................3.21 Slovak Republic...............3.19 Poland .............................3.13 Jordan .............................3.10 Spain ...............................3.09 Thailand...........................3.05 Vietnam ...........................3.04 Peru.................................3.02 Germany .........................3.01 Japan...............................2.97 Czech Republic ...............2.92 Kazakhstan ......................2.86 Korea, Rep. .....................2.78 Pakistan...........................2.76 Brazil ...............................2.73 Colombia .........................2.63 Russian Federation .........2.52 Philippines.......................2.50 Ukraine............................2.48 Hungary...........................2.41 Nigeria.............................2.41 Mexico ............................2.39 Italy .................................2.28 Turkey..............................2.27 Venezuela........................2.23 Argentina.........................2.13 Bangladesh .....................2.02
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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7.03
7.04
Ease of access to credit
Financing through local equity market
During the past year, obtaining credit for your company has become (1 = more difficult; 7 = easier)
Raising money by issuing shares on the stock market in your country is (1 = impossible; 7 = very easy)
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 3.54
7
Panama ...........................5.16 Brazil ...............................4.98 Bahrain ............................4.62 Egypt...............................4.60 Peru.................................4.59 Slovak Republic...............4.58 Czech Republic ...............4.45 Indonesia.........................4.41 Malaysia ..........................4.25 Saudi Arabia ....................4.23 Jordan .............................4.16 United Arab Emirates......4.14 Vietnam ...........................4.09 India ................................4.04 Philippines.......................4.02 Korea, Rep. .....................4.02 China ...............................3.97 Thailand...........................3.93 Chile ................................3.93 Colombia .........................3.88 Singapore ........................3.79 Finland.............................3.73 Bangladesh .....................3.70 Nigeria.............................3.63 Japan...............................3.61 Turkey..............................3.57 Poland .............................3.52 Pakistan...........................3.51 Kuwait .............................3.49 Switzerland .....................3.45 Hong Kong SAR ..............3.45 Mexico ............................3.44 Israel ...............................3.43 Venezuela........................3.41 Italy .................................3.25 Russian Federation .........3.19 South Africa ....................3.01 France .............................2.97 Norway............................2.96 Hungary...........................2.95 Ukraine............................2.90 Canada ............................2.89 Denmark .........................2.89 Sweden...........................2.88 Belgium...........................2.87 Kazakhstan ......................2.87 Australia ..........................2.86 Austria.............................2.83 United States ..................2.75 Netherlands.....................2.71 Argentina.........................2.69 Germany .........................2.57 Spain ...............................2.49 Ireland .............................2.26 United Kingdom ..............1.94
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
1 2 3 4 5 6 7 8 9 10 11 2 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 4.18
7
Hong Kong SAR ................5.31 India...................................5.04 South Africa.......................4.93 Jordan................................4.87 France................................4.79 Singapore ..........................4.76 United Arab Emirates ........4.75 Vietnam .............................4.75 Indonesia ...........................4.71 Chile ..................................4.71 Malaysia ............................4.70 Canada...............................4.69 Sweden .............................4.68 Saudi Arabia.......................4.64 Egypt .................................4.63 Nigeria ...............................4.63 Switzerland........................4.62 Australia.............................4.60 Norway ..............................4.58 Japan .................................4.55 Panama..............................4.52 Thailand .............................4.50 Bangladesh........................4.47 United States.....................4.38 Finland ...............................4.38 Czech Republic..................4.37 Korea, Rep.........................4.34 Israel..................................4.30 Austria ...............................4.29 Brazil..................................4.24 Pakistan .............................4.22 Netherlands .......................4.22 United Kingdom.................4.19 Belgium .............................4.17 Philippines .........................4.10 Kuwait ...............................4.09 Denmark............................4.09 Germany............................4.02 Poland................................4.00 Bahrain ..............................3.90 Turkey ................................3.89 China .................................3.89 Peru ...................................3.87 Spain..................................3.80 Italy....................................3.69 Colombia ...........................3.64 Ireland................................3.43 Mexico...............................3.31 Slovak Republic .................3.15 Russian Federation............3.08 Kazakhstan ........................3.07 Hungary .............................3.02 Ukraine ..............................2.80 Venezuela ..........................2.71 Argentina ...........................2.66
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
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7.05
7.06
Ease of access to loans
Foreign direct investment to GDP
How easy is it to obtain a bank loan in your country with only a good business plan and no collateral? (1 = impossible; 7 = very easy)
Comprised of equity capital, reinvested earnings, and intra-company loans | 2007
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
SCORE
1
MEAN: 3.44
7
Finland.............................4.73 Bahrain ............................4.73 Singapore ........................4.62 Norway............................4.60 United Arab Emirates......4.49 Hong Kong SAR ..............4.45 Australia ..........................4.40 Sweden...........................4.37 Denmark .........................4.34 Malaysia ..........................4.34 Panama ...........................4.28 Netherlands.....................4.23 Saudi Arabia ....................4.18 Indonesia.........................3.99 Slovak Republic...............3.97 Belgium...........................3.95 Canada ............................3.92 Chile ................................3.87 Kuwait .............................3.78 South Africa ....................3.73 Switzerland .....................3.68 United States ..................3.66 India ................................3.60 Thailand...........................3.59 Czech Republic ...............3.54 Austria.............................3.51 France .............................3.47 Peru.................................3.40 Egypt...............................3.35 Jordan .............................3.35 United Kingdom ..............3.25 Pakistan...........................3.18 Japan...............................3.18 Israel ...............................3.13 Colombia .........................3.08 Poland .............................3.06 Brazil ...............................3.04 Ireland .............................2.99 Germany .........................2.99 Vietnam ...........................2.93 Spain ...............................2.89 Turkey..............................2.82 Hungary...........................2.77 Korea, Rep. .....................2.77 Mexico ............................2.70 Kazakhstan ......................2.68 Ukraine............................2.68 Philippines.......................2.67 China ...............................2.67 Russian Federation .........2.56 Bangladesh .....................2.37 Venezuela........................2.37 Italy .................................2.25 Nigeria.............................2.10 Argentina.........................2.01
SOURCE: World Economic Forum, Executive Opinion Survey 2008, 2009
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55
HARD DATA
Hong Kong SAR ..............28.93 Singapore ........................14.46 Netherlands .....................12.79 Ireland..............................11.71 Jordan..............................11.10 Kazakhstan ........................9.78 Bahrain ..............................9.52 Vietnam .............................9.47 Switzerland........................9.46 Panama..............................9.37 Egypt .................................8.88 Belgium .............................8.85 Chile ..................................8.82 Austria ...............................8.26 United Kingdom.................7.99 Canada...............................7.57 Nigeria ...............................7.44 United Arab Emirates ........7.36 Ukraine ..............................6.91 Saudi Arabia.......................6.37 Israel..................................6.09 France................................6.09 Czech Republic..................5.24 Peru ...................................4.97 Sweden .............................4.62 Malaysia ............................4.50 Slovak Republic .................4.34 Colombia ...........................4.34 Poland................................4.14 Russian Federation............4.05 Hungary .............................4.02 Thailand .............................3.89 Spain..................................3.71 Pakistan .............................3.70 Denmark............................3.61 Finland ...............................3.44 Turkey ................................3.39 Brazil..................................2.59 China .................................2.47 Australia.............................2.45 Mexico...............................2.41 Argentina ...........................2.20 India...................................2.08 Philippines .........................2.03 South Africa.......................2.01 Italy....................................1.90 United States.....................1.69 Indonesia ...........................1.60 Germany............................1.53 Bangladesh........................0.90 Japan .................................0.51 Venezuela ..........................0.28 Norway ..............................0.15 Kuwait ...............................0.11 Korea, Rep.........................0.01
SOURCE: United Nations Conference on Trade and Development, 2008; GDP data from IMF, World Economic Outlook Database (April 2009)
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7.07
7.08
Market penetration of bank accounts
Commercial bank branches
Number of commercial bank accounts per 100,000 adults | 2008 or most recent year available
Number of commercial bank branches per 100,000 adults | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Ukraine ...................375,499.30 Belgium ..................372,457.00 Denmark1 ................270,610.00 Austria ....................244,180.80 Singapore ...............230,508.80 Israel.......................225,362.10 Malaysia .................222,673.90 Russian Federation1189,220.00 Turkey .....................185,115.00 France1 ...................180,080.00 Netherlands ............177,209.40 United States..........176,077.50 Czech Republic.......167,955.30 Norway1 ..................161,080.00 Hungary ..................157,082.20 Poland.....................152,738.70 Thailand ..................149,800.90 Colombia ................115,135.30 Mexico....................101,362.80 Argentina ..................87,527.40 Jordan.......................81,422.97 South Africa..............78,812.95 Italy...........................76,320.49 Panama.....................75,717.04 Chile .........................74,632.10 Spain.........................74,140.12 Peru ..........................71,642.69 India..........................68,047.05 Brazil1 ........................63,980.00 Venezuela .................51,840.05 Philippines ................51,694.37 Indonesia ..................48,425.49 Bangladesh...............31,868.15 Pakistan ....................22,607.03 Nigeria1 .....................18,500.00 Vietnam1 .....................8,300.00 Australia...............................n/a Bahrain.................................n/a Canada.................................n/a China....................................n/a Egypt ...................................n/a Finland .................................n/a Germany ..............................n/a Hong Kong SAR...................n/a Ireland..................................n/a Japan ...................................n/a Kazakhstan...........................n/a Korea, Rep. ..........................n/a Kuwait..................................n/a Saudi Arabia.........................n/a Slovak Republic ...................n/a Sweden ...............................n/a Switzerland ..........................n/a United Arab Emirates ..........n/a United Kingdom...................n/a
SOURCE: CGAP. 2009. “Financial Access 2009” (forthcoming), Washington, DC: CGAP 2009. Full results to be released by CGAP in October 2009. 1
2007
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Italy..................................52.96 Belgium ...........................50.02 Denmark..........................46.66 Spain................................40.47 United States...................35.43 Norway ............................34.97 Ireland..............................34.05 Poland..............................32.58 Australia...........................31.75 Netherlands .....................26.15 Slovak Republic ...............25.66 Hong Kong SAR ..............24.37 Canada.............................23.72 France..............................23.01 Sweden ...........................22.79 Czech Republic................22.40 Kazakhstan ......................21.57 Israel................................19.80 Panama............................18.89 Venezuela ........................18.50 Finland .............................18.46 Turkey ..............................17.32 Hungary ...........................17.14 Germany..........................16.33 Jordan..............................16.17 Kuwait .............................15.11 Chile ................................14.95 Mexico.............................13.97 Colombia .........................13.75 Argentina .........................13.32 Korea, Rep.......................12.59 Japan ...............................12.52 Brazil................................12.19 Malaysia ..........................11.57 Singapore ........................10.97 Thailand ...........................10.92 Philippines .......................10.53 India...................................9.27 South Africa.......................8.03 Pakistan .............................7.50 Peru ...................................7.48 Indonesia ...........................6.67 Bangladesh........................5.21 Vietnam .............................3.29 Ukraine ..............................3.28 Russian Federation............2.86 Austria .................................n/a Bahrain.................................n/a China....................................n/a Egypt ...................................n/a Nigeria .................................n/a Saudi Arabia.........................n/a Switzerland ..........................n/a United Arab Emirates ..........n/a United Kingdom...................n/a
SOURCE: CGAP. 2009. “Financial Access 2009” (forthcoming), Washington, DC: CGAP 2009. Full results to be released by CGAP in October 2009.
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7.09
7.10
Total number of ATMs
Total number of point of sale (POS) devices
Total number of ATMs per 100,000 adults | 2008
Total number of POSs per 100,000 adults | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Canada...........................202.78 United States.................169.23 Australia.........................159.30 Spain..............................157.10 United Kingdom.............127.07 Austria ...........................118.37 Brazil..............................110.19 France............................102.55 Italy..................................93.93 Switzerland......................93.70 Belgium ...........................85.96 Germany..........................79.74 Denmark..........................70.42 Ukraine ............................70.09 Russian Federation..........65.60 Thailand ...........................65.48 Netherlands .....................63.78 Norway ............................59.73 Chile ................................55.56 South Africa.....................54.85 Hungary ...........................54.24 Kazakhstan ......................52.80 Singapore ........................50.64 Kuwait .............................50.05 Slovak Republic ...............47.76 Israel................................47.38 Malaysia ..........................43.25 Poland..............................42.16 Turkey ..............................40.99 Mexico.............................40.15 Finland .............................38.74 Czech Republic................38.40 Sweden ...........................36.94 Panama............................36.94 Argentina .........................33.04 Venezuela ........................27.99 Colombia .........................26.31 Peru .................................17.67 Indonesia .........................13.44 Philippines .......................13.33 India...................................3.55 Pakistan .............................3.39 Bahrain.................................n/a Bangladesh ..........................n/a China....................................n/a Egypt ...................................n/a Hong Kong SAR...................n/a Ireland..................................n/a Japan ...................................n/a Jordan..................................n/a Korea, Rep. ..........................n/a Nigeria .................................n/a Saudi Arabia.........................n/a United Arab Emirates ..........n/a Vietnam ...............................n/a
SOURCE: CGAP. 2009. “Financial Access 2009” (forthcoming), Washington, DC: CGAP 2009. Full results to be released by CGAP in October 2009.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Austria ........................4,889.60 Australia......................3,938.82 Panama.......................3,915.87 Pakistan ......................2,285.55 Canada........................2,201.64 Switzerland.................2,182.73 Denmark.....................2,022.78 Thailand ......................2,003.94 Brazil...........................1,471.05 Malaysia .....................1,412.90 Singapore ...................1,397.77 Japan ..........................1,353.14 Turkey .........................1,101.47 Belgium ......................1,086.15 Netherlands ................1,030.37 Spain..............................959.25 Hong Kong SAR ............880.32 Korea, Rep.....................673.75 Czech Republic..............651.08 Israel..............................584.69 Hungary .........................485.83 Slovak Republic .............460.31 Chile ..............................450.13 Poland............................426.52 Vietnam .........................292.60 France............................249.59 Norway ..........................216.58 Kazakhstan ....................173.23 United States.................171.85 India.................................77.81 Germany..........................65.78 Philippines .......................47.06 Ukraine ............................10.75 Venezuela ..........................3.03 Mexico...............................1.85 South Africa.......................1.03 Argentina .............................n/a Bahrain.................................n/a Bangladesh ..........................n/a China....................................n/a Colombia..............................n/a Egypt ...................................n/a Finland .................................n/a Indonesia .............................n/a Ireland..................................n/a Italy ......................................n/a Jordan..................................n/a Kuwait..................................n/a Nigeria .................................n/a Peru .....................................n/a Russian Federation ..............n/a Saudi Arabia.........................n/a Sweden ...............................n/a United Arab Emirates ..........n/a United Kingdom...................n/a
SOURCE: CGAP. 2009. “Financial Access 2009” (forthcoming), Washington, DC: CGAP 2009. Full results to be released by CGAP in October 2009.
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7.11 MFI borrowersâ&#x20AC;&#x2122; penetration rate Total number of borrowers from microfinance institutions as a percentage of countryâ&#x20AC;&#x2122;s poor population | 2007
RANK COUNTRY/ECONOMY
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
HARD DATA
Bangladesh......................41.22 Vietnam ...........................29.03 Mexico.............................20.96 Indonesia .........................19.66 Peru .................................17.60 Chile ................................15.34 Jordan..............................12.45 Philippines .......................11.03 Malaysia ............................7.77 Egypt .................................7.16 Colombia ...........................6.46 India...................................4.80 South Africa.......................4.10 Kazakhstan ........................3.37 Nigeria ...............................3.00 Pakistan .............................2.61 Brazil..................................1.62 Panama..............................1.56 Argentina ...........................0.81 Ukraine ..............................0.64 Venezuela ..........................0.62 Russian Federation............0.54 Poland................................0.25 China .................................0.19 Korea, Rep.........................0.07 Thailand .............................0.06 Turkey ................................0.03 Australia...............................n/a Austria .................................n/a Bahrain.................................n/a Belgium ...............................n/a Canada.................................n/a Czech Republic ....................n/a Denmark ..............................n/a Finland .................................n/a France..................................n/a Germany ..............................n/a Hong Kong SAR...................n/a Hungary ...............................n/a Ireland..................................n/a Israel ....................................n/a Italy ......................................n/a Japan ...................................n/a Kuwait..................................n/a Netherlands .........................n/a Norway ................................n/a Saudi Arabia.........................n/a Singapore.............................n/a Slovak Republic ...................n/a Spain....................................n/a Sweden ...............................n/a Switzerland ..........................n/a United Arab Emirates ..........n/a United Kingdom...................n/a United States.......................n/a
SOURCE: Microfinance Information Exchange, Inc. (MIX). September 2007
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Technical Notes and Sources
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Technical Notes and Sources
The following section complements the Data Tables by providing additional information and definitions for the hard data indicators that enter the composition of the Financial Development Index 2009. In the following pages, the number next to the variable corresponds to the number of the Data Table that shows the ranks and scores for all countries on this particular indicator. The data used in this Report represent the best available estimates from various international agencies, private sources, and national authorities at the time the Report was prepared. It is possible that some data will have been updated or revised after publication.
Section I: Institutional environment
1.03 Domestic financial sector liberalization This index measures the degree of domestic financial sector liberalization within a country, standardized on a 1–7 scale | 2009 or most recent year available This index was calculated on the basis of whether or not controls (ceilings and floors) on interest rates and credit exist, and whether or not deposits in foreign currency are allowed. Schmukler and Kaminsky updated their results up to 2005 for a subset of the sample countries. The World Economic Forum used their methodology to update all of the countries for the purposes of the calculations in this Report. National sources, central banks, and IMF reports were the main sources of these updates. The World Economic Forum then created an interaction term among these data, the Legal and regulatory issues subpillar, and the Bond market development subpillar of the Financial Development Index, and standardized the scores on a scale from 1 to 7. Source: Graciela Kaminsky and Sergio Schmukler, 2003. “ShortRun Pain, Long-Run Gain: The Effects of Financial Liberalization.” IMF Working Paper 03/34 Washington, DC: International Monetary Fund; updated as of 2009 based on World Economic Forum analysis
1.01 Capital account liberalization This index measures the degree of capital account liberalization within a country, standardized on a 1–7 scale | 2007 This variable measures specifically the level of capital controls based on information from the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER). The World Economic Forum then created an interaction term among these data, the Legal and regulatory issues subpillar, and the Bond market development subpillar of the Financial Development Index, and standardized the scores on a scale from 1 to 7. Source: Menzie Chinn and Hiro Ito. 2009. “Financial Openness Index.” Dataset available at http://www.ssc.wisc.edu/~mchinn/ research.html; interaction results from World Economic Forum analysis
1.02 Commitments to WTO agreement on trade in services 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 1–7 (most liberalized) scale | 2008 Each entry is assigned a standardized score on a 0–100 (most liberalized) scale based on its relative restrictiveness. This is done using a criteria set out by Bernard Hoekman’s methodology. The World Economic Forum then created an interaction term among these data, the Legal and regulatory issues subpillar, and the Bond market development subpillar of this Financial Development Index, and standardized the scores on a scale from 1 to 7. Source: The World Bank, World Trade Indicators 2008
351 1.11 Official supervisory power This index measures the extent to which official supervisory authorities have the authority to take specific actions to prevent and correct problems | 2006 Possible actions include restructuring power, declaring insolvency power, and prompt corrective power that force automatic enforcement actions such as intervention. Source: James Barth, Gerard Caprio, and Ross Levine. 2007. “Bank Regulations Are Changing: But for Better or Worse?” World Bank Discussion Paper No. 4646, Washington, DC
1.12 Private monitoring of the banking industry This index measures the degree to which the private sector monitors the banking industry (higher percentage values indicate greater transparency) | 2006 Indicators included in assessment of private monitoring include the requirement of certified auditing, percentage of 10 biggest banks rated by international rating agencies, and bank accounting. Source: James Barth, Gerard Caprio, and Ross Levine. 2007. “Bank Regulations Are Changing: But for Better or Worse?” World Bank Discussion Paper No. 4646, Washington, DC
1.20 Corruption perceptions index This is a composite index measuring the perceived levels of corruption in a given country as determined by expert assessments and opinion surveys. Higher scores indicate less extensive corruption | 2008 The index measures the overall extent of corruption (frequency and/or size of bribes) in the public and political sectors as calculated based on data from 13 sources originating from 11 independent institutions. All sources provide a ranking of countries. Source: Transparency International, Corruption Perceptions Index 2008
Technical Notes and Sources
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1.21 Strength of legal rights index This index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. The index ranges from 0 to 10, with higher scores indicating that collateral and bankruptcy laws are better designed to expand access to credit | 2008 The index includes eight aspects related to legal rights in collateral law and two aspects in bankruptcy law. Source: The World Bank, Doing Business 2009
1.25 Time to enforce a contract Time in days to resolve a dispute related to a contract | 2008 Time is counted from the moment the plaintiff files the lawsuit in court until payment. This includes both the days when actions take place and the waiting periods between. The respondents make separate estimates of the average duration of different stages of dispute resolution: the completion of service of process (time to file the case), the issuance of judgment (time for the trial and obtaining the judgment), and the moment of payment (time for enforcement). Source: The World Bank, Doing Business 2009
1.26 Number of procedures to enforce a contract
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Number of procedures from the moment the plaintiff files a lawsuit in court until the moment of payment | 2008 A procedure is defined as any interaction between the parties, or between them and the judge or court officer. This includes steps to file the case, steps for trial and judgment, and steps necessary to enforce the judgment. This year the Survey allowed respondents to record procedures that exist in civil law but not common law jurisdictions, and vice versa. To indicate the overall efficiency of court procedures, one procedure is now subtracted for countries that have specialized commercial courts and one procedure for countries that allow electronic filing of court cases. Source: The World Bank, Doing Business 2009
1.27 Strength of investor protection This index assesses the strength of investor protection on a 0-to-10 (best) scale | 2008 The Strength of Investor Protection Index is the average of the 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. Source: The World Bank, Doing Business 2009
1.28 Cost of enforcing contracts Cost of enforcing contracts as a percentage of claim | 2008 This variable is recorded as a percentage of the claim, assumed to be equivalent to 200 percent of income per capita. Only official costs required by law are recorded, including court and enforcement costs and average attorney fees where the use of attorneys is mandatory or common.
Section II: Business environment 2.09 Marginal tax variation Variation between the top tax rate on corporate income and the taxes and mandatory contributions paid by a prototypical business as a percentage of commercial profits | 2009 The top tax rate on corporate income in a country is compiled by the Heritage Foundation from Ernst &Young, Deloitte, IMF, investment agencies, and government sources. The profit tax rate is based on the taxes and mandatory contributions that a medium-sized company must pay or withhold in a given year. To make the data comparable across countries, several assumptions about the business are used. These include that the business is a limited liability, that it is a taxable company with a gross margin (pretax) of 20 percent, and that it has a turnover of 1,050 times income per capita. Source: Top tax rate data from Heritage Foundation, 2009 Index of Economic Freedom; profit tax data from 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 contributions (hours per year) | 2009 Preparation time includes the time to collect all information necessary to compute the tax payable. If separate accounting books must be kept for tax purposes, or separate calculations made, the time associated with these processes is included. Filing time includes the time to complete all necessary tax forms and make all necessary calculations. Payment time is the hours needed to make the payment online or at the tax office. Where taxes and contributions are paid in person, the time includes delays while waiting. 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 network. Source: International Telecommunication Union, World Telecommunication Indicators 2008; national sources
2.14 Broadband Internet subscribers Total broadband Internet subscribers per 100 inhabitants | 2007 or most recent year available The International Telecommunication Union considers broadband to be any dedicated connection to the Internet of 256 kilobits per second (kb/s) or faster, in both directions. Broadband subscribers refers to the sum of DSL, cable modem, and other broadband (for example, fiber optic, fixed wireless, apartment LANs, satellite connections) subscribers. Source: International Telecommunication Union, World Telecommunication Indicators 2008; national sources
Source: The World Bank, Doing Business 2009
2.15 Telephone lines 2.06 Tertiary enrollment Gross tertiary enrollment rate | 2007 or most recent year available According to the World Bankâ&#x20AC;&#x2122;s World Development Indicators, this corresponds to the ratio of total enrollment, regardless of age, to the population of the age group that officially corresponds to the tertiary education level. Tertiary education, whether or not leading to an advanced research qualification, normally requires, as a minimum condition of admission, the successful completion of education at the secondary level. Source: UNESCO Institute for Statistics (June 2009); The World Bank, World Development Indicators 2009; national sources
Main telephone lines per 100 inhabitants | 2007 or most recent year available A main telephone line is a telephone line connecting the subscriberâ&#x20AC;&#x2122;s terminal equipment to the public switched telephone network and that has a dedicated port in the telephone exchange equipment. Source: International Telecommunication Union, World Telecommunication Indicators 2008; national sources
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2.16 Mobile telephone subscribers Mobile cellular telephone subscribers per 100 inhabitants | 2007 The term subscribers refers to users of mobile telephones subscribing to an automatic public mobile telephone service that provides access to the public switched telephone network using cellular technology. This can include analogue and digital cellular systems but should not include noncellular systems. Subscribers to fixed wireless, public mobile data services, or radio paging services are not included. Source: International Telecommunication Union, World Telecommunication Indicators 2008; national sources
2.21 Time to register property Time in days to register property | 2008 The measure captures the median duration that property lawyers, notaries or registry officials indicate is necessary to complete a procedure. It is assumed that the buyer does not waste time and commits to completing each remaining procedure without delay. If a procedure can be accelerated for an additional cost, the fastest legal procedure available and used by the majority of property owners is chosen. If procedures can be undertaken simultaneously, it is assumed that they are. It is assumed that the parties involved are aware of all regulations and their sequence from the beginning.
Technical Notes and Sources
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Source: The World Bank, Doing Business 2009
2.17 Cost of starting a business Cost of starting a business as a percentage of income per capita | 2008 This variable measures the official fees and fees for legal or professional services if such services are required by law to start a new business. Fees for purchasing and legalizing company books are included if these transactions are required by law. The company law, the commercial code, and specific regulations and fee schedules are used as sources for calculating costs. In the absence of fee schedules, a government officer’s estimate is taken as an official source. In the absence of a government officer’s estimate, estimates of incorporation lawyers are used. If several incorporation lawyers provide different estimates, the median reported value is applied. In all cases the cost excludes bribes. Source: The World Bank, Doing Business 2009
2.22 Time to close a business Time in years to close a business | 2008 Information is collected on the sequence of procedures and on whether any procedures can be carried out simultaneously. Potential delay tactics by the parties, such as the filing of dilatory appeals or requests for extension, are taken into consideration. Source: The World Bank, Doing Business 2009
Section III: Financial stability
3.01 Change in real effective exchange rate
Cost of registering property as a percentage of income per capita | 2008 This variable is a percentage of the property value, assumed to be equivalent to 50 times income per capita. Only official costs required by law are recorded; these include fees, transfer taxes, stamp duties, and any other payment to the property registry, notaries, public agencies, or lawyers. Other taxes, such as capital gains tax or value-added tax, are excluded from the cost measure. Both costs borne by the buyer and those borne by the seller are included. If cost estimates differ among sources, the median reported value is used.
Average percentage change in real effective exchange rate from year to year over the period 2003—07. Higher REER represents appreciation | as of 2007 Real effective exchange rates (REERs) are available only for a subgroup of rated countries and come from two main sources: JP Morgan and the IMF. The JP Morgan REER index relies on available measures of the prices of domestically produced finished manufactured goods (excluding primary food and energy), while the IMF index is based on consumer prices. Cross-country comparisons are therefore difficult, but changes over time for individual countries still give a rough indication of the evolution of relative costs. This variable relies on available measures of the prices of domestically produced finished manufactured goods and consumer prices.
Source: The World Bank, Doing Business 2009
Source: Moody’s Statistical Handbook (November 2008)
2.18 Cost of registering property
2.19 Cost of closing a business Cost of closing a business as a percentage of the estate | 2008 The cost of the proceedings is recorded as a percentage of the estate’s value. The cost is calculated on the basis of survey responses by insolvency practitioners and includes court fees as well as fees of insolvency practitioners, independent assessors, lawyers, and accountants. Respondents provide cost estimates from among the following options: less than 2%, 2–5%, 5–8%, 8–11%, 11–18%, 18–25%, 25–33%, 33–50%, 50–75%, and more than 75% of the value of the business estate. Source: The World Bank, Doing Business 2009
2.20 Time to start a business Time in days to start a business | 2008 The measure captures the median duration that property lawyers, notaries, or registry officials indicate is necessary to complete a procedure. It is assumed that the buyer does not waste time and commits to completing each remaining procedure without delay. If a procedure can be accelerated for an additional cost, the fastest legal procedure that is available and used by the majority of property owners is chosen. If procedures can be undertaken simultaneously, it is assumed that they are. It is assumed that the parties involved are aware of all regulations and their sequence from the beginning. Source: The World Bank, Doing Business 2009
3.02 External vulnerability indicator The external vulnerability indicator is the sum of several measures of external exposure as a percentage of foreign exchange reserves | 2007 This variable is the short-term external debt + currently maturing long-term external debt + total nonresident deposits over one year / official foreign exchange reserves (%). Source: Moody’s Statistical Handbook (November 2008)
3.03 Current account balance to GDP Current account balance to GDP provides an indicator of the difficulty a country might have in mobilizing the foreign exchange necessary for debt service | 2008 Balance of payments data are based upon the methodology of the 5th edition of the International Monetary Fund’s Balance of Payments Manual (1993). Source: IMF, World Economic Outlook Database (April 2009)
3.04 Dollarization vulnerability indicator This variable measures the risk of payment crisis and default originating from the presence of a large amount of dollarization in the domestic banking system | 2007 This variable is foreign-currency deposits in domestic banks / official foreign-exchange reserves + foreign assets of domestic banks (%). Source: Moody’s Statistical Handbook (November 2008)
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3.05 External debt to GDP (developing economies) External debt as a percentage of GDP | 2007 This variable measures the total debt held by nonresidents, regardless of the currency in which the debt is denominated, as a share of GDP for emerging markets only. Source: Moody’s Statistical Handbook (November 2008)
3.06 Net international investment position to GDP (advanced economies) Net international investment position as a percentage of GDP | 2007 For advanced economies only, this variable measures the role these countries play in the international movement of capital. The estimate is based on the difference between the market value of a country’s foreign assets and that of its liabilities relative to GDP.
3.11 Local currency sovereign rating This variable measures the probability that a country will pay its local currency borrowing in a full and timely manner | 2009 Local currency sovereign credit ratings of Standard and Poor’s were converted on a linear numerical scale from 0 (reflecting 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 take place at regular intervals, calculating the ratings for one year would take into account the number of months that a country was rated before a change in the rating. For instance, if a country was upgraded one notch on February first, from a 16 to a 17, then a weighted average would be calculated (11 months based on the new rating of 17 and 1 month based on the rating of 16). The same thing occurred for downgrades, and for credit outlook changes. Source: Standard and Poor’s, August 2009
Source: Moody’s Statistical Handbook (November 2008)
3.12 Foreign currency sovereign rating 3.07 Frequency of banking crises This variable is calculated based on the number of banking crises that countries experienced from 1970 to 2008. Recent crises are weighted more heavily | as of 2008 The crisis count includes systemic banking crises (defined as much or all of bank capital being exhausted), excluding banking system distress events that affected isolated banks and were not systemic in nature. World Economic Forum adjustments were made to account for 2008 crises in Austria, Belgium, Ireland, Kazakhstan, Netherlands, and Ukraine.
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Source: Data on crises up to 2007 from Luc Laeven and Fabian Valencia. 2008. “Systemic Banking Crises: A New Database.” IMF Working Paper 08/224, Washington, DC. 2008 data and all weighting based on provisional World Economic Forum analysis.
This variable measures the probability that a country will pay its foreign currency borrowing in a full and timely manner | 2009 Foreign currency sovereign credit ratings of Standard and Poor’s were converted on a linear numerical scale from 0 (reflecting 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 take place at regular intervals, calculating the ratings for one year would take into account the number of months that a country was rated before a change in the rating. For instance, if a country was upgraded one notch on February first, from a 16 to a 17, then a weighted average would be calculated (11 months based on the new rating of 17 and 1 month based on the rating of 16). The same thing occurred for downgrades, and for credit outlook changes. Source: Standard and Poor’s, August 2009
3.08 Financial strengths indicator Weighted average financial strength rating by bank assets | 2008 This indicator is a measure of a bank’s ability to meet obligations to depositors and other creditors as viewed by specialized analysts, and incorporates quantitative and qualitative information on a bank’s operating environment. Sample is restricted to larger banks in each country. Source: Moody’s Statistical Handbook (November 2008)
3.09 Manageability of private debt This is the sum of domestic debt securities and international debt securities for financial institutions and corporate issuers as a percentage of GDP | 2008 The ratio is calculated using the following deflation method:
(0.5) ×
[
Ft P_et
+
Ft –1 P_et –1
]
3.13 Aggregate macroprudential indicator This is the aggregate measure of macroprudential soundness based on real GDP growth, deposit interest rate, inflation volatility, and inflation level | 2008 or most recent year available This measure is calculated as the mean of four normalized variables: year-over-year growth of real GDP, deposit interest rate, standard deviation of month-over-month change in consumer price index during a one-year period, and annual percentage change in average consumer prices. All data as of 2008 except deposit interest rates, for which the latest available data are as of 2007. Source: GDP and inflation level data from IMF, World Economic Outlook Database (April 2009); deposit interest rate data from World Bank, Financial Development Indicators, retrieved June 2009; inflation volatility data from Bloomberg, retrieved June 2009
,
GDPt P_at
where F is debt securities, P_e is end-of-period CPI, and P_a is average annual CPI. 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 Database (April 2009)
3.14 Manageability of public debt This index is based on total debt owed by government to domestic residents, foreign nationals, and multilateral institutions as a percentage of GDP | 2008 The total debt includes both local and foreign currency owed by government to domestic residents, foreign nationals, and multilateral institutions such as the IMF, and is expressed as a percentage of GDP. The values are standardized on a 1–7 scale. Source: Economist Intelligence Unit CountryData Database, data retrieved September 2009
3.10 Aggregate measure of real estate bubbles This is the aggregate measure of real estate bubbles based on price-to-income ratio and price-to-rent ratio | 2008 Price-to-income ratio calculated as (price per square meter / GDP per capita) x 100. Price-to-rent ratio is annual rental income expressed as a percentage of property purchase price. Source: Global Property Guide website, www.globalpropertyguide.com
3.15 Credit default swap spreads Spreads on sovereign credit default swaps | 2009 Reflects pricing of credit default swaps for government sector Source: Bloomberg, data retrieved June 2009
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Section IV: Banking financial services 4.01 Deposit money bank assets to GDP Claims on domestic real nonfinancial sector by deposit money banks 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
]
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
4.02 Central bank assets to GDP Claims on domestic real nonfinancial sector by the central bank as a share of GDP | 2007 or most recent year available The ratio is calculated using the following deflation method:
[
P_et
Ft –1 P_et –1
]
,
where F is central bank claims, P_e is end-of-period CPI, and P_a is average annual CPI. Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
4.03 Financial system deposits to GDP Demand, time, and savings deposits in deposit money banks and other financial institutions as a share of GDP | 2007 or most recent year available The ratio is calculated using the following deflation method: Ft P_et
+
+
Ft –1 P_et –1
]
,
P_at
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 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 recent year available The ratio is calculated using the following deflation method:
(0.5) ×
[
Ft P_et
+
Ft –1 P_et –1
]
,
P_at
where F is demand and time and savings deposits, P_e is end-of period CPI, and P_a is average annual CPI.
P_at
[
Ft P_et
GDPt
GDPt
(0.5) ×
[
where F is credit to the private sector, P_e is end-of-period CPI, and P_a is average annual CPI.
where F is deposit money bank claims, P_e is end-of-period CPI, and P_a is average annual CPI.
+
(0.5) ×
,
P_at
Ft
Private credit by deposit-money banks and other financial institutions as a percentage of GDP | 2007 or most recent year available The ratio is calculated using the following deflation method:
GDPt
GDPt
(0.5) ×
4.05 Private credit to GDP
Ft –1 P_et –1
]
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 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 Figures are based on residence of issuer. Source: Bank of International Settlements, Quarterly Review March 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
4.08 Aggregate profitability indicator
,
GDPt P_at
where F is demand and time and savings deposits, P_e is end-of-period CPI, and P_a is average annual CPI. Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
Based on a three-year average of three measures of profitability: net interest margin, bank return on assets, and bank return on equity | 2005–07 average Net interest margin is the accounting value of bank’s net interest revenue as a share of its interest-bearing (total earning) assets. Bank return on assets is calculated as net income as a percentage of total assets. Bank return on equity is calculated as net income as a percentage of total shareholders’ equity. Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 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 | 2008 This variables shows money and quasi-money as a percentage of GDP, calculated using the following deflation method:
(0.5) ×
[
Ft P_et
+
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Ft –1 P_et –1
]
,
GDPt P_at
where F is money and quasi-money, P_e is end-of-period CPI, and P_a is average annual CPI. Source: Economist Intelligence Unit CountryData Database, data retrieved April 2009
4.09 Bank overhead costs Bank overhead costs as a percentage of total assets | 2007 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. Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
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4.10 Public ownership of banks Percentage of assets held by the 10 largest banks that is located in banks that are 25 percent or more government owned | 2008 This figure is based on commercial banks and governmental credit institutions in each country. Banks owned by public authorities in foreign countries are not included in measure. Source: BankScope database, data retrieved June 2009
5.03 Share of world IPOs Three-year average of number of IPO (initial public offering) issues as a percentage of total global number of issues | 2006–08 average This variable counts the number of IPO issues as defined in the “IPO proceeds amount” variable and shows the percentage of the total global issuance in number of issues attributable to that country. Share calculation based on IPOs in 55 economies included in Index. Source: Thomson Financial SDC Platinum, retrieved April 2009
4.11 Bank operating costs to assets Non interest expense as a percentage of average assets in last reported year | 2008 This ratio is calculated based on the weighted average of assets held by top 10 commercial banks and governmental credit institutions in each country. Source: BankScope database, data retrieved June 2009
4.12 Non-performing bank loans to total loans Percentage of non-performing bank loans relative to total number of loans outstanding | 2008 Figures are sourced from national authorities and IMF staff estimates. Due to differences in national accounting, taxation, and supervisory regimes, IMF Financial Soundness Indicators are not strictly comparable across countries. Source: IMF, Global Financial Stability Report, April 2009
5.04 M&A market share Three-year average of dollar value of M&A (mergers and acquisitions) occurring in a given country as a percentage of total global value | 2006–08 average Percentage of the total world rank value of the transaction in US dollars (including the net debt of the target) attributable to a given country. The rank value is calculated by subtracting the value of any liabilities assumed in a transaction from the transaction value and by adding the target’s net debt (US$ millions). Net debt is straight debt + short-term debt + preferred equity – cash and marketable securities as of the date of the most current financial information prior to the announcement of the transaction. Preferred equity is not included if the cost to acquire preferred shares (CSTPFD) is filled in. Market share calculation based on M&A transactions in 55 economies included in Index. Source: Thomson Financial SDC Platinum, retrieved April 2009
4.13 Private credit bureau coverage Percentage of adults covered by a private credit registry | 2008 This figure includes information on repayment history, unpaid debts, or credit outstanding.
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Source: The World Bank, Doing Business 2009
4.14 Public credit registry coverage Percentage of adults covered by a public credit registry | 2008 This figure includes information on repayment history, unpaid debts, or credit outstanding. Source: The World Bank, Doing Business 2009
V: Non-banking financial services 5.01 IPO market share Three-year average of percentage of world IPOs (initial public offerings) issued in a given country as measured by US dollars | 2006–08 average IPOs are issues where the common stock has never traded publicly in any market and is offered in its initial public offering. Annual volumes accumulate the proceeds amount + over allotment sold (US$ millions) [amount of the issue in this market plus the over allotment amount (a.k.a. green shoe) sold in this market] for all issues based on the issue/announcement date. Market share calculation is based on IPOs in 55 economies included in Index. Source: Thomson Financial SDC Platinum, retrieved April 2009
5.05 M&A transaction value to GDP This variable is the rank value of the three-year average of transactions in US dollars (including the net debt of the target) as a percentage of GDP | 2006–08 average The rank value is calculated by subtracting the value of any liabilities assumed in a transaction from the transaction value and by adding the target’s net debt (US$ millions). Net debt is straight debt + short-term debt + preferred equity – cash and marketable securities as of the date of the most current financial information prior to the announcement of the transaction. Preferred equity is not included if the cost to acquire preferred shares (CSTPFD) is filled in. Source: Thomson Financial SDC Platinum, retrieved April 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
5.06 Share of total number of M&A deals Three-year average of percentage of world M&A (mergers and acquisitions) deals occurring in a given country as measured by the share of total number of global M&A deals | 2006–08 average This is the percentage of total world rank value of transactions in US dollars (including the net debt of the target) attributable to a particular country. The rank value is calculated by subtracting the value of any liabilities assumed in a transaction from the transaction value and by adding the target’s net debt (US$ millions). Net debt is straight debt + short-term debt + preferred equity – cash and marketable securities as of the date of the most current financial information prior to the announcement of the transaction. Preferred equity is not included if the cost to acquire preferred shares (CSTPFD) is filled in. Share calculation based on M&A transactions in 55 economies included in index. Source: Thomson Financial SDC Platinum, retrieved April 2009
5.02 IPO proceeds amount Three-year average of total IPO (initial public offering) proceeds as a percentage of GDP | 2006–08 average This variable represents IPO proceeds as a percentage of GDP. The initial public offering (IPO) proceeds amount is calculated when the common stock has never before traded publicly in any market. Annual volumes accumulate as the proceeds amount + over allotment sold (US$ millions), which is the amount of the issue in this market plus the over allotment amount (a.k.a. green shoe) sold in this market] for all issues based on the issue/announcement date. Source: IPO information from Thomson Financial SDC Platinum, retrieved April 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
5.07 Insurance premiums, direct Direct insurance premiums (life and non-life), including commissions and other charges, prior to cession to a reinsurance company (US$ millions) | 2007 Premium volumes are converted into US dollars to facilitate comparisons between the different markets and regions, using the average exchange rate for the financial year. Where no premium data are available (indicated by “n/a” for the local currency value), the premium income in US dollars is estimated based on the assumption that the ratio of insurance premiums to GDP remained constant (constant insurance penetration). Source: Swiss Re, World Insurance in 2007: Emerging Markets Leading the Way
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5.08 Insurance density Direct life insurance premiums (life and non-life) per capita from domestic sources (US dollars) | 2007 Only premium income from domestic risks is used to calculate insurance penetration and density. Cross-border business is not included. This exclusion has a significant effect in Luxembourg, Ireland, and the United Kingdom. Source: Swiss Re, World Insurance in 2007: Emerging Markets Leading the Way
6.02 Outright forward foreign exchange turnover Percentage share of world total of outright forward foreign exchange turnover | April 2007 Transactions are measured in US dollars and involve the exchange of two currencies at a rate agreed upon on the date of the contract for value of delivery at a time more than two days into the future. Exchange rate is for cash settlement at some time in the future (more than two business days later). Percentages are based on 55 economies included in the Index.
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Source: Bank of International Settlements, Triennial Central Bank Survey, December 2007
5.09 Real growth of direct insurance premiums Annual real rate of growth (%) of direct premiums (life and non-life) based on local currency prices | 2007 Real growth rates are calculated using premiums in local currencies and adjusted for inflation using the consumer price index for each country. Source: Swiss Re, World Insurance in 2007: Emerging Markets Leading the Way
5.10 Insurance penetration Direct domestic premiums (life and non-life) as a percentage of GDP | 2007 Only premium income from domestic risks is used to calculate insurance penetration and density. Cross-border business is not included. This exclusion has a significant effect in Luxembourg, Ireland, and the United Kingdom.
6.03 Foreign exchange swap turnover Percentage share of world total of foreign exchange swap turnover | April 2007 Transactions are measured in US dollars and involve the actual exchange of two currencies (principal amount only) on a specific date at a rate agreed upon at the time of conclusion of the contract (the short leg), and a reverse exchange of the same two currencies at a date further in the future and at a rate (generally different from the rate applied to the short leg) agreed at the time of the contract (the long leg). Both spot/forward and forward/forward swaps are included. Short-term swaps carried out as “tomorrow/next day” transactions are also included in this category. Percentages are based on 55 countries included in the Index. Source: Bank of International Settlements, Triennial Central Bank Survey, December 2007
Source: Swiss Re, World Insurance in 2007: Emerging Markets Leading the Way
6.04 Interest rate derivatives turnover: Forward rate 5.11 Relative value-added of insurance to GDP The value added by insurance services to the economy after costs are subtracted, as a percentage of GDP | 2008 This indicator represents what remains of total sales revenue after the costs of providing insurance products are taken out, signifying the value the insurance sector creates in the economy. Figures are preliminary and subject to change. Source: Global Insight, World Industry Monitor, April 2009
5.12 Securitization to GDP Three-year average of the sum of asset-backed securities (ABS), mortgage-backed securities (MBS), high-yield bonds, and highly leveraged loans’ deal value as a percentage of GDP | 2006–08 average This is calculated based on three-year average GDP. Source: Dealogic Analytics, data retrieved April 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
5.13 Share of total number of securitization deals Three-year average of the sum of asset-backed securities (ABS), mortgage-backed securities (MBS), high-yield bonds, and highly leveraged loans as a percentage of total deals | 2006–08 average This is calculated based on three-year average GDP. Source: Dealogic Analytics, data retrieved April 2009 VI: Financial markets
6.01 Spot foreign exchange turnover Percentage share of world total of spot foreign exchange turnover | April 2007 Transactions are measured in US dollars and involve the exchange of two currencies at a rate agreed upon on the date 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. Source: Bank of International Settlements, Triennial Central Bank Survey, December 2007
agreements Percentage share of world total of over-the-counter single currency forward interest rate agreements turnover | April 2007 Transactions are measured in US dollars and involve interest rate forward contracts in which the rate to be paid or received on a specific obligation for a set period of time, beginning at some time in the future, is determined at contract initiation. Percentages are based on 55 economies included in the Index. Source: Bank of International Settlements, Triennial Central Bank Survey, December 2007
6.05 Interest rate derivatives turnover: Swaps Percentage share of world total of over-the-counter single currency interest rate swaps turnover | April 2007 Transactions are measured in US dollars and involve agreements to exchange periodic payments related to interest rates on a single currency; these can be fixed for floating, or floating for floating based on different indices. This group includes those swaps whose notional principal is amortized according to a fixed schedule independent of interest rates. Percentages are based on 55 economies included in the Index. Source: Bank of International Settlements, Triennial Central Bank Survey, December 2007
6.06 Interest rate derivatives turnover: Options Percentage share of world total of over-the-counter interest rate options turnover | April 2007 Transactions are measured in US dollars and involve option contracts that give the right to pay or receive a specific interest rate on a predetermined principal for a set period of time. Percentages are based on 55 economies included in the Index. Source: Bank of International Settlements, Triennial Central Bank Survey, December 2007
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6.07 Foreign exchange derivatives turnover: Currency swaps Percentage share of world total of over-the-counter foreign exchange currency swaps turnover | April 2007 Transactions are measured in US dollars and involve contracts that commit two counterparties to exchange streams of interest payments in different currencies for an agreed period of time and to exchange principal amounts in different currencies at a pre-agreed exchange rate at maturity. Percentages are based on 55 economies included in the Index. Source: Bank of International Settlements, Triennial Central Bank Survey, December 2007
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 that give the right to buy or sell a currency with another currency at a specified exchange rate during a specified period. This category also includes exotic foreign exchange options such as average rate options and barrier options. Percentages are based on 55 economies included in the Index. Source: Bank of International Settlements, Triennial Central Bank Survey, December 2007
6.09 Stock market turnover ratio Ratio of the value of total shares traded to average real market capitalization | 2007 The denominator is deflated using the following method: Tt P_at (0.5) ×
358
[
Mt P_et
+
, Mt –1 P_et –1
]
6.12 Number of listed companies per 10,000 people Number of publicly listed companies per 10,000 people | 2007 Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated May 2009
6.13 Private domestic bond market capitalization to GDP Domestic debt securities issued by financial institutions and corporations as a share of GDP | 2008 Ratio is calculated using the following deflation method:
(0.5) ×
[
This indicator is the value of listed shares as a percentage of GDP | 2007 or most recent year available The ratio is calculated using the following deflation method:
Ft –1 P_et –1
]
,
P_at
where F is amount outstanding of private domestic debt securities, P_e is end-of-period CPI, and P_a is average annual CPI. 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 Database (April 2009)
6.14 Public domestic bond market capitalization to GDP Domestic debt securities issued by government as a share of GDP | 2008 Ratio is calculated using the following deflation method:
[
where T is total value traded, M is stock market capitalization, P_e is end-of-period CPI, and P_a is average annual CPI.
6.10 Stock market capitalization to GDP
+
GDPt
(0.5) ×
Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
Ft P_et
Ft P_et
+
Ft –1 P_et –1
]
,
GDPt P_at
where F is amount outstanding of public domestic debt securities, P_e is end-of-period CPI, and P_a is average annual CPI. 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 Database (April 2009)
6.15 Private international bonds to GDP (0.5) ×
[
Ft P_et
+
Ft –1 P_et –1
]
,
GDPt P_at
where F is stock market capitalization, P_e is end-of-period CPI, and P_a is average annual CPI. Source: Stock market capitalization and GDP data are from the World Bank, World Development Indicators database, accessed November 2008; other data are from the IMF International Financial Statistics database, electronic version accessed November 2008. Calculated using methodology detailed in Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
6.11 Stock market value traded to GDP Total value of shares traded on stock market exchanges as a percentage of GDP | 2007 or most recent year available Value of shares traded and GDP are measured over the same time period. Source: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “A New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated November 2008
International debt securities issued by financial institutions and corporations as a share of GDP | 2008 International debt securities issued by financial institutions and corporate issuers. This is based on the nationality of the issuer. Ratio is calculated using the following deflation method:
(0.5) ×
[
Ft P_et
+
Ft –1 P_et –1
]
,
GDPt P_at
where F is amount outstanding of private international debt securities, P_e is end-of-period CPI, and P_a is average annual CPI. Source: Bank of International Settlements, Quarterly Review March 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
6.16 Public international bonds to GDP International debt securities issued by government as a share of GDP | 2008 International debt securities issued by government. This is based on the nationality of the issuer. Ratio is calculated using the following deflation method:
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Ft P_et
+
Ft –1 P_et –1
]
7.10 Total number of point of sale (POS) devices
,
GDPt P_at
where F is amount outstanding of public international debt securities, P_e is end-of-period CPI, and P_a is average annual CPI. Source: Bank of International Settlements, Quarterly Review March 2009; GDP data from IMF, World Economic Outlook Database (April 2009)
Total number of POSs per 100,000 adults | 2008 Data collected as part of an access to finance questionnaire administered in February 2009. Survey was directed to the central bank governor’s office or head office of the financial regulator for approval and assignment to a contact person responsible for gathering the appropriate information. Response was received from 139 economies. Source: CGAP. 2009. “Financial Access 2009” (forthcoming), Washington, DC: CGAP 2009. Full results to be released by CGAP in October 2009.
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7.11 MFI borrowers’ penetration rate
VII: Financial access 7.06 Foreign direct investment to GDP Comprised of equity capital, reinvested earnings, and intra-company loans | 2007 Equity capital is the foreign direct investor’s purchase of shares of an enterprise in a country other than that of its residence. Reinvested earnings comprise of the foreign direct investor’s share (in proportion to direct equity participation) of earnings not distributed as dividends by affiliates or earnings not remitted to the foreign direct investor. Such retained profits by affiliates are reinvested. Intra-company loans or intra-company debt transactions refer to short- or long-term borrowing and lending of funds between foreign direct investors (parent enterprises) and affiliate enterprises.
Total number of borrowers from microfinance institutions as a percentage of country’s poor population | 2007 The total number of poor people is calculated based on National Poverty Rates. When National Poverty Rates are not available, forecasted poverty rates are used only for illustrative purposes. Two different methods were used to calculate the forecasted poverty rates. In the first one, poverty was predicted based on both $1/day and $2/day poverty rates, and the minimum of the prediction and the $2/day rate was used. In the second, the prediction was made based only on GNI per capita. Source: Microfinance Information Exchange, Inc. (MIX). September 2007
Source: United Nations Conference on Trade and Development, 2008; GDP data from IMF, World Economic Outlook Database (April 2009)
7.07 Market penetration of bank accounts Number of commercial bank accounts per 100,000 adults | 2008 or most recent available Figures for Brazil, Denmark, France, Norway, and the Russian Federation taken from Demirguc-Kunt, Asli, Thorsten Beck, and Patrick Honohan. 2008. Finance for All? Policies and Pitfalls in Expanding Access. Washington, DC: World Bank. Figures for Nigeria and Vietnam taken from The World Bank. 2008. Banking the Poor: Measuring Banking Access in 54 Economies. Washington, DC: The World Bank. Source: CGAP. 2009. “Financial Access 2009” (forthcoming), Washington, DC: CGAP 2009. Full results to be released by CGAP in October 2009.
7.08 Commercial bank branches Number of commercial bank branches per 100,000 adults | 2008 Data collected as part of an access to finance questionnaire administered in February 2009. Survey was directed to the central bank governor’s office or head office of the financial regulator for approval and assignment to a contact person responsible for gathering the appropriate information. Response was received from 139 economies. Source: CGAP. 2009. “Financial Access 2009” (forthcoming), Washington, DC: CGAP 2009. Full results to be released by CGAP in October 2009.
7.09 Total number of ATMs Total number of ATMs per 100,000 adults | 2008 Data collected as part of an access to finance questionnaire administered in February 2009. Survey was directed to the central bank governor’s office or head office of the financial regulator for approval and assignment to a contact person responsible for gathering the appropriate information. Response was received from 139 economies. Source: CGAP. 2009. “Financial Access 2009” (forthcoming), Washington, DC: CGAP 2009. Full results to be released by CGAP in October 2009.
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About the Authors
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About the Authors
Toopan Bagchi Toopan Bagchi is an Engagement Manager with McKinsey & Company. He serves leading private-sector and non-profit organizations in the United States and emerging markets on issues of strategy and organization. Mr. Bagchi contributed to The Financial Development Report while seconded to the World Economic Forum USA. He was previously with The Boston Consulting Group, the Monitor Group, and the Inter-American Development Bank. Mr. Bagchi holds an MBA from the Darden School of Business at the University of Virginia, an MA in International Affairs from the Nitze School of Advanced International Studies at Johns Hopkins University, and a BA in International Relations and Economics from Brown University. James Bilodeau James Bilodeau is an Associate Director and Head of the Emerging Markets Finance Group at the World Economic Forum USA. He joined the Forum following 10 years of management consulting and research experience, primarily in the areas of financial services and information technology. Immediately prior to joining the Forum, Mr. Bilodeau independently led syndicated research projects for cohorts of Global 2000 companies ranging from an analysis of the key drivers of effective information security and risk management to a study benchmarking the performance of retirement service providers. While working at the Corporate Executive Board in Washington, DC, he led research initiatives on topics such as the provision of financial services to lowerincome consumers, emerging enterprise applications for wireless technology, and IT-enabled collaboration. Mr. Bilodeau also worked as a strategy consultant with Arthur D. Little, Inc. He has an MBA with concentrations in Finance and Strategic Management from the University of Chicago and a BA (honors) in East Asian Studies from Brown University. He completed a fellowship at Keio University in Tokyo, Japan, as the recipient of the Monbusho Japan Studies Scholarship and is currently a Global Leadership Fellow at the Forum. Erik Feyen Erik Feyen is a Financial Economist in the World Bank’s Finance and Private Sector Vice-Presidency. He has been working on financial sector policy and banking and capital market operations for client countries in the African and Middle-Eastern regions. He currently heads the development of the World Bank’s financial sector indicators database and benchmark methodology. Most recently, he analyzed the banking systems of Mozambique and Tanzania as part of the Financial Sector Assessment Program (FSAP), a financial sector diagnostic tool of the IMF and the World Bank. Prior to joining the World Bank, Dr. Feyen worked as a management consultant and as an analyst at the RAND Corporation. He holds a PhD in finance from the University of Amsterdam.
Thierry Geiger Thierry Geiger is Economist and Associate Director within the Global Competitiveness Network and a Global Leadership Fellow at the World Economic Forum. His responsibilities include the development and computation of a wide range of indexes as well as analysis for a number of regional and topical projects. His main areas of interest include econometrics, trade, and finance, while his geographical focus is Asia. He is a co-author of The Global Competitiveness Report, The Global Information Technology Report, and The Global Enabling Trade Report. He is also a contributor to The Financial Development Report and co-editor of The Ukraine Competitiveness Report series. A Swiss national, Mr. Geiger holds a BA in Economics from the University of Geneva with a specialization in monetary and financial economics, and an MA in Economics from the University of British Columbia. Prior to joining the Forum, he worked for the World Trade Organization and Caterpillar Inc. He is also co-founder of Procab Studio SA, an IT company based in Geneva. Margareta Drzeniek Hanouz Margareta Drzeniek Hanouz is Director and Senior Economist with the Global Competitiveness Network at the World Economic Forum, where she researches and writes on issues of national competitiveness, in particular related to the Arab world, Eastern Europe, and international trade. She is lead author or editor of a number of regional and topical reports and papers, including The Global Enabling Trade Report. Previously, she oversaw the economic modeling for some of the Forum’s scenario projects and was charged with developing the economics section of the program for the World Economic Forum’s Annual Meeting in Davos. Before joining the Global Competitiveness Network, Dr Drzeniek Hanouz worked for several years with the International Trade Centre in Geneva, where she was in charge of relations with Central and Eastern European countries. Dr. Drzeniek Hanouz received a Diploma in Economics from the University of Münster and holds a PhD in International Economics from the University of Bochum, both in Germany. Ibiye Harry Ibiye Harry is a Project Associate with the Emerging Markets Finance team at the World Economic Forum USA. Prior to joining the Forum, Ms. Harry worked as an investment banking analyst at Credit Suisse in New York. Ms. Harry holds a BS in Economics with a concentration in Business and Public Policy from The Wharton School, University of Pennsylvania.
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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 coauthored 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 “mustread” 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 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.
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Partner Institutes
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Partner Institutes
The World Economic Forum’s Global Competitiveness Network is pleased to acknowledge and thank the following organizations as its valued Partner Institutes, without whom the realization of The Financial Development Report 2009 would not have been feasible: Argentina IAE- Universidad Austral María Elina Gigaglia, Project Manager Eduardo Luis Fracchia, Professor Australia Australian Industry Group Nicholas James, Economist Tony Pensabene, Associate Director, Economics & Research Heather Ridout, Chief Executive
Bulgaria Center for Economic Development Anelia Damianova, Senior Expert Burkina Faso lnstitut Supérieure des Sciences de la Population (ISSP), University of Ouagadougou Samuel Kabore, Economist and Head of Development Strategy and Population Research Canada Institute for Competitiveness and Prosperity Tamer Azer, Researcher Roger Martin, Chairman and Dean of the Rotman School of Management, University of Toronto James Milway, Executive Director
Austria Austrian Institute of Economic Research (WIFO) Karl Aiginger, Director Gerhard Schwarz, Coordinator, Survey Department
Chile Universidad Adolfo Ibáñez Ignacio Briones, Associate Professor of Economics, School of Government Leonidas Montes, Dean, School of Government Camila Chadwick, Project Coordinator
Bahrain Bahrain Competitiveness Council, Bahrain Economic Development Board Nada Azmi, Business Intelligence Specialist, Economic Planning & Development Jawad Habib, Senior Partner, BDO Jawad Habib Rima Al Kilani, Director, International Marketing
China Institute of Economic System and Management National Development and Reform Commission Zhou Haichun, Deputy Director and Professor Chen Wei, Research Fellow Dong Ying, Professor
Bangladesh Centre for Policy Dialogue (CPD) Khondaker Golam Moazzem, Senior Research Fellow Kazi Mahmudur Rahman, Senior Research Associate Mustafizur Rahman, Executive Director Belgium Vlerick Leuven Gent Management School Lutgart Van den Berghe, Professor, Executive Director and Chairman, Competence Centre Entrepreneurship, Governance and Strategy Bieke Dewulf, Associate, Competence Centre Entrepreneurship, Governance and Strategy Wim Moesen, Professor Brazil Fundação Dom Cabral Carlos Arruda, Executive Director, International Board and Professor and Coordinator of the Competitiveness and Innovation Center Marina Araújo, Economist and Researcher of the Competitiveness and Innovation Center Movimento Brasil Competitivo (MBC) Cláudio Leite Gastal, Director President Denise Alves, Projects Coordinator Elisa de Araújo, Projects Assistant Brunei Darussalam Ministry of Industry and Primary Resources Pehin Dato Yahya Bakar, Minister Dato Paduka Hj Hamdillah Hj Abd Wahab, Deputy Minister Dato Paduka Hamid Hj Mohd Jaafar, Permanent Secretary
China Center for Economic Statistics Research, Tianjin University of Finance and Economics Lu Dong, Professor Jian Wang, Associate Professor Hongye Xiao, Professor Bojuan Zhao, Professor Huazhang Zheng, Associate Professor Colombia National Planning Department Alvaro Edgar Balcazar, Entrepreneurial Development Director Carolina Rentería Rodríguez, General Director Mauricio Torres Velásquez, Advisor Colombian Council of Competitiveness Hernando José Gomez, President Czech Republic CMC Graduate School of Business Tomas Janca, Executive Director Denmark Copenhagen Business School, Department of International Economics and Management Lise Peitersen, Administrative Director Casper Rose, Professor Egypt The Egyptian Center for Economic Studies Hanaa Kheir-El-Din, Executive Director and Director of Research Naglaa El Ehwany, Deputy Director and Lead Economist Malak Reda, Senior Economist
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Finland ETLA—The Research Institute of the Finnish Economy Petri Rouvinen, Research Director Pasi Sorjonen, Head of the Forecasting Group Pekka Ylä-Anttila, Managing Director France HEC School of Management, Paris Bertrand Moingeon, Professor and Deputy Dean Bernard Ramanantsoa, Professor and Dean Germany WHU - Otto Beisheim School of Management, Vallendar Ralf Fendel, Professor of Monetary Economics Michael Frenkel, Professor, Chair of Macroeconomics and International Economics Hong Kong SAR Hong Kong General Chamber of Commerce David O’Rear, Chief Economist Federation of Hong Kong Industries Alexandra Poon, Director The Chinese General Chamber of Commerce Hungary KOPINT-TÁRKI Economic Research Ltd. Ágnes Nagy, Project Manager Éva Palócz, Chief Executive Officer India Confederation of Indian Industry (CII) Chandrajit Banerjee, Director General Tarun Das, Chief Mentor Virendra Gupta, Head, International and Trade Fairs
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Indonesia Center for Industry, SME & Business Competition Studies, University of Trisakti Tulus Tambunan, Professor and Director Ireland Competitiveness Survey Group, Department of Economics, University College Cork Eleanor Doyle, Professor, Department of Economics Niall O’Sullivan Bernadette Power National Competitiveness Council Adrian Devitt, Manager Caoimhe Gavin, Policy Advisor Gráinne Greehy, Graduate Trainee Israel Manufacturers’ Association of Israel (MAI) Shraga Brosh, President Dan Catarivas, Director Yehuda Segev, Managing Director Italy SDA Bocconi School of Management Secchi Carlo, Full Professor of Economic Policy, Bocconi University Paola Dubini, Associate Professor, Bocconi University Francesco A. Saviozzi, SDA Assistant Professor, Strategic and Entrepreneurial Management Department Japan Hitotsubashi University, Graduate School of International Corporate Strategy (ICS) in cooperation with Keizai Doyukai Keizai (Japan Association of Corporate Executives) Yoko Ishikura, Professor Kiyohiko Ito, Vice-President and General Manager for Policy Studies, Keizai Doyukai
Jordan Ministry of Planning & International Cooperation Jordan National Competitiveness Team Hiba Abu Taleb, Primary Researcher Hussein Abwini, Primary Researcher Kawthar Al-Zou’bi, Primary Researcher Kazakhstan JSC “National Analytical Centre of the Government and the National Bank of the Republic of Kazakhstan” Ayana Manasova, Chairperson Aibek Baisakalov, Expert Analyst Korea, Republic of College of Business School, Korea Advanced Institute of Science and Technology – KAIST Ingoo Han, Senior Associate Dean and Professor Ravi Kumar, Dean and Professor Youjin Sung, Manager, Exchange Programme Kuwait Economics Department, Kuwait University Abdullah Alsalman, Assistant Professor Mohammed El-Sakka, Professor Reyadh Faras, Assistant Professor Malaysia Institute of Strategic and International Studies (ISIS) Tan Sri Mohamed Jawhar Hassan, Chairman and Chief Executive Officer Mahani Zainal Abidin, Director-General Steven C.M. Wong, Assistant Director-General Malaysia Productivity Corporation (MPC) Dato’ Nik Zainiah Nik Abd. Rahman, Director General Lee Saw Hoon, Senior Director Mexico Center for Intellectual Capital and Competitiveness Erika Ruiz Manzur, Executive Director René Villarreal Arrambide, President and Chief Executive Officer Jesús Zurita González, General Director Instituto Mexicano para la Competitividad (IMCO) Gabriela Alarcon Esteva, Economist Manuel J. Molano Ruiz, Deputy General Director Roberto Newell Garcia, General Director Ministry of the Economy Felipe Duarte Olvera, Undersecretary for Competitiveness and Standardization Gerardo de la Peña, Technical Secretary for Competitiveness Jose Antonio Torre, Chief of Staff, ProMéxico Trade & Investment Paulo Esteban Alcaraz, Research Director, ProMéxico Trade & Investment Netherlands Erasmus Strategic Renewal Center, Erasmus University Rotterdam Frans A. J. Van den Bosch, Professor Henk W. Volberda, Professor Nigeria Nigerian Economic Summit Group (NESG) Felix Ogbera, Associate Director, Research Sam Ohuabunwa, Chairman Chris Okpoko, Senior Consultant, Research Norway BI Norwegian School of Management Eskil Goldeng, Researcher Torger Reve, Professor
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Pakistan Competitiveness Support Fund Arthur Bayhan, Chief Executive Officer Stephen Manuel, Manager Media & Communication Imran Naeem Ahmad, Communication Specialist
Sweden Center for Strategy and Competitiveness, Stockholm School of Economics Christian Ketels, Senior Research Fellow Örjan Sölvell, Professor
Panama INCAE Business School, Latin American Center for Competitiveness and Sustainable Development (CLACDS) Arturo Condo, Rector Lawrence Pratt, Director, CLACDS Luis Reyes, Project Manager, CLACDS Marlene de Estrella, Director of External Relations
Switzerland University of St. Gallen, Executive School of Management, Technology and Law (ES-HSG) Franz Jaeger, Professor Beat Bechtold, Project Manager
Peru Centro de Desarrollo Industrial (CDI), Sociedad Nacional de Industrias Néstor Asto, Project Director Luis Tenorio, Executive Director Philippines Makati Business Club Alberto A. Lim, Executive Director Michael B. Mundo, Chief Economist Mark P. Opulencia, Deputy Director Poland The Economic Institute, The National Bank of Poland Mateusz Pipien, Director Zbigniew Zólkiewski, Deputy Director Piotr Boguszewski, Advisor Management Observatory Monika Nowacka, Projects Director Ireneusz Tomczak, Chairman of the Board Warsaw School of Economics Bogdan Radomski, Associate Professor Russian Federation Bauman Innovation Alexei Prazdnitchnykh, Principal, Associate Professor Katerina Marandi, Consultant Stockholm School of Economics, Russia Igor Dukeov, Area Principal Carl F. Fey, Associate Dean of Research Saudi Arabia National Competitiveness Center (NCC) Awwad Al-Awwad, Deputy Governor for Investment Khaldon Mahasen, Manager, Investment Performance Assessment Singapore Economic Development Board Lim Hong Khiang, Director Planning 2 Chua Kia Chee, Head, Research and Statistics Unit Cheng Wai San, Head, Planning Slovak Republic Business Alliance of Slovakia (PAS) Robert Kicina, Executive Director Martin Toth, Researcher South Africa Business Leadership South Africa Friede Dowie, Director Michael Spicer, Chief Executive Officer Business Unity South Africa Jerry Vilakazi, Chief Executive Officer Vic Van Vuuren, Chief Operating Officer Spain IESE Business School, International Center for Competitiveness Antoni Subirà, Professor María Luisa Blázquez, Research Associate Alessandro Cembalo, Research Assistant
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Thailand Sasin Graduate Institute of Business Administration, Chulalongkorn University Pongsak Hoontrakul, Senior Research Fellow Toemsakdi Krishnamra, Director of Sasin Piyachart Phiromswad, Faculty of Economics Thailand Development Research Institute (TDRI) Somchai Jitsuchon, Research Director Chalongphob Sussangkarn, Distinguished Fellow Yos Vajragupta, Senior Researcher Turkey TUSIAD Sabanci University Competitiveness Forum Dilek Cetindamar, Director and Professor Funda Kalemci, Project Specialist Ukraine CASE Ukraine, Center for Social and Economic Research Dmytro Boyarchuk, Executive Director Vladimir Dubrovskiy, Leading Economist United Arab Emirates Economic & Policy Research Unit (EPRU), Zayed University Nico Vellinga, Professor Dubai Competitiveness Council Adel Alfalasi, Executive Director Khawla Belqazi, Special Projects Manager United Kingdom LSE Enterprise Ltd, London School of Economics and Political Science Adam Austerfield, Project Director Jane Lac, Project Coordinator Robyn Klingler, Graduate Researcher Venezuela CONAPRI - Venezuelan Council for Investment Promotion Gladis Genua, Executive Director Litsay Guerrero, Manager, Economic Affairs Vietnam Central Institute for Economic Management (CIEM) Dinh Van An, President Phan Thanh Ha, Deputy Director, Department of Macroeconomic Management Pham Hoang Ha, Senior Researcher, Department of Macroeconomic Management Institute for Development Studies in HCMC (HIDS) Nguyen Trong Hoa, Professor and President Du Phuoc Tan, Head of Department Trieu Thanh Son, Researcher
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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
The Financial Development Report 2009
Economic Forum has undertaken an ongoing initiative that aims to provide business leaders and policymakers with a common framework to identify and discuss the drivers of the development of global financial systems and markets.
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
The Financial Development Report
countryâ&#x20AC;&#x2122;s financial system are most important and the ability to empirically calibrate this view relative to other countries.
ISBN-13: 978-92-95044-27-2