2010
The Financial Development Report
World Economic Forum Geneva, Switzerland
World Economic Forum USA Inc. New York, USA
The Financial Development Report 2010
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 2010 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: 92-95044-93-2 ISBN-13: 978-92-95044-93-7 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.
Contents
Contributors
v
Part 2: Country/Economy Profiles
57
How to Read the Country/Economy Profiles ..............................59
Academic Advisors
vii
List of Countries/Economies ........................................................61 Country/Economy Profiles............................................................62
Preface
ix
by Klaus Schwab
Foreword
xi
by Kevin Steinberg
Part 3: Data Tables
291
How to Read the Data Tables ....................................................293 Index of Data Tables ...................................................................295
Executive Summary
xiii
Part 1: Findings from the Financial Development Index 2010
1
1.1: The Financial Development Index 2010: Unifying the Narratives of Reform
3
by James Bilodeau and Ibiye Harry
1.2: Financial Development, Capital Flows, and Capital Controls
31
by Howard Davies and Michael Drexler
1.3: SME Finance: What Have We Learned and What Do We Need to Learn? by Thorsten Beck
49
Data Tables .................................................................................297
Technical Notes and Sources
369
About the Authors
379
Partner Institutes
381
Contributors
Contributors
EDITOR
EXPERT COMMITTEE*
James Bilodeau Associate Director and Head of Emerging Markets Finance World Economic Forum USA
Chris Coles Partner, Actis
PROJECT TEAM Ibiye Harry Project Manager, World Economic Forum USA Lawrence Chuang Associate, World Economic Forum USA PROJECT ADVISORS Margareta Drzeniek Hanouz Director, Senior Economist World Economic Forum Thierry Geiger Associate Director, Economist World Economic Forum CONTRIBUTORS
Howard Davies Managing Director, The London School of Economics and Political Science Michael Drexler Global Head of Strategy, Commercial Investment Banking and Wealth Management, Barclays Nick O’Donohoe Global Head of Research, JPMorgan Chase Gerard Lyons Chief Economist and Group Head of Research, Standard Chartered Raghuram Rajan Professor of Finance, University of Chicago Nouriel Roubini Professor of Economics and International Business, New York University and Chairman, Roubini Global Economics Andrei Sharonov Managing Director, Troika Dialog
Thorsten Beck Professor of Economics and Chairman of the European Banking Center, Tilburg University
Kevin Steinberg Chief Operating Officer, World Economic Forum USA
Howard Davies Managing Director, The London School of Economics and Political Science
Augusto de la Torre Chief Economist for Latin America and the Caribbean, The World Bank
Michael Drexler Global Head of Strategy, Commercial Investment Banking and Wealth Management, Barclays
We would like to thank Dealogic and Thomson Reuters for their generous contribution of data for this Report.
FROM THE WORLD ECONOMIC FORUM Kevin Steinberg, Chief Operating Officer, 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† Abel Lee, Associate Director† Kerry Wellman, Senior Community Manager† Lisa Donegan, Community Manager† Irwin Mendelssohn, Community Manager† Tom Watson, Project Manager† Isabella Reuttner, Project Manager†
Centre for Global Competitiveness and Performance Jennifer Blanke, Director, Lead Economist, Head of the Centre for Global Competitiveness and Performance Irene Mia, Director, Senior Economist Ciara Browne, Associate Director Pearl Samandari, Community Manager Roberto Crotti, Junior Quantitative Economist
We thank Hope Steele for her superb editing work and Neil Weinberg for his excellent graphic design and layout. We would also like to thank Chris Ryan for his assistance in assembling data for this Report.
Nadia Guillot, Senior Coordinator Alexandra Hawes, Coordinator† Takae Ishizuka, Coordinator† Elisabeth Bremer, Coordinator†
* The Forum is grateful for the support of the Industry Partners who served on the Expert Committee. Any findings contained in the Report are solely the view of the Report’s authors and do not reflect the opinions of the Expert Committee members. † Employees of the World Economic Forum USA.
v
Academic Advisors
Academic Advisors
Martin Baily Brookings Institution Thorsten Beck Tilburg University Richard Cooper Harvard University Erik Feyen The World Bank Luc Laeven International Monetary Fund Subir Lall International Monetary Fund Maria Soledad Martinez Peria The World Bank Sergio Schmukler The World Bank Luigi Zingales University of Chicago
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.
vii
Preface
Preface KLAUS SCHWAB Executive Chairman, World Economic Forum
When the Forum’s first Financial Development Report was published in 2008, the world was in the midst of a financial crisis that posed one of the single greatest threats to global prosperity we had seen in over 70 years. Two years later, with the publication of this third edition of The Financial Development Report, the global community can look back with an appreciation that concerted global action may have averted the worst of an immediate crisis. This work is far from complete, however, and the immediate dangers of financial instability are still present. Perhaps the most immediate concern is that many developed economies must confront severe fiscal constraints without jeopardizing a fragile economic recovery. The financial risks confronting the global economy are both broader in scope and longer in term than just those stemming from the recent crisis. The robust growth and relative stability of emerging market economies have been bright spots shining through the turmoil of recent years. It is expected that the global economy will rely on these economies to be the primary engine of global economic growth in the years ahead. Yet these economies in turn must rely on financial systems that, in many instances, are less developed. It is imperative that development areas within these financial systems be addressed to ensure that future economic growth is not undermined: new sources of long-term capital must be tapped to fund much-needed infrastructure; local capital markets must be developed to meet the expanding credit needs of all economic sectors; and access to retail financial services must be extended to help stimulate consumer demand in these markets, which in turn can offset global imbalances. The aftermath of the financial crisis has brought a ferment of ideas about how to respond to the crisis and establish new models for financial systems going forward. The Forum itself has hosted much of this dialogue through its various stakeholder communities, its regional and annual events, and its Network of Global Agenda Councils. While it is important that these ideas be heard and vetted, it is also increasingly important that stakeholders move to unite around a coordinated reform agenda that addresses all of the financial risks that could threaten long-term economic growth. It is in this spirit that we offer this year’s Financial Development Report, as a comprehensive yet accessible reference tool with which
to focus priorities on the most-needed areas of financial reform. 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 findings, and their implications, of the Index as well as possible modifications to its design. 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 our industry partners and the academic experts who served on the project’s Expert Committee: Chris Coles, Partner, Actis; Michael Drexler, Global Head of Strategy, Commercial Investment Banking and Wealth Management, Barclays; Nick O’Donohoe, Global Head of Research, JPMorgan Chase; Howard Davies, Managing Director, London School of Economics; Gerard Lyons, Chief Economist and Group Head of Research, Standard Chartered; Professor Raghuram Rajan, University of Chicago; Andrei Sharonov, Managing Director, Troika Dialog; Kevin Steinberg, Chief Operating Officer, World Economic Forum USA; and Augusto de la Torre, Chief Economist for Latin America and the Caribbean, The World Bank. We are appreciative of our other 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 of the Report, for his energy and commitment to the project, as well as the other members of the project team, including Ibiye Harry and Lawrence Chuang. We are grateful to Margareta Drzeniek Hanouz and Thierry Geiger for their guidance as Project Advisors. Appreciation also goes to the Centre for Global Competitiveness and Performance Team, including Jennifer Blanke, Ciara Browne, Roberto Crotti, Irene Mia, and Pearl Samandari. 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.
ix
Foreword
Foreword KEVIN STEINBERG Chief Operating Officer, World Economic Forum USA
The World Economic Forum is pleased to release The Financial Development Report 2010, the third edition since its inaugural publication in 2008. Initiatives such as this Report aim to enrich and focus the dialogue, among multiple global stakeholders, that the Forum has promoted through its events, Global Agenda Council Network, and Industry Partnership Programme. The Report represents a key ongoing initiative undertaken as part of the Forum’s Industry Partnership Programme. The Programme provides a platform for CEOs and senior executives to collaborate with their peers and an extended community of academics, leaders from government, and experts from civil society to tackle key issues of concern to the global community.
Unifying the narratives of reform Financial reform continues to occupy a central place on the global agenda. In some respects, because the urgency of the response to the immediate financial crisis has moderated, there is now more room for debate about priorities for long-term reform and preferred models for financial development in the years to come. We believe this Financial Development Report provides an important tool with which to ground this debate in actual measures of progress at the country level. At the global level, while progress has been made in many areas—such as the new capital requirements under Basel III—many questions remain in areas such as countercyclical capital buffers and the best way to treat systemically important institutions. Even as multilateral rules are drafted and agreed upon, it is vital that institutional reform at the country level be undertaken to ensure that new rules can be enforced and regulatory arbitrage prevented. The variables in this Report help provide guidance on measuring progress at the country level. As reforms are proposed and some enacted, there is a diversity of opinion around how they may affect the availability and cost of capital and how this impact could affect economic growth. The business environment in different economies, including the tax regime, availability of talent, and cost of doing business, could also impinge on the availability of capital. This Report includes assessments of the business environment and availability of different forms of capital for corporate end-users. The G-20 and various multilateral organizations have identified financial inclusion as a central issue on their agenda. The ability of a financial system to provide
basic financial services—such as loans, savings accounts, and insurance to consumers—is one of its most important functions. A number of measures with which to assess progress in the provision of retail financial services are provided within the Report.
The Financial Development Report 2010 In light of the ongoing richness of debate, we offer this year’s Report as a way to unify these different narratives and enable stakeholders to collectively prioritize, implement, and assess reforms. Part 1 of the Report summarizes this year’s Index results and related findings in three sections. Chapter 1.1 outlines the methodology for the Index, the academic theory and assumptions supporting it, and some of the key findings from the Index results. Chapter 1.2 provides an example of how the Index can be used to help countries prioritize reform efforts, focusing on the development of defenses against volatile capital flows and a code of practice for use of capital controls. Chapter 1.3 highlights the issue of small- and medium-sized enterprise (SME) finance, an example of a critical issue that must be included within an expanded narrative of reform that addresses financial development more broadly. We encourage readers to delve into the detail of Part 2: Country/Economy Profiles and Part 3: Data Tables of the Report. The richness and breadth of the data paint a balanced picture of the challenges and opportunities faced by different countries. By design, this Report must rely on data that are available for all the economies it covers, to proxy for key elements of financial development. This year, as every year, it is with a degree of humility that we put forth our findings given some of the inherent limitations of these data, the rapidly changing environment, and the unique circumstances of some the economies covered. Yet, in the Report’s attempt to establish a comprehensive framework and a means for benchmarking, we feel it provides a useful common vantage point to unify priorities and frame action. We welcome your feedback and suggestions for how we may develop and utilize this Report to promote the potential of financial systems as enablers of growth and individual prosperity. On behalf of the World Economic Forum, we wish to particularly thank the members of the Expert Committee, the Academic Advisors, and James Bilodeau and Ibiye Harry for their boundless support.
xi
Executive Summary
Executive Summary
The Financial Development Report 2010 and the Financial Development Index (FDI) on which it is based provide a score and rank for 57 of the world’s leading financial systems and capital markets. They analyze the drivers of financial system development that support economic growth in advanced and emerging economies 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
The FDI thus takes a comprehensive view in assessing the factors that contribute to the long-term development of financial systems; it includes but is much broader than just measures of immediate financial stability. Because of this broad definition, for the top scorers in the Index, the United States (1st) and the United Kingdom (2nd), the very low scores in financial stability are counterbalanced by incumbent strengths in financial intermediation that buoy their positions in the rankings. The two countries both show advantages in nonbanking financial services and financial markets, and the United Kingdom also demonstrates strength in banking financial services (based on measures of size and efficiency—financial stability is captured elsewhere). The business environments in both countries display signs of deterioration, particularly in the area of taxation. As in last year’s Index, the economies in the top 10 are predominantly smaller (by GDP) than the members of the G-8; this is true for 6 out of the top 10 in overall rank (see Table 1). These smaller economies include Hong Kong SAR (3rd), Singapore (4th), Australia (5th),
Table 1: Top 10 in overall Index ranking
Economy
2010 rank (1 to 57)
2009 rank (1 to 55)
2010 Change score in score (1 to 7) (2010 vs. 2009)
United States
1
3
5.12
United Kingdom
2
1
5.06
–0.01 –0.22
Hong Kong SAR
3
5
5.04
+0.06
Singapore
4
4
5.03
+0.01
Australia
5
2
5.01
–0.12
Canada
6
6
4.98
+0.02
Netherlands
7
8
4.73
–0.12
Switzerland
8
7
4.71
–0.21
Japan Belgium
9
9
4.67
+0.03
10
13
4.65
+0.15
the Netherlands (7th), Switzerland (8th), and Belgium (10th). Both Canada (6th) and Japan (9th) maintained their overall rank from last year. An important finding from this year’s Index results can be seen in the context of the current economic environment: emerging market economies are now the primary driver of global economic growth and, at current rates, could generate the majority of absolute GDP growth over the next five years. Although this finding is encouraging in many respects, it also points toward some risks: the financial systems in many of these countries are less developed than those in advanced economies. On average, emerging market economies scored 1.3 points lower than advanced economies in the Index (see Figure 1, a comparison of GDP growth and this year’s Index scores.) Although financial stability has been a relative advantage for many emerging market economies over the last several years, their performance in other areas of the Index may increasingly constrain economic growth at the country and global level. The risks to economic growth posed by these development areas can be seen in the following critical areas: • Long-term financing for infrastructure. Banks may be increasingly limited in their ability to provide the tenor and amount of financing needed to fund significant infrastructure needs. The development of capital markets in many emerging markets may be necessary to fill this gap. Additionally, weaknesses in
xiii
Executive Summary
Figure 1: Absolute GDP growth vs. Financial Development Index 2010 score
l Average FDI score
in the institutional environments or financial stability of global financial centers such as United States and United Kingdom persist or worsen, this will only add to the urgency of developing financial systems in other countries to promote sustained economic growth worldwide.
n Absolute GDP growth
$8
5
4.45
4
$7 $6.5 trillion 3.16
3
$6
Overall FDI score
Absolute GDP growth (2010–2014, US$ trillions)
$7.7 trillion
2
$5
1 Emerging markets
Advanced economies
Source: GDP data taken from IMF, World Economic Outlook Database, April 2010.
xiv the institutional environments of many economies will need to be addressed to increase the willingness of investors to commit long-term capital. • Deep and accessible local bond markets. The local bond markets in many Asian and Latin American countries are not as developed as other parts of their financial systems. This can limit the availability of capital for important sectors, such as small- and medium-sized enterprises (SMEs) (Chapter 1.3 discusses some of the obstacles to SME financing). Additionally, strong local bond markets can be an important defense against the harmful effects of volatile capital flows (please see Chapter 1.2 for a discussion of capital flows, capital controls, and financial development). • The extension of retail financial access. As seen in many Asian and some Latin American countries, poor access to retail financial services for consumers may hinder efforts to stimulate local demand that could help offset global economic imbalances. Savings, credit (including mortgages), and insurance can help increase and smooth the spending of consumers who will be increasingly critical to sustaining economic growth. The recent financial crisis has underscored the interconnected nature of financial systems. If weaknesses
Part 1 Findings from the Financial Development Index 2010
The Financial Development Index 2010: Unifying the Narratives of Reform JAMES BILODEAU, World Economic Forum USA IBIYE HARRY, World Economic Forum USA
Continued global financial uncertainty has underscored the complexity and interconnectedness of financial systems. Financial instability originally emanating primarily from the US mortgage markets several years ago has proceeded to manifest itself in a number of other asset classes and regions, most recently in sovereign debt in the euro zone.1 Economies continue to grapple with questions of financial reform that must be considered in tandem with other fundamental questions, such as how to drive sustained economic growth and promote fiscal responsibility. This complexity is also illustrated by the degree to which the actions of different stakeholders have impacted the functioning of financial systems. The indebtedness of both individuals and sovereign entities, risk management by financial institutions, the originate-anddistribute model facilitated by the “shadow� banking system, oversight by regulators, and the promotion of exports through exchange rate policy by lawmakers have all been cited as factors influencing the development of financial systems in the last several years. Some recent research also traces the root cause of current financial instability to broader societal and economic questions such as the failure to address income inequality through investments in human capital and education.2 As countries move from an immediate response to financial crisis to the implementation of longer-term policies that will influence the shape of financial systems for years to come, it is important to view these actions while keeping in mind this complexity of financial systems and the factors and stakeholders that influence them. This includes objectively assessing which measures will most improve overall financial development over the long term; how they will affect the different stakeholders within financial systems; and, ultimately, how they will further economic prosperity for all participants in the global economy. Empirical studies concerning financial development and growth have generally found that cross-country differences in levels of financial development explain a considerable portion of the crosscountry differences in growth rates of economies.3 It is in this context that the third annual Financial Development Report aims to provide policymakers with a common framework to identify and discuss the range of factors that are central to the development of global financial systems and markets. It provides the Financial Development Index (FDI), which ranks 57 of the world’s leading financial systems and can be used by countries to benchmark themselves and 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 economies 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
1.1: The Financial Development Index 2010
CHAPTER 1.1
3
1.1: The Financial Development Index 2010
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 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.
4 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,4 and more recently to Ronald McKinnon and Edward Shaw. This link is now well established in terms of empirical evidence.5 The slow economic recovery for many countries since the onset of the recent crisis has underscored the negative impacts that financial systems can have on economic growth; in general, economic recoveries after financial crises have been shown to be much slower than those that occur after recessions not associated with financial crises.6 However, it is important to consider the positive impact that broader financial development and more dynamic financial systems can have on longerterm economic growth as well. 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.7 Financial innovation, when undertaken prudently, can also be important to effectively screen and allocate funds to new and productive enterprises, particularly as technology evolves.8 Thus, although it is important to mitigate the shortterm 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. Among these are 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 also 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.9
The seven pillars of financial development To understand and measure the degree of financial development, one must consider all of the different
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
1.1: The Financial Development Index 2010
Figure 1: Composition of the Financial Development Index
7. Financial access
End users of capital
Source: World Economic Forum.
5 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.)
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.10 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.11 Reforms that bolster a country’s legal environment and investor protection are likely to contribute to a more efficient financial sector.12 Accordingly, we have included variables related to the degree of judicial independence and judicial efficiency. The recent 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. As highlighted in the recent financial crisis, central banks play a critical role in the functioning of financial systems and this year we have included
1.1: The Financial Development Index 2010
Box 1: Financial development, capital flows, and capital controls (Please see Chapter 1.2 by Howard Davies and Michael Drexler for a full discussion of this topic.)
According to classic economic theory, capital flows from developed economies, which have a capital surplus, to developing markets, which have a surplus of investment opportunities. However, this orthodox economic view has been challenged by a number of events. Research has also found that capital has recently flowed from emerging economies, such as China and the Middle East, to developed markets, such as the United States. Capital flows are a feature of globalization and offer a number of worthwhile benefits. These include enabling investors to promote the long-term allocation of resources and providing liquidity and financing where needed. The question is one of how to harness these benefits while mitigating potential risks. Such risks are of particular concern for smaller economies that are still in development. Capital flows that are large relative to a local economy generally bring three dangers: (1) inflation of bubbles, (2) currency mismatches, and (3) maturity or liquidity mismatches. Categories of resilience against these risks include (1) deep local asset markets, (2) deep local currency markets, and (3) well-developed local debt markets. The Financial Development Index (FDI) can help economies assess their resilience to episodes of excessive
capital flow. An economy’s FDI scores in the three aforementioned resilience categories can be aggregated into a defensive score and mapped against its GDP (see Figure 4, Chapter 1.2). If the GDP is small and the defensive score is also small, an economy can be potentially at risk from speculative flows. As a second step, it can also be insightful to map the relationship between an economy’s defensive score and its advanced market score, which aggregates selected variables from the FDI related to the development of more advanced asset markets. Despite the importance of the resilience measures previously described, they might not prevent a capital flow episode that threatens the systemic stability of a local economy. Consequently, there can be circumstances where measures of capital control are required. Historical episodes show that five types of capital controls have been employed most frequently: (1) unremunerated reserve requirements, (2) time requirements, (3) quantitative limits, (4) direct tax on financial transactions, and (5) the regulation of trade between residents and nonresidents. The efficacy of a capital control will depend on the motivation of the speculators it is supposed to deter and also on the state of the economy in which it is implemented.
6
measures related to central bank transparency.13 A measure of the effectiveness of regulation of securities exchanges is also included. The degree to which countries coordinate or harmonize their regulatory regimes internationally is also an important consideration. However, since there is little in the way of cross-country data that captures this in a uniform way, we are unable to include a specific indicator for this—at least until further research becomes available. Better corporate governance is believed to encourage financial development, which in turn has a positive impact on growth.14 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.15 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.16 In general, inadequate enforcement of financial contracts has been found to augment the process of credit rationing, thus hindering the overall process of growth.17 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 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.18 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.19 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.20 (Please see Box 1 for further discussion of capital flows and capital controls in the context of financial development.) Assessments of
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;
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 fundamental to assessing a country’s business environment as well as the type of constraints that businesses may be facing.25 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. High marginal tax rates have been found to have distortionary effects, so we have included a variable to capture this. Because there is 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 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. The creation and improvement of human capital have been found to assist the process of economic growth.22 Empirical evidence supports this observation and shows positive correlations between human capital and the degree of financial development.23 Our proxies for the quality 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.24 However, 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,
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 recent financial crisis as well as in past financial crises. This instability can lead to significant losses to investors, resulting in systemic banking crises, systemic corporate crises, currency crises, and sovereign debt crises. This pillar captures 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.26 We also capture the degree of economic output loss associated with crises (weighting output loss from more recent crises
1.1: The Financial Development Index 2010
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.21
7
1.1: The Financial Development Index 2010
8
more heavily.) A Financial Stress Index also captures the incidence of financial stress in countries that do not reach the proportions of a full-blown crisis.27 It is important that prudential regulation include the establishment of uniform capital adequacy requirements, and accordingly we have included a measurement of Tier 1 capital in this subpillar.28 Some research indicates that quantitative capital adequacy measures are not always accurate measures of the financial strength of banks in developing countries.29 Accordingly, we have included a financial strength indicator that balances quantitative measures of balance-sheet strength with qualitative assessments of banks’ abilities to meet their obligations to depositors and creditors. The last type of crisis captured within the financial stability pillar is sovereign debt crisis. The manageability of public debt defined as total public debt as a percentage of GDP is included in this pillar. The ability of countries to pay this debt in full and in a timely manner is captured in sovereign credit ratings, an important proxy for the risk of such a crisis; these data were calculated as an average of both local currency sovereign credit ratings and foreign currency sovereign credit ratings. A high sovereign credit rating signifies less likelihood of default occasioned by a sovereign debt crisis. Credit default swaps provide a quantitative, marketbased 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 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.
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.30 This relationship occurs because the size of financial markets is viewed as an important determinant of savings and investment.31 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.32 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 market-based financial systems.33 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.34 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.35 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
Fifth pillar: Non-banking financial services
Non-bank financial intermediaries—such as broker dealers, traditional asset managers, alternative asset managers, and insurance companies—can be 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. Because of inadequate regulation and oversight, certain nonbanking financial services, such as securitization, played a detrimental role in the current financial crisis as part of the so-called shadow banking system. However, within the context of a sound legal and regulatory framework, they fulfill unique and vital roles as financial intermediaries. 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.38 Empirical research has found that banks as well as non-bank financial intermediaries are larger, more active, and more efficient in advanced economies.39 Advocates of the market-based system (i.e., non-banks) point to the fact that it is able to finance innovative and high-risk projects.40 There are three main areas of nonbank financing activity that we capture in the Index: initial public offering (IPO), merger and acquisitions (M&A) activity, and securitization activity. Additionally, we include a number of variables on the insurance sector, which can facilitate 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.41 And insurance has been found to mobilize illiquid savings to positively affect growth.42
1.1: The Financial Development Index 2010
in high-return, illiquid assets and speed up the process of economic growth.36 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 Index are aggregate operating ratios, such as bank operating cost to assets and the ratio of nonperforming 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.37 This has a positive effect on the overall economy.
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.43 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.44 Research also shows that as countries become richer, stock markets become more active and efficient relative to banks.45 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.46 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.47
Financial access This third and final category is comprised of one pillar that represents 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
9
1.1: The Financial Development Index 2010
10
Box 2: SME finance: What have we learned and what do we need to learn? (Please see Chapter 1.3 by Thorsten Beck for a full discussion of this topic.)
The availability of financing to small- and medium-sized enterprises (SMEs) has recently gained prominence in policymakers’ debates. The rising profile of this topic has been reflected in a number of realms including discussions on financial sector reform and the G-20’s establishment of an SME finance committee. Empirical research shows that SMEs are more constrained by financing and other institutional obstacles than are large enterprises. These constraints are exacerbated by weaknesses in the financial systems of many developing countries. An access possibilities frontier can be used to explain how difficulties in managing risk and transaction costs involved in SME lending make financial institutions and markets very reluctant to reach out to this group of enterprises, especially in developing countries. The frontier is defined as the maximum share of SMEs that can be served by financial institutions in a commercially viable way. The location of the frontier in a particular economy, and thus the share of bankable SMEs, is determined by technology as well as by the institutional framework within which financial institutions operate. A number of different business models and lending techniques, as well as policies and reforms, can entice financial institutions and markets to lend to SMEs. Despite a traditional focus on relationship lending, research has found that both relationship- and transaction-based lending techniques are appropriate for SME lending. With respect to policymaking, three policy categories exist in expanding SMEs’ access to external finance. Market-developing policies can help push out the frontier, market-enabling policies push incumbent and new financial institutions toward the existing frontier, while market-harnessing policies prevent the financial system from moving beyond the frontier toward a point of financial fragility. The access possibilities frontier allows for a more rigorous analysis of obstacles to SME finance in a specific country. However, this analysis must also take into account the differing size and nature of SMEs across countries.
retail channels. Empirically, greater access to financial services has been associated with the usual proxies for financial development and the resulting economic growth.48 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. We separate our access measures within this pillar into retail and commercial access measures in light of
the different channels (and issues) associated with each. Commercial access includes measures such as access to venture capital, commercial loans, and the local equity markets. Retail access includes measures such as the penetration of bank accounts and ATMs and access to microfinance; these data were provided by the Consultative Group to Assist the Poor and the Microfinance Information Exchange. Given the importance of small- and medium-sized enterprises (SMEs) in driving economic growth in many countries, the importance of financial access for SMEs has recently been highlighted by organizations such as the G-20. Please see Box 2 and the subsequent chapter by Thorsten Beck for a full discussion of some of the financial access issues faced by SMEs. Depending on how they are defined (and they are defined differently across many countries), SMEs can have financial needs that can be viewed from the perspective of both retail and commercial access. There is a shortage of global data related to SME finance, but the G-20 and other multilateral organizations have highlighted this need; when new data become available we will incorporate them into the Index. Performance in the other pillars contributes to performance in this pillar and to the extent of access to financial services by end users. 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 overall structure of the Financial Development Index remains the same as that used in last year’s Report. There are still seven pillars in the Index with the same associated subpillars in each. Each of these subpillars contains the constituent variables that make up the Index. Appendix A lays out the complete structure and methodological detail for the Index. We have made some minor improvements to the Index this year at the variable level. We have added three indicators to enhance the banking system stability subpillar. A measure of output loss during banking crises provides an indication of the depth of past crises in terms of their effect on overall economic output. A Financial Stress Index indicates the degree to which a financial system is under strain irrespective of the existence of a full-blown crisis. The inclusion of the Tier 1 capital ratio provides a measure of capital adequacy within the banking system. We removed the manageability of private debt variable from last year’s Report as it was based on securitized debt, which did not provide a sufficiently consistent measure of debt across all countries in our sample.
The Financial Development Index 2010 rankings The overall ranking for this year’s Financial Development Report can be seen in Table 1, along with the 2009 ranking, the Index score, and the change in score from last year. Looking broadly across the results for the 57 countries covered in the Index, there are some overall trends that emerge.
Table 1: The Financial Development Index 2010 rankings: Comparison with 2009 2010 rank
2009 rank
2010 score (1–7)
Change in score
United States
1
3
5.12
–0.01
United Kingdom
2
1
5.06
–0.22
Hong Kong SAR
3
5
5.04
+0.06
Singapore
4
4
5.03
+0.01
Australia
5
2
5.01
–0.12
Canada
6
6
4.98
+0.02
Country/Economy
Netherlands
7
8
4.73
–0.12
Switzerland
8
7
4.71
–0.21
9
9
4.67
+0.03
Belgium
Japan
10
13
4.65
+0.15 +0.06
France
11
11
4.63
Sweden
12
14
4.60
+0.11
Germany
13
12
4.49
–0.05
Spain
14
15
4.42
+0.02
Norway
15
17
4.31
–0.06
Denmark
16
10
4.30
–0.34
Malaysia
17
22
4.20
+0.23
Ireland
18
16
4.20
–0.19
Austria
19
18
4.20
–0.09
Finland
20
19
4.12
–0.12
United Arab Emirates
21
20
4.03
–0.18
China
22
26
4.03
+0.16
Bahrain
23
27
4.00
+0.15
Korea, Rep.
24
23
4.00
+0.09
Italy
25
21
3.95
–0.03
Saudi Arabia
26
24
3.87
–0.02 +0.16
Israel
27
28
3.85
Overall trends in 2010 rankings
Kuwait
28
30
3.69
+0.07
In comparing Index scores from 2009 and 2010, we see a fairly even split between countries that have advanced and those that have declined. The top-ranked countries within the Index do not change significantly, although the United States does take the top spot from the United Kingdom (2nd); the US score remains essentially unchanged from last year, while the United Kingdom’s drops the most of any country within the top 10. It is only very minor score differentials that separate the United Kingdom from the next five countries that score below it—Hong Kong, Singapore, Australia, Canada, and the Netherlands. In terms of the rest of the top 20, Denmark shows the biggest decline, falling from 10th to 16th place. Malaysia achieves a significant increase, moving from 22nd to 17th place, earning its place as the only emerging market in the top 20 of the Index. All of the BRIC country rankings either improve slightly or stay the same. China shows the biggest advance, moving up four spots to 22nd place. Brazil (34th) moves up two spots, India (37th) one spot, and Russia stays the same at 40th place. As with past years, there can be considerable variation across the seven pillars for specific countries, as can be seen in the pillar results in Table 2. For instance, Sweden, Norway, and Denmark all achieve top ranks in the Institutional environment pillar (2nd, 3rd, and 4th
Jordan
29
25
3.65
–0.24
Chile
30
31
3.53
–0.06
South Africa
31
32
3.53
+0.05
Brazil
32
34
3.53
+0.06
Czech Republic
33
33
3.46
–0.02
Thailand
34
35
3.37
+0.03 +0.06
Poland
35
39
3.33
Slovak Republic
36
37
3.30
0.00
India
37
38
3.24
–0.05 –0.09
Egypt
38
36
3.24
Panama
39
29
3.22
–0.41
Russian Federation
40
40
3.21
+0.05
Morocco
41
n/a
3.20
n/a
Turkey
42
44
3.18
+0.15
Mexico
43
43
3.07
+0.01
Romania
44
n/a
3.05
n/a
Hungary
45
41
3.04
–0.04
Vietnam
46
45
3.03
+0.04
Colombia
47
46
3.02
+0.08
Peru
48
42
3.01
–0.06
Kazakhstan
49
47
2.98
+0.05
Philippines
50
50
2.97
+0.14
Indonesia
51
48
2.90
0.00
Argentina
52
51
2.78
+0.01
Ukraine
53
53
2.76
+0.05
Pakistan
54
49
2.62
–0.23
Bangladesh
55
54
2.55
–0.02
Venezuela
56
55
2.55
+0.03
Nigeria
57
52
2.43
–0.29
1.1: The Financial Development Index 2010
We have enhanced the non-banking financial services pillar by adding some insurance-related variables. Two variables provide better measurement of the nonlife insurance market in terms of both density and coverage. We have also added a variable related to life insurance coverage. Given the importance of local bond markets as a source of capital within economies, we also added a measure of local currency corporate bond issuance to GDP within the bond markets subpillar. We removed two variables related to the corporate governance subpillar within the institutional environment pillar—official supervisory power and private monitoring of the banking industry—because of a lack of updated data. We have also added two countries to the Index: Morocco and Romania. This raises the total number of countries covered in the Index from 55 to 57. Accordingly, this will lower the year-on-year ranks of countries that score below either of these countries.
11
1.1: The Financial Development Index 2010
12
Table 2: Financial Development Index 2010
OVERALL INDEX
FACTORS, POLICIES, AND INSTITUTIONS 1st pillar: Institutional environment
Country/Economy
Rank Score
United States United Kingdom Hong Kong SAR Singapore Australia Canada Netherlands Switzerland Japan Belgium France Sweden Germany Spain Norway Denmark Malaysia Ireland Austria Finland United Arab Emirates
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
5.12 5.06 5.04 5.03 5.01 4.98 4.73 4.71 4.67 4.65 4.63 4.60 4.49 4.42 4.31 4.30 4.20 4.20 4.20
20 21
China Bahrain
Country/Economy
Rank Score
2nd pillar: Business environment Country/Economy
Rank Score
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
6.08 6.05 5.88 5.88 5.87 5.79 5.78 5.78 5.76 5.70 5.66 5.66 5.59 5.58 5.55 5.54 5.51 5.47 5.13
Sweden Singapore Hong Kong SAR Finland Switzerland Denmark Canada Netherlands Norway France Belgium Germany Australia Bahrain United Kingdom Austria United States Ireland Korea, Rep.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
5.99 5.91 5.89 5.87 5.80 5.79 5.72 5.66 5.62 5.56 5.54 5.51 5.48 5.45 5.45 5.37 5.37 5.36 5.33
4.12 4.03
Singapore Sweden Norway Denmark Canada United Kingdom Finland Germany Netherlands Hong Kong SAR Switzerland Austria Belgium United States Ireland Japan France Australia Israel Malaysia Bahrain
20 21
5.05 5.01
Japan United Arab Emirates
20 21
22 23
4.03 4.00
Spain United Arab Emirates
22 23
4.96 4.78
Saudi Arabia Spain
Korea, Rep. Italy
24 25
4.00 3.95
Hungary Jordan
24 25
4.59 4.47
Saudi Arabia Israel Kuwait Jordan Chile South Africa Brazil Czech Republic Thailand Poland Slovak Republic India Egypt Panama Russian Federation Morocco Turkey Mexico
26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
3.87 3.85 3.69 3.65 3.53 3.53 3.53 3.46 3.37 3.33 3.30 3.24 3.24 3.22 3.21 3.20 3.18 3.07
Romania Chile South Africa Saudi Arabia Italy Thailand Panama Czech Republic Korea, Rep. China Poland Kuwait Egypt Turkey Slovak Republic Peru Philippines Nigeria
26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
Romania Hungary Vietnam Colombia Peru Kazakhstan Philippines Indonesia Argentina Ukraine Pakistan Bangladesh Venezuela Nigeria
44 45 46 47 48 49 50 51 52 53 54 55 56 57
3.05 3.04 3.03 3.02 3.01 2.98 2.97 2.90 2.78 2.76 2.62 2.55 2.55 2.43
Brazil Vietnam Indonesia Colombia Mexico Morocco Kazakhstan India Argentina Russian Federation Pakistan Ukraine Bangladesh Venezuela
44 45 46 47 48 49 50 51 52 53 54 55 56 57
3rd pillar: Financial stability Country/Economy
Rank Score 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19
6.11 5.75 5.68 5.66 5.64 5.48 5.38 5.37 5.21 5.15 5.13 5.09 5.03 4.98 4.98 4.95 4.93 4.91 4.83
5.13 5.11
Saudi Arabia Hong Kong SAR Malaysia Singapore Switzerland United Arab Emirates Chile Norway Australia Brazil France Finland Canada Slovak Republic Mexico Morocco China Kuwait Belgium Peru Austria
20 21
4.82 4.80
22 23
5.02 4.87
Czech Republic Bahrain
22 23
4.79 4.73
Italy Hungary
24 25
4.76 4.75
Germany Thailand
24 25
4.72 4.71
4.47 4.46 4.42 4.36 4.32 4.32 4.28 4.20 4.11 4.08 4.04 3.87 3.85 3.82 3.81 3.67 3.64 3.63
Romania Slovak Republic Czech Republic Turkey Malaysia Chile Kuwait Israel Russian Federation Poland Colombia Thailand China Kazakhstan Panama Morocco Argentina Jordan
26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
4.74 4.68 4.67 4.62 4.59 4.53 4.51 4.45 4.43 4.42 4.33 4.29 4.26 4.16 4.14 4.02 4.02 3.96
Denmark Sweden South Africa Poland Bangladesh Netherlands Israel Japan Colombia Egypt Indonesia Philippines Italy United States Venezuela Jordan Russian Federation Korea, Rep.
26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43
4.67 4.62 4.56 4.55 4.52 4.51 4.47 4.46 4.44 4.39 4.39 4.38 4.29 4.26 4.25 4.20 4.17 4.15
3.61 3.58 3.54 3.52 3.51 3.37 3.23 3.21 3.21 3.15 2.94 2.83 2.53 2.34
Ukraine South Africa Mexico Peru Egypt Brazil Pakistan Vietnam India Philippines Indonesia Venezuela Nigeria Bangladesh
44 45 46 47 48 49 50 51 52 53 54 55 56 57
3.94 3.92 3.90 3.83 3.81 3.80 3.60 3.47 3.35 3.34 3.22 3.07 2.83 2.80
Panama India United Kingdom Spain Vietnam Kazakhstan Romania Turkey Pakistan Ireland Argentina Ukraine Nigeria Hungary
44 45 46 47 48 49 50 51 52 53 54 55 56 57
4.09 4.03 3.99 3.94 3.87 3.82 3.77 3.70 3.65 3.60 3.24 3.13 3.07 2.89
FINANCIAL ACCESS
FINANCIAL INTERMEDIATION 4th pillar: Banking financial services Country/Economy
5th pillar: Non-banking financial services
Rank Score
Country/Economy
6th pillar: Financial markets
Rank Score
Country/Economy
Rank Score
7th Pillar: Financial access Country/Economy
Rank Score
1
5.36
6.07
5.83
5.22
5.51
2
5.08
Australia Hong Kong SAR
1
2
United States Singapore
1
5.34
United States United Kingdom
1
2
2
5.11
Spain
3 4
5.33 5.24
Canada China
3 4
4.49 4.45
Switzerland United Kingdom
3 4
5.02 5.02
Belgium Saudi Arabia
3 4
5.07 4.73
Japan Ireland
5 6
5.17 5.07
Russian Federation Korea, Rep.
5 6
4.28 4.15
Japan Australia
5 6
4.84 4.68
United States Canada
5 6
4.70 4.67
Australia China
7 8
5.06 4.91
Japan Australia
7 8
4.14 3.96
France Netherlands
7 8
4.56 4.51
Sweden Austria
7 8
4.65 4.51
Belgium Sweden
9 10
4.88 4.81
Netherlands Spain
9 10
3.65 3.64
9 10
4.41 4.31
Canada Malaysia
11 12
4.76 4.70
Singapore Brazil
11 12
3.61 3.56
Kuwait Germany Hong Kong SAR Canada
11 12
4.31 4.30
Singapore Bahrain
13 14
4.64 4.61
India Germany
13 14
3.53 3.43
Belgium Spain
13 14
4.07 4.00
Switzerland Norway
15 16
4.52 4.33
15 16
3.39 3.18
Italy Denmark
15 16
3.90 3.78
Germany Austria Denmark United Arab Emirates Israel Italy France Finland Panama Jordan United States Korea, Rep. Czech Republic Kuwait South Africa Morocco Thailand Saudi Arabia Vietnam Slovak Republic Chile Brazil Poland Turkey India Egypt Argentina
17
4.33
France Ireland Hong Kong SAR
17
3.18
17
3.64
9 10 11 12 13 14 15 16 17
4.48 4.30 4.27 4.27 4.26 4.19 4.08 3.82 3.74
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
4.21 4.19 4.17 4.15 4.13 4.09 4.08 4.03 4.03 4.01 3.96 3.88 3.73 3.68 3.63 3.55 3.53 3.49 3.41 3.24 3.22 3.13 3.07 3.06 3.03 2.93
Malaysia South Africa Switzerland Italy Kazakhstan Belgium Ukraine Argentina Sweden Poland United Arab Emirates Jordan Denmark Israel Philippines Egypt Norway Finland Indonesia Colombia Bahrain Mexico Austria Turkey Morocco Chile
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
3.17 2.76 2.75 2.70 2.55 2.55 2.48 2.48 2.40 2.37 2.32 2.30 2.27 2.21 2.17 2.14 2.13 2.12 2.07 2.06 1.99 1.98 1.96 1.90 1.89 1.86
Sweden Korea, Rep. Jordan Finland Austria Israel Ireland India Malaysia Norway South Africa United Arab Emirates Hungary China Venezuela Thailand Russian Federation Brazil Saudi Arabia Pakistan Philippines Egypt Turkey Romania Poland Bahrain Kazakhstan
Bahrain United Kingdom Norway Spain Singapore France United Arab Emirates Ireland Israel
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
3.46 3.34 3.32 2.88 2.82 2.82 2.81 2.61 2.60 2.45 2.30 2.24 2.14 2.13 2.05 2.05 1.93 1.91 1.90 1.88 1.87 1.87 1.85 1.76 1.74 1.71
Kazakhstan Bangladesh Philippines Peru Pakistan Colombia Ukraine Indonesia Mexico Nigeria Venezuela Hungary Romania Russian Federation
44 45 46 47 48 49 50 51 52 53 54 55 56 57
2.86 2.77 2.75 2.73 2.69 2.65 2.62 2.61 2.59 2.43 2.40 2.21 2.11 2.05
Czech Republic Venezuela Panama Vietnam Peru Thailand Hungary Slovak Republic Kuwait Romania Saudi Arabia Nigeria Pakistan Bangladesh
44 45 46 47 48 49 50 51 52 53 54 55 56 57
1.73 1.70 1.65 1.65 1.63 1.60 1.52 1.46 1.44 1.44 1.40 1.25 1.25 1.12
Chile Morocco Czech Republic Mexico Ukraine Slovak Republic Vietnam Peru Indonesia Argentina Colombia Nigeria Panama Bangladesh
44 45 46 47 48 49 50 51 52 53 54 55 56 57
1.71 1.63 1.62 1.59 1.56 1.51 1.45 1.45 1.44 1.40 1.35 1.21 1.11 1.01
Vietnam Netherlands Malaysia Egypt Italy Chile Switzerland Denmark China Brazil Japan Germany Czech Republic Turkey Panama Slovak Republic Jordan Bangladesh Thailand Hungary Poland Indonesia Romania Kuwait Mexico South Africa Peru Morocco Korea, Rep. Colombia Ukraine India Philippines Finland Nigeria Kazakhstan Russian Federation Pakistan Argentina Venezuela
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 56 57
3.72 3.69 3.63 3.61 3.59 3.56 3.56 3.52 3.44 3.42 3.38 3.34 3.31 3.29 3.27 3.24 3.22 3.12 3.11 3.05 3.05 3.02 3.01 2.99 2.95 2.95 2.93 2.90 2.86 2.81 2.77 2.72 2.65 2.58 2.55 2.55 2.37 2.32 2.19 1.97
United Kingdom Netherlands Hong Kong SAR
1.1: The Financial Development Index 2010
Table 2: Financial Development Index 2010 (cont’d.)
13
1.1: The Financial Development Index 2010
14
Table 3: Financial stability: Top 20 economies 2010 rank
Economy
Score
1 2 3 4 5 6 7 8 9 10 11 12
Saudi Arabia Hong Kong SAR Malaysia Singapore Switzerland United Arab Emirates Chile Norway Australia Brazil France Finland
6.11 5.75 5.68 5.66 5.64 5.48 5.38 5.37 5.21 5.15 5.13 5.09
13 14 15 16 17 18 19 20
Canada Slovak Republic Mexico Morocco China Kuwait Belgium Peru
5.03 4.98 4.98 4.95 4.93 4.91 4.83 4.82
places, respectively) but do not make the top 10 in either the non-banking financial services pillar or the financial markets pillar. Similarly, some emerging-market economies achieve high scores in financial stability. In Table 3 one sees that 8 of the top 20 economies in the financial stability pillar are emerging markets. 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 inflows in the period preceding the crisis. However, it is important not to confuse financial stability as measured in the third pillar of the Index with broader financial system development as measured in the overall Index. The broader Index 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 by diversifying risks and efficiently allocating capital to those who most need it. Thus, we see that many of those economies that do perform well in the financial stability pillar do not perform nearly as well in other pillars in the Index. 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
limit their exposure to the global financial turmoil. As described previously in this chapter, in some instances financial stability may imply a tradeoff with healthy risk-taking or the efficient allocation of capital to the highest-return investments. Also, notably, the risks that can stem from a lack of financial development are broader in scope than financial crises or immediate financial instability. To illustrate this point further, we will look at the relationship between economic growth and financial development. Financial development and economic growth
In Figure 2, one sees a fairly strong correlation between financial development and GDP per capita. As discussed earlier in this chapter, the link between economic growth and financial development is well established in the academic literature. A potentially more surprising finding can be observed when one considers the current global economic environment. In the wake of the recent financial crisis, many emerging-market economies have demonstrated highly resilient and robust economic growth, particularly when compared with that of developed countries. The implication of this finding as it relates to financial development can be seen in Figure 3. We have plotted the 57 countries covered by the Index in terms of the compound annual growth rate (CAGR) of their GDP and their overall Index score. While the correlation is not as tight as it is with GDP per capita, the basic conclusion is still obvious: many of the highest-growth economies also have the least-developed financial systems. The implication of this finding for individual countries is clear, and is one that this Report has aimed to address since its inception: countries must take a holistic approach in the assessment and improvement of their financial systems so they can continue to support economic growth. Yet there are also broader implications for the global economy in light of the current fragile economic recovery. In Figure 4 we have used IMF forecasts of nominal GDP from 2010 to 2014 to create an estimate of the absolute amount of GDP growth in emerging markets (US$7.7 trillion) vs. advanced economies (US$6.5 trillion) over the next five years. By this rough estimate, approximately 54 percent of global economic growth in the next five years could come from emerging markets. By contrast, the average FDI score for emerging markets is 3.16 vs. 4.45 for advanced economies. Thus, in broadest terms the global economic recovery will be disproportionately affected by the performance of less-developed financial systems in emergingmarket economies. Although many of these economies demonstrated a high degree of financial stability through the recent financial crisis, there could be other potential risks for other aspects of their financial systems. A review of regional results of this year’s FDI suggests what some of these risks might be.
1.1: The Financial Development Index 2010
Figure 2: GDP per capita vs. Financial Development Index 2010
6
R2 = 0.63
FDI 2010 score
5
4
3
2 0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
GDP per capita 2009 (US dollars)
Source: GDP data taken from IMF, World Economic Outlook Database, April 2010.
15
Figure 3: 2005–09 GDP CAGR vs. Financial Development Index 2010 score
10
2005–09 GDP CAGR
8
6
4
R2 = 0.26
2
0 2
3
4
–2
Overall FDI score
Source: GDP data taken from IMF, World Economic Outlook Database, April 2010. Note: CAGR = compound annual growth rate.
5
6
l Average FDI score
$8
n Absolute GDP growth
5
$7.7 trillion 4.45 4 $7
$6.5 trillion 3
3.16
$6
Overall FDI score
Absolute GDP growth (2010–2014, US$ trillions)
1.1: The Financial Development Index 2010
Figure 4: Absolute GDP growth vs. Financial Development Index 2010 score
2
$5
1
Emerging markets
Advanced economies
Source: GDP data taken from IMF, World Economic Outlook Database, April 2010.
16
Asian financial development and economic growth
Figure 5 shows a summary of the performance of Asian economies (excluding Japan) across the seven pillars of the FDI. China, India, and Hong Kong are broken out separately, while the remaining Asian countries are averaged together, weighted by GDP. As a well-established global financial center, Hong Kong generally performs significantly better than other countries. Financial stability is commonly a relative strength for all these economies. Some of the weaker pillar scores, however, begin to reveal some potential risks that these financial systems might pose for economic growth, both in the region and globally. Relatively weak scores in the financial markets pillar and non-banking financial services pillar may indicate an inability of capital markets to serve critical financing needs in the future. In particular, scores in the bond market subpillar were low in many of these countries. As the credit needs of companies in the region continue to expand, the ability to tap local bond markets may become critically important. As described in Chapter 1.2, deep local bond markets can also provide an important bulwark against volatile cross-border capital flows. Many Asian countries have highlighted the criticality of investing in infrastructure to support continued economic growth. In many of these economies, the ability of banks to provide the tenor of financing needed to support long-term investments in infrastructure is limited in the face of expanding need. Public investment in infrastructure may also diminish as the provisions of
stimulus packages begin to subside. A lack of deep local bond markets could mean the absence of a critical source of long-term financing. Some of these weaknesses appear to translate into low scores for financial access in some Asian countries, because corporations indicate difficulty obtaining financing through the capital markets relative to loans or private credit. Retail financial access for consumers is also an area of weakness for many of these economies. The ability of Asian economies to stimulate domestic demand could be hindered by limited access to savings and demand accounts, consumer credit, mortgages, and insurance. This in turn could affect the potential for Asian consumer demand to offset global economic imbalances that could threaten economic growth. Latin American financial development and economic growth
A summary of the performance of Latin American countries across the seven pillars can be seen in Figure 6. Brazil and Mexico are broken out separately, while the other Latin American countries are averaged together, weighted by GDP. There appears to be a relatively high degree of uniformity in the performance of countries across the pillars. As with the Asian economies, financial stability is a clear strength. By contrast, performance in the financial markets and non-banking financial services pillars is relatively low. (Brazil scored higher than other countries in the non-banking financial services pillar because of a very high level of IPO activity.) The development of deep
1.1: The Financial Development Index 2010
Figure 5: Asian performance across pillars
7
n China
6
n India n Hong Kong SAR n Rest of Asia
FDI 2010 score
5 4 3 2 1 0 Pillar 1 Institutional environment
Pillar 2 Business environment
Pillar 3 Financial stability
Pillar 4 Banking financial services
Pillar 5 Non-banking financial services
Pillar 6 Financial markets
Pillar 7 Financial access
Note: Summary of results for Asian countries, excluding Japan. Rest of Asia consists of Bangladesh, Indonesia, Kazakhstan, Korea, Rep., Malaysia, Pakistan, the Philippines, Singapore, and Vietnam, with results weighted by GDP.
17
Figure 6: Latin American performance across pillars
FDI 2010 score
7 6
n Brazil
5
n Mexico n Rest of Latin America
4 3 2 1 0 Pillar 1 Institutional environment
Pillar 2 Business environment
Pillar 3 Financial stability
Pillar 4 Banking financial services
Pillar 5 Non-banking financial services
Pillar 6 Financial markets
Note: Rest of Latin America consists of Argentina, Chile, Colombia, Panama, Peru, and Venezuela, with results weighted by GDP.
Pillar 7 Financial access
1.1: The Financial Development Index 2010
local markets can be important to ensure that all sectors within these economies are served. Research has shown that in the absence of deep local markets, there are segments of the economy, particularly SMEs, that may not be able to access capital as easily as larger corporations.49 Given that on average SMEs contribute 29 percent to formal GDP in emerging markets, this could be a key constraint to economic growth in the region.50 Similar to Asia, investment in infrastructure will be essential to support the continued pace of economic growth in Latin America. Local bond markets can provide an important source of disciplined long-term capital to augment funding by banks and national development banks such as BNDES (Brazilian Development Bank). Unlike Asian economies, Latin American economies were not as weak in financial access as in the other pillars. This was in part because of stronger scores with respect to retail finance. However, access to commercial finance proved weaker, particularly in Mexico where severe constraints to many forms of capital—including venture capital, private credit, loans, and equity markets— exist. Although these Latin American economies exhibit a high degree of financial stability, a limited availability of capital could pose a major risk to economic growth over the longer term.
18 Financial development risks in the United States and United Kingdom
The United States and United Kingdom hold the number one and two spots in the FDI rankings, respectively. The score of the United States remains nearly stagnant and that of the United Kingdom actually goes down; both countries’ performance is uneven across the different pillars. In Table 4 we have summarized the performance of these two global financial centers. As in past years, their top rankings are driven primarily by robust performances in financial intermediation; both show strength in non-banking financial services and financial markets, and the United Kingdom shows a continued advantage in banking (which, as noted previously, includes measures of size and efficiency—financial stability is captured elsewhere). Their solid performances in financial intermediation contrasts with weak scores in other areas—in Table 4 we have highlighted the pillars in which they rank lower than 10. Financial stability remains a key concern for these countries, which rank toward the bottom of the Index. Other low scores indicate additional areas that may be of concern over the longer term. The business environment in both countries has deteriorated, in large part because of poor performance with respect to taxation. Legal and regulatory issues are a drag on the institutional environment in the United States, and relatively low efficiency pulls down banking performance in the country.
We provide further detail on these countries later in this chapter, but highlight some general issues here to illustrate the broader risks that they might pose to global economic growth. If the performance of these global financial centers trends downward, it will heighten the urgency of financial systems in emerging markets to provide the effective financial intermediation and access to capital that supports economic growth. Additionally, the global nature of these two financial centers means that they can, in some respects, serve as bellwethers for financial systems elsewhere. Regulatory consistency and coordination is more and more important in today’s increasingly interconnected financial markets. If these pre-eminent global financial centers adopt policies that are inconsistent with the long-term development and improved performance of financial systems—or, conversely, if they fail to take needed actions—then their positive influence as models for financial systems elsewhere would be compromised.
Regional analysis While some high-level trends were highlighted earlier, it is at the country level that some of the potentially most useful findings from this Report can be seen. The Country Profiles contained in Part 2 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 States achieves top standing in the Financial Development Index this year, although its overall score does not change relative to 2009. The United States continues to display a mix of contrasting strengths and weaknesses across the seven pillars. Strengths exist in financial intermediation, particularly with respect to non-banking financial services (1st) and financial markets (1st). This includes M&A activity (2nd) and securitization (1st); the impact of the systemic risk potentially created by some of these activities is not captured in the non-banking financial services pillar, but rather in the financial stability pillar. The United States has deep and active financial markets across the four types captured in the Index. Size is an important component of performance across these markets, but indicators of activity such as stock market turnover (2nd), stock market value traded (2nd), and spot foreign exchange turnover (2nd) are also strengths. Financial stability continues to be an area of great challenge for the United States, where it achieves a low overall score (39th). Particular weakness is evident in banking system stability (52nd) and currency stability (41st) measures. The banking system in general also exhibits signs of difficulty, with relatively low scores in size (19th) and
UNITED KINGDOM 2010 FDI rank
Pillar 1: Institutional environment Pillar 2: Business environment Pillar 3: Financial stability Pillar 4: Banking financial services Pillar 5: Non-banking financial services Pillar 6: Financial markets Pillar 7: Financial access Overall Index
6 15 46 1 2 4 10 2
2009–10 rank change
+9 –3 –9 +1 –1 –2 +6 –1
UNITED STATES
2010 FDI score
2009–10 score change
2010 FDI rank
2009–10 rank change
2010 FDI score
2009–10 score change
5.79 5.45 3.99 5.36 5.51 5.02 4.30 5.06
+0.25 –0.18 –0.58 +0.03 –0.85 –0.50 +0.28 –0.22
14 17 39 27 1 1 5 1
–3 –7 –1 –7 +1 0 +7 +2
5.58 5.37 4.26 4.01 6.07 5.83 4.70 5.12
–0.06 –0.33 –0.30 –0.20 +0.14 +0.18 +0.51 –0.01
1.1: The Financial Development Index 2010
Table 4: Year-over-year changes in the Financial Development Index rank and score
Note: Data in blue bold indicate pillars where the rank is lower than 10.
efficiency (38th). Areas with a margin for improvement in the business environment include the distortive effect of taxes and subsidies on competition (46th) and the quality of math and science education (30th). The United Kingdom falls to 2nd place in the Index, accompanied by a decrease in its overall score. The country demonstrates contrasting strengths and weaknesses in the pillars similar to the contrast seen in the United States. Its financial intermediation pillars show the greatest strength, offsetting drawbacks in other areas. The United Kingdom’s poor performance in financial stability (46th) is particularly driven by low scores in banking system stability (54th) and currency stability (45th). The country achieves top standing for the size of its banking system, though it performs much less well with respect to its efficiency (26th). Foreign exchange (1st) and derivatives (1st) markets are areas of particular strength within financial markets (4th). The United Kingdom came in 3rd with respect to insurance, achieving high marks in indicators such as life (3rd) and non-life insurance density (4th). M&A activity (1st) is an area of strength across measures of transaction value and number of M&A deals; securitization is also quite strong (2nd). Although the UK institutional environment is fairly positive overall (6th), it demonstrates a need for improvement across areas related to regulation and corporate governance; this includes the centralization of economic policymaking (46th), the burden of government regulation (32nd), and the strength of auditing and reporting standards (14th). Taxation (29th) is also a particular area of difficulty, as indicated by the country’s high marginal tax rates and the distortive effect of taxes and subsidies on competition. Canada maintains its 6th-place ranking in the FDI with a solid performance across all pillars of the Index. Non-banking financial services is a particular asset; Canada comes in 3rd, showing strength across the measures of securitization, IPO, and M&A activity. The country also demonstrates a good performance in the other two financial intermediation pillars, banking financial services (11th) and financial markets (12th). Despite its degree of economic integration with the United States, Canada continues to show clear divergence with respect
to financial stability, where it comes in 13th. The stability of its banking system (8th) is a particular strength within this pillar, although it is partially offset by an inferior performance in currency stability (37th). In terms of its institutional environment, Canada is consistently solid across measures of corporate governance and financial sector liberalization. Potential areas of improvement in the business environment pillar include the distortive effect of taxes and subsidies on competition (23rd) and marginal tax variation (27th). The Netherlands rises one rank this year to 7th place, delivering positive results across most of the FDI pillars. One clear area of weakness is demonstrated in the financial stability pillar (31st), where banking system stability exhibits a particularly poor performance (45th). The Netherlands scores high across all three of the financial intermediation pillars: financial markets (8th) and banking and non-banking financial services (2nd and 9th, respectively). Within these pillars, the size of the Dutch banking system (3rd) is an apparent strength, as is the robust nature of Dutch equity and bond markets (1st and 2nd). In addition to financial stability, a second area in need of improvement exists in the financial access pillar, where the Netherlands performs relatively poorly on measures of commercial access (35th). Neighboring Belgium has a weaker score in nonbanking financial services (23rd), but outperforms the Netherlands in financial stability (19th) and financial access (3rd). Belgium’s strong standing in the latter pillar particularly reinforces its overall rank of 10th place. Switzerland ranks 8th in the overall Index, with notably strong scores in business environment and financial markets. Although the country feels the effects of the recent crisis, it nonetheless performs very well with respect to overall financial stability (5th). Potential areas of improvement within the Swiss institutional environment include contract enforcement and the extent of financial sector liberalization. Robust equity (2nd) and foreign exchange (5th) markets drive Switzerland’s strong performance in the financial markets pillar (3rd). The size of its banking system is another source of strength (7th), although opportunities for improvement
19
1.1: The Financial Development Index 2010
20
exist in its efficiency (23rd) and the degree of financial disclosure (42nd). France maintains its 11th place in the FDI, with solid scores across most of the pillars. Its financial markets take 7th place, with clear advantages across derivatives (1st), bonds (6th), and, to a lesser extent, foreign exchange (9th). The country performs less well in banking financial services (23rd), primarily pulled down by the smaller size of its banking sector and the more limited extent of financial information disclosure. France’s financial system shows a relatively high degree of stability through the recent crisis, yielding an 11th-place ranking in this pillar. Corporate governance (23rd) represents one area for development within France’s institutional environment, while the country’s business environment displays relative weaknesses in the cost and time involved in registering property (44th and 53rd). Sweden (12th) and Norway (15th) show similarity in their profiles with respect to strength in their institutional and business environments, as well as in financial access. The countries diverge in the area of financial stability; Norway achieves a ranking of 8th place in this pillar, bolstered in particular by a lower risk of sovereign debt crisis, while Sweden emerges at 27th place for financial stability—weaknesses in the stability of Sweden’s banking system (43rd) primarily drive the country’s standing in this pillar. Germany falls by one rank to 13th place in this year’s Index, a decline driven mainly by weakened financial stability (24th). Banks in Germany continue to face challenges with respect to efficiency, scoring a relatively low 32nd place in this measure. In contrast, the country displays strength in its financial markets, ranking 10th in this pillar. Additional areas of strength are seen in Germany’s institutional and business environments, specifically financial sector liberalization (1st) and infrastructure (4th). Potential development areas include foreign direct investment relative to GDP (50th) and easier access to credit (49th). Germany’s equity markets (24th) could also be further strengthened. Neighboring Denmark takes 16th place, a drop of six places that is accompanied by a decline in its overall score. The country’s institutional (4th) and business (6th) environments are advantages, driven primarily by solid scores in issues of regulation and governance as well as infrastructure. Performance across the financial intermediation pillars is less strong, with limited IPO activity (49th) and Danish banks demonstrating an area for improvement in their degree of financial information disclosure (52nd). Austria and Finland follow each other in the rankings once again this year, at 19th and 20th places. Both countries achieved high scores in their institutional and business environments, and display weaknesses with respect to non-banking financial services. Austria’s 40th ranking in this pillar is driven heavily by relatively low securitization activity (46th), while Finland’s performance in
this pillar (35th) is particularly affected by limited IPO activity (48th). Italy falls four positions in the rankings to 25th place this year, although this is accompanied by only a slight decline in its overall score. Its financial markets, particularly its bond markets (7th), are an area of relative strength, while its disadvantages include issues of corporate governance (53rd), contract enforcement (53rd), and a relatively high risk of sovereign debt crisis (45th). Italy’s level of financial access (25th) is fairly consistent with its overall ranking, although this consistency does not appear across the access subpillars; the country’s positive retail access to capital (11th) contrasts greatly with its very limited commercial access (54th). The Czech Republic re-establishes itself at the top of the Eastern European countries covered by the FDI, achieving 33rd place with a uniform performance across most of the Index pillars. The Czech banking system exhibits a notable degree of efficiency (17th) and financial information disclosure (19th). Ukraine maintains its standing as the lowest-ranked Eastern European country in the Index, although it does experience a slight increase in overall score. Opportunities for improvement exist across most aspects of its institutional environment (55th) and financial stability (55th). A relatively high level of securitization activity (12th) emerges as a benefit. The Russian Federation maintains its 40th rank in the FDI, but demonstrates clear advantages in nonbanking financial services, including M&A (9th) and securitization (4th) activity. The relatively small size of Russia’s banking system combined with a significant level of inefficiency continue to pull down the country’s standing in the banking financial services pillar. Other areas in need of further development are seen across much of its institutional environment (53rd) and in financial access (54th).
ASIA AND THE PACIFIC
Countries in the Asia and Pacific region again show a high degree of variation across the FDI rankings. Hong Kong SAR establishes itself as the highestranked economy in this region, achieving an overall ranking of 3rd in the Index. The economy shows strengths across its institutional and business environments (10th and 3rd, respectively), as well as in the stability of its financial system (2nd). Commercial access to capital represents another area of advantage where Hong Kong achieves top standing and bolsters its 2nd-place ranking in the associated pillar, financial access. While Hong Kong’s banking system is quite large and efficient, the extent to which banks disclose financial information (23rd) could be improved. The economy’s score in nonbanking financial services is negatively affected by limited securitization activity (30th). In contrast to Hong
evident in its continued 12th-place ranking in the banking pillar; a notable level of financial disclosure is a key contributor to its standing here. Less-developed derivatives and foreign exchange markets are potential areas of improvement for Malaysia’s financial markets (25th), although the country’s well-developed equity and bond markets (15th and 16th) are a source of strength. An evaluation of financial access in the country presents a divergent picture at the subpillar level, where robust commercial access to capital (9th) stands in contrast to more limited retail access (25th). In similar fashion to Malaysia, China (22nd) also sees a notable rise in its standing in the FDI, moving up by four positions. A limited degree of financial sector liberalization (43rd) serves as a weakness in China’s institutional environment, while the country’s business environment is particularly hampered by relatively poor infrastructure (47th). A highly stable currency and low risk of sovereign debt crisis contributes to the stability of China’s overall financial system (17th), despite a very poor showing by the country’s banks with respect to stability (50th). It is worth noting that implicit or explicit government guarantees are not considered as part of this measure. China’s non-banking financial services also display strength across insurance (5th), IPO (1st), and M&A (6th) activities; however, securitization activity (45th) represents one area for further development. Despite its proximity to China, neighboring Kazakhstan (49th) displays a differing set of strengths and weaknesses than China. The country’s institutional environment (50th) and financial stability (49th) are weak but a relatively low cost of doing business (16th) serves as a bright spot in its business environment. Further, Kazakhstan’s non-banking financial services are bolstered by considerable IPO and securitization activities. Despite a slight increase in score, Korea declines in the FDI by one position, assuming a ranking of 24th. The country’s non-banking financial services provide one clear advantage, driven by a sound insurance sector (7th) and robust securitization activity (3rd). Korea’s institutional environment (34th) is impacted by drawbacks in corporate governance (42nd). In contrast, the country’s fairly well developed business environment (19th) is bolstered by the existence of solid infrastructure (8th). Other key strengths include a healthy pool of human capital, supported by a high tertiary enrollment rate (1st) and quality of math and science education (9th). Nonetheless, these competitive advantages are not fully reflected in financial access, as commercial access to capital in the country remains severely constrained (51st). Thailand (34th) continues to display consistency in its performance across most of the Index pillars. This year, the most salient shortcoming for Thailand’s financial system is its weak score in non-banking financial services (49th), the result of very low levels of securitization
1.1: The Financial Development Index 2010
Kong’s healthy equity and foreign exchange markets, bond market development remains relatively undeveloped and represents an additional area for improvement. Singapore follows Hong Kong in the rankings, maintaining its 4th-place ranking this year. In similar fashion to Hong Kong, Singapore demonstrates a strong performance across the pillars pertaining to factors, policies, and institutions. In particular, the country achieves top standing with respect to institutional environment, an achievement mainly driven by effective contract enforcement (1st) and a sound handling of legal and regulatory issues (2nd). As is true in Hong Kong, banks in Singapore are fairly sizeable (11th) and efficiently operated (1st), but can improve upon the extent to which they disclose financial information (33rd). Bond markets (22nd) represent an area for further development within Singaporean financial markets. Singapore has a high level of commercial access to capital (2nd), while retail access (15th) is more limited. Australia’s rank falls three positions to 5th place in the FDI, accompanied by a drop in its overall score. This decline is driven primarily by worsened performance in the areas of taxation (20th) and currency stability (42nd). Specific disadvantages in these two areas include high marginal tax variation (30th) and a negative current account balance relative to GDP (49th). Nonetheless, these weaknesses are countered by the country’s continued strength in financial intermediation. Australia achieves solid scores in banking (7th) and nonbanking (8th) financial services. The country’s financial markets are also quite robust, although a less-developed bond market serves as one weak spot in this pillar. Australia’s top performance in retail access to capital (1st) is accompanied by a fairly high level of commercial access to capital (11th), enabling Australia to achieve the greatest level of overall financial access in the Index. Japan holds on to its 9th-place ranking in the Index for a second year. The country’s overall performance is driven primarily by strong results in financial intermediation. Japan’s banks are sizeable and relatively efficient, bolstering its 5th place in the banking financial services pillar. Similar strengths are seen across nonbanking financial services such as M&A activity (4th) and insurance (2nd). Financial stability represents a disadvantage for the country, where a less stable banking system (39th) and a fairly high risk of a sovereign debt crisis (28th) pulls down the country’s score in this pillar. Commercial access to capital continues to not fully reap the benefits of Japan’s strong financial intermediation, as shown in the country’s ranking at 36th in this subpillar. Malaysia (17th) rises an impressive five spots this year, bolstered by significant increases in its scores within financial stability (3rd) and non-banking financial services (18th). Malaysia’s top standing in currency stability, accompanied by a fairly stable banking system, serves as the foundation of a stable financial system (3rd). Malaysia’s strength as an Islamic banking center remains
21
1.1: The Financial Development Index 2010
22
(54th) and M&A (42nd) activities. The stability of Thailand’s currency (8th) stands out as one particular competitive advantage, although this is largely offset by a less stable banking system (40th) and a fairly high risk of a sovereign debt crisis (32nd). The size of Thailand’s banking system (22nd) is partly countered by its lack of efficiency (34th) and limited disclosure of financial information (37th), demonstrating two additional areas in need of improvement for the country. Within financial markets, the development of its bond markets (19th) is an additional area of strength. Despite a slight decrease in overall score, India rises one position in the Index to 37th place this year. The country remains strong in non-banking financial services (13th), where it demonstrates significant IPO activity (4th) and a well-developed insurance sector (8th). Robust derivatives (13th) and foreign exchange (13th) markets yield India’s relatively sound performance in financial markets (24th). The country’s institutional environment (51st) continues to be considerably weakened by a low level of financial sector liberalization (54th) and also by a poor degree of contract enforcement (52nd). India’s business environment (52nd) is hindered by an acute absence of adequate infrastructure (56th), a high cost of doing business (52nd), and issues surrounding the administration of taxes (49th). These areas of difficulty translate into highly constrained financial access, a difficulty particularly evident in the case of retail access to capital (43rd). Vietnam (46th) experiences the reverse of India’s movement in the Index, falling one place in the rankings despite a slight increase in overall score. The country’s banking system encompasses some areas of relative strength, performing fairly well with respect to size (24th) and efficiency (35th) measures. Commercial access to capital is a competitive advantage that drives Vietnam’s 18th position in the overall financial access pillar. The Philippines (50th) maintains its ranking in the Index this year, but demonstrates an improvement in its scores across most of the FDI pillars. It continues to benefit from a relatively high degree of currency stability. The country has made strides with respect to financial intermediation, and its performance here is particularly driven by a fairly high degree of M&A (25th) and securitization (20th) activities, as well as relatively well developed bond markets (20th). Further improvement is necessary in order to fully translate these strengths into broad financial access (50th). Indonesia (51st), Pakistan (54th), and Bangladesh (55th) round out the Asian countries in the FDI, all falling within the bottom 10 countries of the Index. All three face challenges across much of their respective business environments, weighing down their performances in this pillar. Indonesia and Bangladesh fare better than Pakistan with respect to financial stability, with the first two countries achieving ranks of 36th and 30th, in
contrast to Pakistan’s 52nd place. This trend in performance also emerges in measures of financial access, with Indonesia and Bangladesh both showing broader access to capital in their financial systems than Pakistan (55th). Further bright spots in the financial system of Indonesia are the country’s significantly stable currency (6th) and a fair degree of IPO (19th) and securitization activities (28th). Despite Pakistan’s previously mentioned challenges in financial stability, the country does demonstrate a relatively stable currency (27th) and banking system (23rd). Bangladesh displays notable strength in its level of retail access to capital (20th), mainly attributable to the high penetration of microfinance lending in its financial system.
LATIN AMERICA
At 30th place, Chile achieves the highest score of any Latin American country in the overall Index, moving up one spot from its 31st-place ranking last year. It continues to score very well in the financial stability pillar (7th), which is anchored by a high degree of banking system stability (2nd). Its solid scores across the institutional (27th) and business (31st) environment pillars represent consistent scores across corporate governance (21st), contract enforcement (24th), taxes (27th), and human capital (26th) indicators. Financial intermediation remains relatively weak in Chile, particularly in financial markets (44th) and non-banking financial services (37th), where diminished IPO and securitization activity pull it down. Commercial access to capital is a notable strength (8th), contrasting with its relatively poor access to retail financial services. Brazil moves up in the rankings two spots to reach 32nd place. Financial stability (10th) is a key strength for Brazil; this is underpinned by robust currency and banking system stability, but it contrasts with the country’s relatively higher risk of sovereign debt (42nd). Nonbanking financial services is also an advantage for Brazil, where it ranks 12th. A high degree of IPO activity is a key driver of this result, as are, to a lesser extent, healthy insurance markets and M&A activity. Inefficiency within Brazil’s banking system pulls down its score here (38th). Despite Brazil’s financial stability, its institutional environment does not perform as well (44th)—this is weakened in particular by legal and regulatory issues such as its extremely high burden of government regulation (57th), lack of trust in politicians (52nd), and poor protection of legal rights (50th). Its business environment (48th) has a poor showing as well, exhibiting a high cost of doing business compounded by a burdensome and distortive tax regime (52nd). Panama’s rank drops significantly this year, from 29th to 39th place. A fall in the country’s score with respect to financial access from 17th to 32nd contributes to this decline, which resulted in particular from lower
to both countries taking the two lowest scores in financial access.
MIDDLE EAST AND NORTH AFRICA
At 21st, the United Arab Emirates scores the highest of all Middle Eastern and North African countries in the FDI, falling one notch from the previous year. Its 6th-place ranking in financial stability is driven by the stability of its banking system (4th), offsetting its weaker scores for the risk of sovereign debt crisis (29th) as manifested particularly in credit default swap spreads (46th). The institutional (23rd) and business environments (21st) are advantages, with solid scores across a number of measures such as legal and regulatory issues (20th), corporate governance (20th), and infrastructure (25th). The tax regime (6th) is also especially favorable, as it poses little administrative burden and has few distortive effects. The United Arab Emirates has solid scores in most areas of financial intermediation, though financial disclosure appears to be a weak point (41st). Financial access is quite strong for both corporate (10th) and retail (12th) end-users. Bahrain comes in at 23rd in the FDI, rising four places since 2009. Similar to the United Arab Emirates, its business environment (14th) is a strong advantage, with a highly favorable tax regime (1st) and a low cost of doing business (10th). An increase in financial stability (23rd) is a key contributor to its increase in the overall score, particularly in the areas of banking system stability (3rd) and risk of sovereign debt crisis (22nd). This contrasts a relatively low score for currency stability. In addition to being stable, its banking system is fairly efficient (14th), though financial disclosure could be better (36th). Non-banking financial services (38th) and financial markets (42nd) do not perform as well, which corresponds to the difficulty that firms have in obtaining financing through local equity markets (35). The ability of firms to access capital through loans (1st), private credit (12th), and foreign direct investment (11th) appears to offset this difficulty, resulting in a commercial access score of 6th place. The financial system of Saudi Arabia earns it 26th place in the FDI and demonstrates some similarities to those of Bahrain and the United Arab Emirates. It is highly stable (1st) across its banking system (1st) and currency (5th), with a low risk of sovereign debt crisis (6th). Similar to its neighbors, it has a healthy business environment both in terms of its tax regime (5th) and low cost of doing business (9th). However, it lags in terms of human capital (33rd) and infrastructure (34th). Its non-banking financial services (54th) performance is particularly weak across IPOs, M&A, insurance, and securitization. Its banks are not particularly large (37th) and its financial disclosure is relatively weak (43rd).
1.1: The Financial Development Index 2010
retail access to financial services (39th). By contrast, Panama scores well with respect to commercial access, coming in at 5th place. Diminished performance in financial stability is precipitated by weaker scores in banking system stability (25th) and low scores in capital adequacy (39th) and the financial strength of banks (41st). Outside of stability measures, however, Panama scored quite well in banking financial services (25th), a result that stems from the size (18th) and efficiency (27th) of its banks. Mexico maintains the same rank as last year, 43rd place, with scores that do not change significantly across the seven pillars of the Index. Financial stability (15th) remains a crucial strength, particularly in terms of banking (12th) and currency (17th) stability. However, although Mexico’s banking system is stable, it still does poorly in terms of size (53rd) and efficiency (50th). Its financial markets performed only marginally better, with strength in its foreign exchange (23rd) contrasting with its relatively weaker equity markets (47th). Related to this, commercial access to capital appears to be a weak point (52nd) while retail financial access appears strong (23rd). Legal and regulatory issues and corporate governance remain major constraints to the development of Mexico’s institutional environment (48th). Colombia and Peru come in 47th and 48th in the rankings, respectively. Like many other Latin American countries, Peru demonstrates a high degree of financial stability (20th); Colombia’s performance in this area is not as high (34th). The low cost of doing business in Colombia (19th) contributes to a relatively strong business environment (36th), and heightened IPO activity buoys its performance in non-banking financial services (25th). In most of the other dimensions of the Index— including financial markets (54th for Colombia and 51st for Peru), banking financial services (Columbia at 49th and Peru at 47th), and the ability of companies and consumers to access capital and financial services (Colombia at 47th and Peru at 44th)—neither Columbia nor Peru score particularly well. Argentina and Venezuela round out the Latin American rankings with 52nd and 56th place, respectively. The legacy of banking system instability and sovereign debt crises continues to weigh heavily on the stability of Argentina’s financial system (54th). Venezuela performs better with respect to financial stability (40th), but its low performance in all other dimensions of the Index indicate that this may be the result of the lack of dynamism in its financial system. Non-banking financial services (25th) is a bright spot for Argentina, stemming in part from a high degree of securitization activity (7th). Issues such as corruption, poor protection of property rights, and inadequate economic policymaking contribute to poor institutional environments in both Argentina (52nd) and Venezuela (57th). An inability of businesses to access various forms of financing contributes
23
1.1: The Financial Development Index 2010
24
Despite these drawbacks, corporate end-users report an ease of access to nearly all forms of financing. Israel demonstrates generally solid scores across all pillars of the Index to earn its ranking of 27th place in the FDI. Its solid performance in its institutional environment (19th) is consistent with similar scores in component subpillars, such as corporate governance (25th) and legal and regulatory issues (19th). Its business environment is less strong (33rd), pulled down in particular by a high cost of doing business. While low levels of securitization (55th) and M&A activity are a drag on its non-banking financial services score (31st), commercial access to financial services remains relatively strong (21st); the availability of venture capital is a particular strength (8th). In contrast to Israel, Kuwait (28th) shows a bit more variation in performance across the pillars in the Index. Currency stability and a low risk of sovereign debt crisis underpin a strong score in financial stability (18th). The country’s institutional environment is less favorable (37th), and is compromised by issues such as fairly weak corporate governance (39th), uncoordinated economic policymaking (49th), and a lack of domestic financial sector liberalization (41st). Its equity markets appear robust (12th), but non-banking financial services such as insurance (55th) scored near the bottom of the entire Index. Jordan drops four places in the FDI this year, to 29th place, from the result of lower scores in several pillars. A decline in the relative efficiency of its banks reduces its banking financial services score to 26th place, down 11 places from 15th place last year. Its business environment (43rd) also deteriorates somewhat in areas such as taxation (33rd) and human capital (40th). Declining scores in financial intermediation parallel a significant drop in commercial access (20th). The availability of data this year for certain variables that were not included last year—such as life insurance and access to ATMs—exerted some downward pressure on scores in these pillars. The two North African countries covered in the FDI, Egypt and Morocco, score similarly in the FDI this year, at 38th and 41st place, respectively. Egypt’s financial stability advances from 45th place last year to 35th this year, a result driven especially by gains in currency and banking system stability. This is balanced by an opposite decline in financial access, from 11th to 21st place, as firms report increased difficulty in obtaining loans and private credit. Morocco was added to the FDI this year. Although its institutional environment is weak (40th), its financial system is stable at 16th place. Its financial markets (45th) and non-banking financial services (42nd) are not particularly strong, but its banks are efficient (22nd) and relatively large (26th) in relation to GDP.
SUB-SAHARAN AFRICA
South Africa is one of two sub-Saharan African countries covered in the Index. It advances one spot in the FDI this year, to reach 31st place. The strength of its insurance sector, particularly life insurance coverage and density, contributes to the healthy performance of its non-banking financial services sector (19th). Its banks (31st) and financial markets (27th) also show solid scores, an outcome in line with the country’s overall score. On the strength of its financial intermediation, commercial access is reported to be good (21st), yet retail access measures are not as robust (37th). South Africa’s business environment is also an area of weakness, particularly in areas such as human capital (52nd) and infrastructure (49th). The second sub-Saharan African country represented in the Index, Nigeria, comes in lowest of all countries, at 57th place. Commercial access to financial services (31st) is an area of strength for the country, particularly with its very strong foreign direct investment (5th). There are also some bright spots in its institutional environment, notably the openness of its financial sector (34th) and contract enforcement (39th). However, corporate governance (52nd) and legal and regulatory issues (51st) weigh down its performance here, and its business environment overall is considered extremely poor (56th). It is worth noting that data availability issues affect the composition of variables contributing to Nigeria’s financial stability score, a circumstance that contributes to its drop in score in this area.
Conclusion Given the depth of the recent financial crisis, it is tempting to view financial development in terms of preventing the harmful effects of financial instability. However, financial development must be viewed more broadly in order to identify and address weaknesses across the broader dimensions of financial systems that could be the greatest threats to economic growth in the years ahead; this includes the need to provide long-term financing for infrastructure development, to improve local bond markets so that they are a consistent source of capital for all segments of the economy, and to improve retail financial access as an enabler of consumer demand. While acknowledging the importance of financial development for sustained global economic growth, we must recognize that improvements must come at the local level through the rigorous prioritization and implementation of reforms. The Country Profiles and Data Tables in this Report contain a wealth of data that can be a useful starting point to inform this analysis. These data are presented within a transparent and comprehensive framework that encourages breadth of analysis within countries and the benchmarking of performance across them. The
Notes 1 Eichengreen et al. 2009. 2 Rajan 2010. 3 Khan and Senhadji 2000. 4 Schumpeter (1912) 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. 5 For a detailed review of the literature on finance and growth, see Levine 2004. 6 Kannan 2010.
28 De la Torre et al. 2010. 29 Rojas-Suarez 2003. 30 Goldsmith 1969. 31 Ito and Chinn 2007. 32 Levine 2004. 33 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. 34 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. 35 Rajan and Zingales 2001. 36 Levine 1997, 2001. 37 Barth et al. 1999. 38 Vittas 1998. 39 Demirgüç-Kunt and Levine 2001. 40 Noyer 2006. 41 Lin 2007. 42 Carmichael and Dissou 2000. 43 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).
7 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.
44 Arestis et al. 2001.
8 Michalopoulos et al. 2009
47 See http://imf.org/external/np/speeches/2007/082207.htm.
9 Feyen 2009.
48 Beck et al. 2006.
45 Demirgüç-Kunt and Levine 2001. 46 Fink et al. 2003.
10 Levine 2004.
49 De la Torre et al. 2006.
11 La Porta et al. 1997, 1998b, 1999b,; Levine 1998, 1999; and Barth et al. 1999.
50 Ayyagari et al. 2007.
12 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. 13 Siklos 2010. 14 La Porta et al. 1997; King and Levine 1993. 15 Schleifer and Vishny 1997. 16 Tavares 2002. 17 Galor and Zeira 1993. 18 Fitzgerald 2007. 19 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 2003 found the relationship to be ambiguous. 20 De la Torre et al. 2008.
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framework is necessarily limited by the data that are available for the countries covered in the Index and its findings should be scrutinized and where appropriate, challenged. However, we believe the advantages of bringing together such a comprehensive amount of data in a structured and accessible way far outweigh these limitations. We hope that this Report broadens and sharpens the perspective of those who are working to harness the full potential of financial systems to promote global economic growth and individual welfare.
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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. Michalopoulos, S., L. Laeven, and R. Levine. 2009. “Financial Innovation and Endogenous Growth”. NBER Working Paper No. 15356. Cambridge: National Bureau of Economic Research. 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. Quinn, .D. P. and A. M. Toyoda. 2008. “Does Capital Account Liberalization Lead to Economic Growth? An Empirical Investigation.” The Review of Financial Studies 21 (3): 1403–49. Rajan, R. G. 2010. Fault Lines: How Hidden Fractures Still Threaten the World Economy. Princeton: Princeton University Press. Rajan, R. G. and L. Zingales. 2001. “The Great Reversals: The Politics of Financial Development in the 20th Century.” NBER Working Paper No. 8178. Cambridge: National Bureau of Economic Research.
1.1: The Financial Development Index 2010
———. 1998a. “Law and Finance.” Journal of Political Economy 106: 1113–55.
27
1.1: The Financial Development Index 2010
28
Appendix A: Structure of the Financial Development Index 2010 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 indicators from sources other than the Executive Opinion Surveyused 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 of these 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 economy with standardized scores above the average 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
financial markets pillar, a 30 percent weight was assigned to 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
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 C. Legal 1.11 1.12 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 Strength of legal rights index Central bank transparency
D. Contract enforcement...................................25.00% 1.21 Effectiveness of law-making bodies 1.22 Judicial independence 1.23 Irregular payments in judicial decisions 1.24 Time to enforce a contract 1.25 Number of procedures to enforce a contract 1.26 Strength of investor protection index 1.27 Cost of enforcing contracts
4th pillar: Banking financial services...............14.29%
2nd pillar: Business environment ......................14.29%
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
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 on competition 2.09 Marginal tax variation 2.10 Time to pay taxes 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
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
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 Life insurance density 5.08 Non-life insurance density 5.09 Real growth of direct insurance premiums 5.10 Life insurance coverage 5.11 Non-life insurance coverage 5.12 Relative value-added of insurance to GDP D. Securitization.................................................25.00% 5.13 Securitization to GDP 5.14 Share of total number of securitization deals
3rd pillar: Financial stability...............................14.29% A. Currency stability ..........................................30.00% 3.01 Change in real effective exchange rate (REER) 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 Aggregate measure of real estate bubbles 3.10 Financial Stress Index 3.11 Tier 1 capital ratio 3.12 Output loss during banking crises C. Risk 3.13 3.14 3.15 3.16 3.17
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
1.1: The Financial Development Index 2010
Appendix A: Structure of the Financial Development Index 2010 (cont’d.)
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.)
29
1.1: The Financial Development Index 2010
Appendix A: Structure of the Financial Development Index 2010 (cont’d.) D. Bond 6.13 6.14 6.15 6.16 6.17
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 Local currency corporate bond issuance to GDP
7th pillar: Financial access.................................14.29% 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 Microfinance institution (MFI) borrowers’ penetration rate
Notes 30
1 See Browne and Geiger 2009. The standard formula for converting hard data is the following:
(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 1-to-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.
Financial Development, Capital Flows, and Capital Controls HOWARD DAVIES, London School of Economics MICHAEL DREXLER, Barclays Capital
Of globalization’s many features, capital flows are among the most controversial and least clearly understood. A great deal of good academic work has gone into the subject, and yet there is no conclusive agreement on their universal benefit or harm. This is little consolation to policymakers and industry practitioners who have to work with both the beneficial aspects and the potential dangers of global capital flows. We therefore offer a practical view here to complement the body of academic research. After an overview of capital flows and their potential benefits and dangers, this chapter is split into two major parts. The first part discusses development of local financial markets and suggests measures from the Financial Development Index that can be helpful in assessing the vulnerability of a local economy to speculative flows. Although it is by no means an exact science, this assessment should give policymakers and private actors suggestions on where to look for potential fault lines. The second part of the chapter offers a decisionmaking framework that can be used when a local economy is affected by excessive capital flows to the unfortunate extent that policymakers see no other option than to consider capital controls. While we would not endorse such measures per se, it is clear to us that in practice there may be circumstances in which they are the least bad option. In such a case, we would advocate that measures be implemented in a rational and deliberate way rather than in the haphazard fashion that has often be seen hitherto.
Overview Capital flows have long been a debated feature of globalization. According to classic economic theory, they go hand in hand with efficient resource allocation, flowing from developed economies (which have a capital surplus) to developing markets (which have a surplus of investment opportunities). In developing markets, they enable the financing of projects with a high marginal return that foster future economic growth, thus benefitting the world economy as a whole as well as the local economy. However, it is hard to reconcile this theoretical picture with economic reality. The private inflows to emerging and developing economies shown in Figure 1 demonstrate clear evidence of “animal spirits” at work1—both in 1998–2002 when the dot-com bubble crowded out emerging-market investments and in 2003–07 when an increasing amount of global surplus capital was looking for attractive yield. The picture gets even more complicated when looking at subsets of the data, as evident in Figure 2, which depicts only private flows to developing markets in Asia. The well-studied reversal of private flows during the Asian crisis is clearly evident. However, even direct
1.2: Financial Development, Capital Flows, and Capital Controls
CHAPTER 1.2
31
700
600
500
US$ billions
1.2: Financial Development, Capital Flows, and Capital Controls
Figure 1: Historical development of emerging market capital flows
400
300
200
100
0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(f)
Net private inflows to emerging and developing economies
Source: IMF World Economic Outlook Database, August 2010.
32 investment, long held up as a steady source of “good” flows, shows extraordinary growth in the years 2005–08 and then contracts to half its 2008 value one year later. It is almost certain that this decrease will not have been caused by a sudden lack of decent investment opportunities in the region. Research has also found that capital has recently flowed in the opposite direction from that forecast by classic theory—that is, capital flows have gone from emerging economies, such as China and the Middle East, to developed markets such as the United States. In the process, the flows have inflated asset bubbles and, according to some commentators, played a significant role in the recent financial crisis.2 Finally, the orthodox economic view is further challenged by the lack of a conclusive causal link between capital account liberalization and economic development.3 While many authors agree that an open capital account affords some benefits (potentially of a secondary or collateral nature), it is clearly not the panacea for economic welfare that classic theory would suggest. Beyond economic fundamentalism
Setting aside the theoretical debate, it is clear that capital flows are a feature of a globalized economy, and that they offer a priori benefits worth preserving. They allow investors to express an opinion on a global portfolio of opportunities, and therefore promote price discovery and the long-term allocation of resources (short-term
animal spirits notwithstanding). The more transactional financial flows facilitate trade and payments, the more they enable what has been recently termed the “real economy” on a global basis. Finally, by way of lending, they can provide liquidity and financing where needed— augmenting the work of governments and the multilateral institutions that would otherwise have to carry out this function alone. So, accepting that capital flows are an integral part of the global economic system as we know it, the question becomes one of how to harness their inherent positives (as outlined in the previous paragraph) while mitigating their potential negatives. While we acknowledge the relevance of global imbalances and related capital flows to the recent crisis—particularly their role in creating bubbles in some developed economies (mostly centered around real estate)—we consider this to be less pertinent in the context of this Report. By definition, and evidenced by their scores, those economies do not face a development challenge that could be disrupted by capital flows. Both their size and their regulatory framework enable them to deal with potentially destabilizing bubbles should they choose to. The impact of capital flows on developing economies
We are therefore more concerned with the effects that private capital flows can have on smaller economies that are still in development. A country with a GDP of less than US$30–40 billion, such as Cambodia or Latvia,
200 150
n Direct investment, net n Other private financial flows
US$ billions
100 50 0 –50 –100 –150
1.2: Financial Development, Capital Flows, and Capital Controls
Figure 2: Historical development of private flows to developing Asia
–200 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011(f)
Private financial flows to developing Asia
Source: IMF World Economic Outlook Database, August 2010.
33 could easily be overwhelmed by the concerted actions of only a few investors. It is this problem that should be of most concern when thinking about financial development, as such action could seriously damage a local market for years if not decades, causing significant economic hardship in the process. The World Economic Forum has convened the Global Agenda Council on Global Investment Flows to discuss this particular issue. Council members represent the private sector, academia, and the public/not-forprofit sector.4 While the Council’s work and deliberations over the last two years were instrumental in creating this chapter, it does not necessarily represent the opinion of every Council member (or their institutions).
Capital flows and financial development It is clear that capital flows can have an enormous impact on financial development. This section will explore a framework for how economies can assess vulnerabilities to the negative aspects of capital flows. Rational defenses against imported irrational exuberance
Capital flows that are large with regard to a local economy generally bring three dangers: • inflation of bubbles (this is generally linked to hard assets such as property, but also company valuations)
that lead to inefficient allocation of resources or a lack of economic discipline, • currency mismatches, and • maturity or liquidity mismatches. It is the latter two that cause the most dramatic dangers. One need look no further than the Asian crisis of 1997 or, more recently, the experiences of countries such as Hungary. The “hot” foreign money is welcome at first, as it comes on cheaper terms than the historical cost of capital in the local economy.5 Often at this stage, the potential future traps are either overlooked or rationalized away (for example, currency risk is ignored because of a perceived convergence or a “bulletproof ” peg). Only at a later stage, when flows materially change, do the dangers come to the fore. At that stage, a buildup of systemic risk often compounds the issue, and an implicated banking system might need rescue. This exacerbates the already-considerable strain on both local economy and government finance and default becomes a possibility, with the specter of a significantly higher cost of funds for a long time to come. Economic development, seemingly turbo-charged through the period of hot money inflows, is now impaired for the long term. In principle, the remedies against the dangers outlined above are not complex, and they are well documented by both reason and empirical research. These include:
1.2: Financial Development, Capital Flows, and Capital Controls
Figure 3: Suggested sequence to building resilience against excessive capital flows
Vigilant and competent regulator
Strong local investor base
Well-developed local credit markets
• deep local asset markets (e.g., equity, real estate) with appropriate macro-prudential supervision to mitigate boom-and-bust cycles, particularly where excessive credit extension is concerned; • deep local currency markets, both spot and derivatives, to allow for hedging and sterilization of foreign currency exposures; and
34
• well-developed local debt markets, offering depth across the whole yield curve (to combat excessive buildup of short-term debt). Depth in local currency bonds is particularly preferable, as it prevents currency mismatches and also takes lending off banks’ balance sheets. Of course, this is a wish list, and many developing economies will be lucky if they have only one of the three mitigants in place. There are two major underlying “off-market” ingredients: strong local investors, who have the appetite to participate in these markets, thereby creating depth; and a good regulator who monitors participants’ use of the markets for hedging rather than excessive speculation. (According to many credible accounts, the major fault line that preceded the Asian crisis was excessive risk appetite in the respective economies’ private sector, which then overwhelmed otherwise relatively soundly run sovereigns.) In summary, it would seem that maturity/liquidity mismatches are probably the most disastrous for an economy under a sudden reversal of flows, followed by currency mismatches (which can bring on inflation/ deflation and seriously cripple an economy). The bursting of asset bubbles is of course also painful, but—as long as leverage has been kept in check—this will not affect an economy as endemically as the previous two issues. Figure 3 summarizes our thinking in graphical form. It is interesting that many emerging economies first try to create strong local equity markets and neglect credit and currency markets, thereby making themselves
Deep local currency markets
Other asset markets
more vulnerable to the detrimental effects of hot money. Even worse, they may attract the first wave of speculative money through their highly visible equity markets. The usual sequence of events for such markets is that speculative money first drives up the local stock market; once valuations have become exorbitant, it seeks other routes to get exposure to the local economy—frequently through foreign-denominated high-yield debt at short maturities (as was the case in the Asian crisis). That debt, in the absence of local bond markets, is channeled through local banks, which—conveniently for foreign investors—carry an implicit guarantee because of their systemic nature in the economy. Systemic risk thus accumulates, which can ultimately bring down the whole economy as flows reverse. When things go smoothly, however, there is some academic evidence that liberalized equity markets can add a full percentage point to economic growth.6 We emphasize, however, that developed non-equity capital markets would not impede those positive effects but rather add significant downside protection. The sequencing described here may not apply in all circumstances, and a more nuanced view might be necessary for individual markets, as addressed in the work of de la Torre and Schmukler,7 among others. However, until a better alternative is agreed upon, we propose this sequence as a “base case” that countries can then adapt on the basis of their unique circumstances. The strength of the Financial Development Index outlined in this Report, from this perspective, lies in its ability to help economies assess their resilience to excessive capital flow episodes. With the exception of the qualitative assessment of the regulator, all the other four categories previously explained have associated metrics in the Index. Table 1 maps them out. Putting the framework outlined in Figure 3 crudely into practice, we follow a two-step approach. We aggregate the first three measurable resilience categories into a combined defensive score,8 and map this against an economy’s GDP. If the GDP is small (hence the local economy can easily be overwhelmed by determined
Category
Strong local investor base
Corresponding metrics in the FDI
4th pillar: Banking financial services 4.03 Financial system deposits to GDP 4.06 Bank deposits to GDP 7th pillar: Financial access 7.01 Financial market sophistication 7.02 Venture capital availability
Well-developed local credit markets
4th pillar: Banking financial services 4.05 Private credit to GDP 5th pillar: Non-banking financial services (particularly relevant in absence of bond markets) 5.13 Securitization to GDP 5.14 Share of total number of securitization deals 6th pillar: Financial markets
1.2: Financial Development, Capital Flows, and Capital Controls
Table 1: Financial Development Index metrics mapped against resilience categories
6.13 Private domestic bond market capitalization to GDP 6.14 Public domestic bond market capitalization to GDP 7th pillar: Financial access 7.03 Ease of access to credit (assuming local credit) 7.05 Ease of access to loans (assuming local loans) Deep local currency markets
6th pillar: Financial markets 6.01 Spot foreign exchange turnover 6.02 Outright forward foreign exchange turnover 6.03 Foreign exchange swap turnover 6.07 Foreign exchange derivatives turnover: Currency swaps 6.08 Foreign exchange derivatives turnover: Options
Other asset markets
5th pillar: Non-banking financial services 5.01 IPO market share 5.02 IPO proceeds amount 6th pillar: Financial markets 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 7th pillar: Financial access 7.04 Financing through local equity market
35
1.2: Financial Development, Capital Flows, and Capital Controls
36
Table 2: Details of the defensive strength indicator
2010 FDI data
Defensive GDP strength Investor (US$ billion) score base
Bahrain** Jordan Panama** Slovak Republic* Morocco** Vietnam* Bangladesh* Kazakhstan* Kuwait** Ukraine* Peru* Hungary* Philippines* Romania* Chile* Pakistan** Nigeria* Singapore Egypt** Malaysia** Israel* Czech Republic* Hong Kong SAR Ireland** Colombia* United Arab Emirates Finland** Thailand** South Africa* Denmark Argentina* Venezuela* Saudi Arabia* Austria** Norway** Sweden** Poland* Belgium Switzerland Indonesia* Turkey* Netherlands Korea, Rep. ** Mexico* Australia Russian Federation* India** Canada Spain Brazil** Italy** United Kingdom France Germany China** Japan United States
20 23 25 88 91 92 95 109 111 116 127 129 161 162 162 167 173 177 188 191 195 195 211 228 229 230 238 264 287 309 310 337 370 382 383 405 430 470 495 539 615 795 833 875 997 1,229 1,236 1,336 1,464 1,574 2,118 2,184 2,676 3,353 4,909 5,068 14,256
2.10 3.19 2.83 1.30 2.03 1.99 1.60 1.83 2.32 1.51 1.28 1.43 1.64 1.00 1.80 2.03 1.13 4.31 2.43 2.78 1.95 1.59 4.27 2.63 1.17 3.09 2.18 2.28 1.95 3.32 1.08 1.35 1.78 2.51 2.42 2.45 1.33 3.23 4.21 1.47 1.75 3.76 2.32 1.24 3.78 1.70 2.60 3.93 3.26 2.06 2.60 7.00 3.77 3.61 2.20 4.52 5.36
4.75 4.49 4.32 2.57 3.80 3.05 1.98 1.56 3.11 1.94 1.91 2.33 2.43 1.60 3.24 1.92 1.23 5.69 3.28 5.19 4.58 2.94 7.00 4.10 1.58 4.57 3.64 3.92 3.75 3.73 1.00 1.33 3.05 4.28 5.65 3.72 2.22 4.75 6.52 2.47 2.24 5.78 2.58 1.55 5.04 1.51 3.41 5.68 5.71 3.38 2.90 6.51 3.91 4.81 3.62 5.99 4.35
Local credit markets
Local currency markets
2.50 3.28 2.48 1.72 2.68 2.59 1.51 2.95 2.32 2.97 1.89 2.34 2.39 1.52 2.13 1.69 1.00 3.76 2.43 3.98 1.88 2.30 2.90 3.90 1.86 2.93 2.81 2.58 2.83 4.54 2.14 1.48 2.21 2.95 2.40 3.57 1.71 4.20 3.17 2.09 2.24 5.49 3.08 2.01 3.88 2.71 2.76 4.90 4.85 3.23 4.23 5.29 4.59 3.74 2.34 4.05 7.00
1.12 n/a n/a 1.02 1.30 1.57 n/a 1.77 n/a 1.12 1.17 1.08 1.35 1.00 1.38 2.41 n/a 3.72 n/a 1.45 1.18 1.10 3.47 1.66 1.14 n/a 1.56 1.68 1.15 2.63 1.12 n/a 1.39 1.77 1.31 1.66 1.20 2.23 3.46 1.17 1.65 2.17 2.09 1.20 3.09 1.68 2.32 2.70 1.66 1.31 1.96 7.00 3.25 2.98 1.78 3.82 4.65
Source: The Financial Development Index; authors’ analysis. Notes: * = countries with a defensive strength score lower than 2.00; ** = countries with a defensive strength score between 2.00 and 3.00. Data in blue bold highlight indicator scores lower than 2.00. Because of the re-normalization of each indicator onto a scale of 1–7, the overall defense score will not appear as a straight arithmetic mean of its three constituent scores in this table.
speculators) and the defensive score also small, an economy is at risk from speculative flows. Figure 4 depicts the result of this circumstance, with selected economies highlighted. The shaded rectangle in the figure depicts the area where we would have cause for concern—countries that are small in GDP, but have relatively weak defenses against rapid inflows and outflows of capital by way of their local markets. Table 2 provides the numerical backup for this graph, with countries in the shaded rectangle highlighted according to their relative scores. We have, somewhat arbitrarily, drawn a line at US$500 billion GDP, beyond which we consider it less likely for an economy to be overwhelmed by volatile capital flows. Of course, this somewhat crude measure does not mean that a country is either necessarily about to come under speculative pressure or that there are no mitigating factors in its local economy should this happen. A country such as Saudi Arabia is a good case in point— despite relatively weak defenses as measured by our score, the cash generated by its oil wealth would be likely to protect it from the effects of hot money. Nevertheless, the defensive strength indicator score should spark a constructive debate about some economies’ vulnerabilities. It is particularly those economies with a relatively low strength of local investors (either by way of overall population wealth or by way of extreme wealth concentration) that seem most at the mercy of foreign capital flows. Currency unions (e.g., the euro in Slovakia) and other arrangements that are not captured by the FDI variables somewhat mitigate the predictive score around local currency markets. Again, we are fully aware of the shortcomings of the crude methodology depicted here, and it is not our intention to “name and shame” certain economies; rather, we want to stimulate debate around preparedness for speculative capital flow episodes before they become a matter of urgency. Defensive measures and advanced asset markets
As a second step, we look at the relationship between economies’ defensive measure (the score just discussed) and their development of more advanced asset markets (in particular, equities). We compute an advanced markets score from the variables listed in the last category of Table 1, and the results are graphically depicted in Figure 5. At first glance, the graph shown in Figure 5 confirms the hypothesis that many emerging economies grow their advanced markets, such as stock exchanges, before fortifying the more fundamental asset classes of credit and foreign exchange. Again, to stimulate debate, we have highlighted those economies where there is a significantly higher score for advanced market mechanisms than for defensive market ones.9 It may be no surprise that a considerable number of those economies have in fact seen their equity markets appreciate significantly, and some observers believe that asset bubbles are
1.2: Financial Development, Capital Flows, and Capital Controls
Figure 4: Defensive strength vs size of economy
7 United Kingdom
Defensive strength score
6 United States
5 Japan Singapore
Switzerland Canada
Hong Kong SAR
4
France Australia Germany Jordan
3 Kuwait
Malaysia Ireland Italy
Bahrain
2
Turkey
Poland
Slovak Republic
1
China
Brazil Saudi Arabia
100
10
Russian Federation
Mexico
1,000
10,000
100,000
GDP (US$ billions, logarithmic scale)
Source: Financial Development Index 2010; authors' analysis.
37
Figure 5: Advanced markets vs defensive strength
Hong Kong SAR
7 Singapore
China
United States
Advanced markets score
6 Australia Switzerland
Brazil Korea
5
Canada
Israel Finland Sweden South Africa
4
Russian Fed.
Bahrain
Norway
Germany France
Saudi Arabia
3
Belgium Denmark
Colombia
2 Pakistan Panama Argentina
1 1
2
3
4
Defensive strength score
Source: Financial Development Index 2010; authors' analysis.
5
6
7
1.2: Financial Development, Capital Flows, and Capital Controls
38
Table 3: Details of the advanced markets indicator
2010 FDI data
Bahrain Jordan Panama Slovak Republic Morocco Vietnam Bangladesh Kazakhstan Kuwait Ukraine Peru Hungary Philippines Romania Chile Pakistan Nigeria Singapore Egypt Malaysia Israel Czech Republic Hong Kong SAR Ireland Colombia United Arab Emirates Finland Thailand South Africa Denmark Argentina Venezuela Saudi Arabia Austria Norway Sweden Poland Belgium Switzerland Indonesia Turkey Netherlands Korea, Rep. Mexico Australia Russian Federation India Canada Spain Brazil Italy United Kingdom France Germany China Japan United States
GDP (US$ billions)
20 23 25 88 91 92 95 109 111 116 127 129 161 162 162 167 173 177 188 191 195 195 211 228 229 230 238 264 287 309 310 337 370 382 383 405 430 470 495 539 615 795 833 875 997 1,229 1,236 1,336 1,464 1,574 2,118 2,184 2,676 3,353 4,909 5,068 14,256
Defensive strength score
Advanced markets score
2.10 3.19 2.83 1.30 2.03 1.99 1.60 1.83 2.32 1.51 1.28 1.43 1.64 1.00 1.80 2.03 1.13 4.31 2.43 2.78 1.95 1.59 4.27 2.63 1.17 3.09 2.18 2.28 1.95 3.32 1.08 1.35 1.78 2.51 2.42 2.45 1.33 3.23 4.21 1.47 1.75 3.76 2.32 1.24 3.78 1.70 2.60 3.93 3.26 2.06 2.60 7.00 3.77 3.61 2.20 4.52 5.36
3.50 4.11 1.49 1.57 3.03 2.82 2.03 2.68 3.76 1.93 1.73 1.61 2.27 2.25 2.22 2.48 2.07 6.85 2.37 4.94 4.98 2.43 7.00 2.85 1.95 4.61 4.80 2.15 4.04 2.70 1.00 1.03 3.21 2.71 4.01 4.42 2.45 2.94 5.54 2.78 2.74 5.34 4.89 1.47 5.88 3.42 4.71 5.13 6.14 5.42 3.51 5.63 3.62 3.57 6.66 3.90 6.49
Source: Financial Development Index 2010; authors' analysis. Note: Data in blue bold indicate advanced market scores that are 50 percent greater than defensive strength scores.
being inflated in some. To reiterate our previous point, this is not to say that a damaging capital flow episode will follow automatically—but it should increase vigilance in at least some of those economies. The transmission mechanism of speculative capital via credit, and often the local banking system as well, deserves special attention in this regard. In particular, smaller countries such as Colombia, Israel, or Pakistan with low local credit market scores and absolute size could be more easily overwhelmed than, say, Russia or China. Table 3 gives further numerical detail on the graphical scores for all the countries in the FDI. Those countries that have an advanced market score that is significantly (by more than 50 percent) higher than their defensive score are highlighted. The potential of trade areas and alliances
Without prejudicing the rich debate around how best to develop local financial markets—and fully acknowledging that this will not always be an easy endeavor—we offer some thoughts and analysis on what countries can do to strengthen their financial markets. Regional trade areas, if enacted credibly, can not only boost the local economy but also sensibly pool investor resources and to some extent credit markets. To illustrate this point, we have taken the original ASEAN 5 economies from the list and aggregated their scores in Table 4. It is noteworthy that, even excluding the outlier top score, pooling provides a significant uplift over the weakest scores on each dimension. Currency market scores are the exception, as might be expected in the presence of a trade union without a currency union (though the variables might understate the effect of swap lines agreed to under the Chiang Mai initiative). An excellent body of research in the field of capital flows and their beneficial as well as detrimental effects is available, and we point to the references for an overview. We have omitted many of the good arguments that are ongoing in the academic and public-sector debate, as we could not do them justice in the space afforded here. Of the many recent papers, we would like to highlight the work by the BIS (CGFS Paper No. 33) and the chapter on liquidity expansion of the recent International Monetary Fund (IMF) Global Financial Stability Report as highly complementary to our discussion here.
A code of conduct for capital controls There will never be an economic system without irrational episodes, and therefore all the rational defenses outlined in the previous section might still not prevent a capital flow episode that proves a threat to systemic stability of the local economy. Orthodox economic theory suggests this should never happen—but recently,
2010 FDI data
Total GDP defensive (US$ billion) strength score
Investor base
Local credit markets
Local currency markets
Advanced markets score
2.27
Philippines*
161
1.64
2.43
2.39
1.35
Singapore
177
4.31
5.69
3.76
3.72
6.85
Malaysia**
191
2.78
5.19
3.98
1.45
4.94
Thailand**
264
2.28
3.92
2.58
1.68
2.15
Indonesia*
539
1.47
2.47
2.09
1.17
2.78
ASEAN 5 ASEAN 5 excluding top score
1,333
2.22
3.57
2.72
1.67
3.45
793
2.04
3.50
2.70
1.41
3.04
Source: Financial Development Index 2010; authors' analysis. Notes: * = countries with a defensive strength score lower than 2.00; ** = countries with a defensive strength score between 2.00 and 3.00. Data in blue bold highlight scores lower than 2.00.
even the staunchest proponents of that theory have acknowledged that extraordinary measures of market intervention might become necessary.10 If it all goes wrong: Capital controls as a last resort
We agree that there can be circumstances where market intervention is required, and would rather have the benefits of global capital flows with the occasional episode of market intervention than a regime that consistently prohibited global flows. But we also would like to emphasize, as stated in the heading, that we do believe in such measures of capital control only as a last resort when all else fails.11 In general, it is our belief that persistent market interventions create inefficiencies that lead to a worse outcome further down the road. That said, too often capital controls are instigated as a knee-jerk reaction in a short time frame when capital flows become visible and policymakers feel they need to react quickly. There is consequent variation in the instruments being used, often incorrect expectations of what they can achieve, and subsequent changes that contribute to market confusion. We aim to reduce this variation by offering some principles and recommendations for the successful use of capital controls in the remainder of this chapter. The scope of this discussion covers capital controls designed to deal with hot money. It does not cover regulatory regimes that seek to restrict foreigners’ participation in local markets over the long term (as in countries such as India or China). These regimes are normally governed by national policy interests rather than the need to contain short-term destabilizing money flows, and are therefore not subject to the same pressures of quick decision making and potential panic
in local financial markets. Therefore we have excluded them from the scope of this discussion. Furthermore, the research does not look at instances where capital controls were applied toward flows caused by a political and banking crisis. There exists a comprehensive amount of literature on such episodes and we feel we would not be able to add further insight to these findings.12 To arrive at the conclusions presented in this chapter, we have created a database of experiences with capital controls. This database is comprised of nine episodes targeted at hot money in emerging economies from 1990 to 2008. In creating this database, we have used public source data listed in the reference section and also are grateful to IHS Global Insight for sharing some of their proprietary data. We have chosen this timeframe as we feel it holds most relevance for today’s financial and economic system—analysis of episodes from the Bretton Woods era would offer limited insights in our opinion. To arrive at our conclusions, we have analyzed nine episodes with a total of 156 individual observations (by which we mean the introduction, withdrawal, or significant change of a capital control measure). The analysis confirms that capital controls are not an easy response to economic imbalances. If administered wrongly, they suffer from a variety of problems— hence the distaste orthodox theory extends toward them. Some considerations are: • Capital controls by definition are distortive, and impede free markets. • Their long-term efficacy is by no means proven, and in fact is disputed by a number of reputable studies.13
1.2: Financial Development, Capital Flows, and Capital Controls
Table 4: Pooled indicators for the ASEAN 5 economies
39
1.2: Financial Development, Capital Flows, and Capital Controls
40
• If they are not implemented correctly, sophisticated players can circumvent capital controls easily, and the subsequent environment of frequent adjustments introduces uncertainty about an economy as a destination of funds. In the extreme, this can lead to long-lasting reputational damage and reduced foreign investment into an economy. These points are, rightly, affirmed in the IMF’s recent Global Financial Stability Report as well as its previous publications and stance. We also concur with the IMF that capital controls do not succeed in addressing an underlying economic issue (such as an unsustainable currency peg or a mismatch between monetary and fiscal policy). Depending on the cause of flows, there might be some adequate alternatives to capital controls. For example, it might be possible for regulators and the Financial Stability Board to work with major prime brokers (who provide credit to hedge funds) on temporary dynamic limits for credit extension into “crowded trades.” Such an effort, in the spirit of constructing a “circuit breaker,” while of course still interfering with markets, might be preferable to a full-blown capital control regime in terms of administrative effort and reputational issues. A suggested decision-making framework for capital controls
Potentially the most pertinent lesson to be learned from past episodes is that successful implementations of capital controls must be considered in the broader context. So, rather than trying to narrowly penalize a particularly egregious type of capital flow or investor, it is very important to start with the goals and available policies that the capital controls are trying to enhance. This allows communication of a positive strategy to the markets and prevents the perception of a retributive regime that, in the long run, might destabilize the economy more than short-term capital flows ever would have. When it comes to preventing instabilities, we are convinced that those controls that employ market forces constructively by channeling and signaling are ultimately more successful than those that purely try to inhibit markets. First, the financial firepower of markets (as outlined in the overview to this chapter) can easily overwhelm local economies. Second, sophisticated market participants can employ a variety of instruments to circumvent controls that make no economic sense to them—and will always do so given enough time.14 So, although capital controls can act as successful speed bumps in the short run, it is wise to think about giving positive incentives to encourage investors where their money is desired while making it more difficult for them to place money where it is not desired. The IMF acknowledges this position in its latest Global Financial
Stability Report by finding market-based controls to be more transparent and predictable than others, leading to more positive sentiment, even though the direct immediate efficiency of the controls might be no better or worse than that of administrative controls.15 Third, and in accordance with the IMF’s findings, administrative controls tend to carry a higher operational cost and execution risk. This is particularly true for those economies that are not heavily regulated in the first place and that therefore lack the right talent pools and administrative structures to enforce controls in the face of highly sophisticated speculators. While capital controls can prevent instability in the short term, the development of other aspects of local markets will be more effective in the long run. A good legal and regulatory framework, as well as adequate local capital markets—particularly bond markets to sterilize interventions16—can be an important part of an improvement plan. Timing an improvement plan’s announcement with the introduction of capital controls will signal the long-term intent and seriousness of the economy’s policymakers. Prudential regulation in particular has been seen as a useful tool in mitigating asset price inflation and promoting output stability17—this should be considered before, or in parallel with, reaching into the capital control toolbox. Because the effectiveness of capital controls will diminish over the long run, it is important to keep the exit strategy in mind from the beginning—and, where possible, to signal this strategy clearly to the markets. This approach ensures that the economy imposing the capital controls is seen as transparent and having a predictable long-term strategy, which greatly helps in attracting “good flows” in the future. Figure 6 summarizes our thinking in a graphical fashion. It should also be pointed out that the iteration process outlined above is not purely for academic or planning purposes. Once an economy has successfully introduced (and exited) capital controls, there remains a risk that the circumstances that led to their introduction will recur. Examples in our database are: • • • •
Brazil (1993–97, 2000, 2009) Colombia (1993–98, 2007) Malaysia (1994, 1997) Thailand (1995, 1997, 2006)
This recurrence might reflect an appetite by policymakers to revert back to what used to work well as much as an appetite by arbitrageurs to test the waters on an economy they have targeted before. Either way, it is useful for policymakers to consider that they are likely to re-introduce capital controls at some point in the future—and to avoid any rhetoric to the contrary that might undermine their credibility.
Goals
Activities
• Identify economic goals — E.g., quantified annual growth targets
Instability prevention
Policies
• Identify realistic policies to achieve goals given constraints of trilemma and pre-existing conditions — E.g., exchange rate stability and perfect capital mobility — Independent monetary policy and perfect capital mobility
• Prevent instability through a strong prudential framework — Sufficient body of laws — Appropriate regulatory bodies that support longterm financial sustainability through: —• Monitoring —• Disclosure —• Reporting — Promote a financial system where markets’ interest is in line with economic stability and growth
Tool selection
• Carefully select the right reactions and tools — Leverage database of capital controls to understand the best tools for a given set of conditions
Efficacy
• Ensure measures are effective — Draw on database of capital controls’ success measures and control detail to understand keys to effectiveness of a given set of controls
Exit strategy
• Develop a soft landing — Study exits from capital controls captured in the database to plan appropriately for a smooth exit
y Final ateg ly, mo ne str nitor effe cts and reiterate to fine-tu
Source: Authors’ analysis.
Capital controls can be an effective stop-gap to implement measures that allow for managing the economy toward a softer landing than would otherwise be possible in the presence of destabilizing volatility. However, behavioral finance implications should not be overlooked. If used over the longer term, capital controls not only have diminished effectiveness but also can undermine investor confidence and result in a higher cost of capital for the economy for years to come. Thus, as a general principle, the shorter a capital control regime is kept in place, the better. We also echo the IMF’s position that, when considering capital controls, policymakers should take into account not just their own economy but also the interplay with other linked (geographically or through trade) economies.18 What makes sense in isolation might have unintended consequences for related economies, which in turn can lead to undesirable outcomes for the initiating
economy. Particular attention should be paid to desirable flows such as FDI or those from trade patterns, and, where possible, controls should be chosen that minimize disruption in these areas under realistic scenarios. The importance of moral suasion and clear communication on any measure is paramount, and devising a communication strategy that sets out the above points clearly should be a key step when considering capital controls. The power of the right narrative ensures that those speculators who are targeted by the control understand the determination of the local economy, but also that providers of desirable inflows feel they are still welcome. There is no cost associated with getting this right; on the other hand, there is often considerable cost when enforcing new legislation related to capital controls. Of course, the right choice of capital controls is also very important. The next section will discuss findings on both tool selection and related efficacy in greater detail.
1.2: Financial Development, Capital Flows, and Capital Controls
Process
Figure 6: Best practice process and a checklist for introducing capital controls
41
1.2: Financial Development, Capital Flows, and Capital Controls
42
Which capital controls for which situation
Analysis of the historical episodes showed that five types of capital controls were employed most frequently. None of them was a panacea, and Table 5 lists their major observed strengths and weaknesses. The efficacy of a capital control will crucially depend on the motivation of the speculators it is supposed to deter. Particularly important is an insight into what drives the observed capital flows. In our database, we found two fundamentally different root causes for systemically dangerous amounts of hot money (Table 6). Other root causes, such as appreciation of a specific asset class (e.g., city real estate) are rarely of a magnitude that threatens the whole economy and can be dealt with within classic regulatory tools such as lending standards. It should be clear that certain tools lend themselves more easily to countenance arbitrageurs drawn by a specific root cause. For example, an unremunerated reserve requirement (URR) has proven effective when deployed in an interest rate differential situation, whereas quantitative limits are more appropriate against currency depreciation expectations. The episodes show that it pays not to attempt highly detailed and targeted capital controls—a broad measure such as a URR is often more successful than highly targeted measures that investors find easy to circumvent. Features that make the URR successful in an interest rate differential situation include: • the adjustability of the measure (“analogue” measures generally also allow for easier exit than “digital” ones); • the direct reduction of arbitrage payoff to sources of hot money, implying a degree of rationality that reduces uncertainty to providers of desired capital flows; and • the difficulty in circumventing, assuming there are no exemptions for certain entities (which arbitrageurs usually exploit very quickly). As a counterexample to this, outright prohibitions often result in an escalating reactive arms race of new legislation that further exacerbates the situation and increases uncertainty about policymakers’ ability to stay in charge. Looking at the Argentinean 2001/2 episode, some 50 new laws were implemented in a short period. Despite (or possibly because of) this, the EMBI spread of Argentina’s sovereign bonds rose in excess of 5,000 basis points over US Treasuries.19 Experience from the database suggests that while hot money is temporary by its very definition, it will continue to target the economy until the underlying incentive to speculate is removed. Specifically, exchange rate sterilization without addressing the core imbalance should be cautioned against. Such sterilization is likely
to exacerbate flows and either drain foreign reserves (in the case of depreciation pressures) or force the central bank to issue debt at higher rates than the foreign bonds it purchases (in the case of appreciation pressures). Cautionary examples of such episodes include: • the fall of Mexican foreign reserves by 77 percent (a loss of US$20 billion) in the 12 months leading to the 1994 peso devaluation, and • the fall of Malaysian foreign reserves by 37 percent (a loss of US$ 10 billion) in the 8 months of the 1997 crisis. This observation is backed by academic research, which concludes that sterilized intervention increases the volume of capital flows and tilts the balance toward short-term instruments (FDI and long-term portfolio flows are usually not strongly affected by sterilization efforts).20 Academic studies have found that fiscal discipline and steady public expenditure during episodes of large capital inflows can help limit real currency appreciation and foster better growth outcomes in the aftermath. Sterilized intervention has been observed to be less effective, and tightening capital controls does not significantly improve the outcome either.21 In a similar vein, measures to limit specific investment strategies for foreigners are usually quickly circumvented and not very effective, particularly when the economic upside (e.g., a combination of a tightly managed exchange rate and high interest rates) persists. Removing the incentive for speculation needs to be a priority, as capital controls alone will not do this. Proving the point, a study of controls on international transactions in the domestic currency and stock market operations found no statistically significant impact on the interest rate differential.22 Capital controls that impose additional costs on international asset transactions have been shown to reduce volatility of exchange rates in the long run, but increased volatility should be expected in the short run.23 There are also effects on the real economy in the form of lower equilibrium output levels, and exports into developing and transition economies have been found to be reduced by capital controls.24 Firms with only domestic currency revenues might also find access to foreign currency debt more difficult under a capital controls regime, even where such access is not explicitly in scope of the controls.25 An assessment of the benefits from capital controls versus the potential longer-term consequences is therefore important, particularly if the economy relies on a certain growth trajectory. On a final note, depending on the state of the economy, certain capital controls might not work as effectively as others. For example, debt and equity controls to reduce outflows (while not affecting inflows)
Tool Unremunerated reserve requirements (URR)
Time requirement
Quantitative limit
Direct tax on financial transactions
Regulation of trade between residents and non-residents
Typical manifestation
Historic usage
Key strength
Main weaknesses
<50% URR on new foreign borrowing
Columbia 2007 Thailand 2006 Argentina 2001 Malaysia 1994 Brazil 1994 Chile 1991
Direct reduction of arbitrage payoff and puts investor assets at risk
Requires unilateral and tightly enforced application to be effective
Minimum stay requirements on investments or extending maturity of debt
Columbia 2007 Thailand 2006 Argentina 2001 Malaysia 1994 Brazil 1994 Chile 1991
Buys time for policymakers to close arbitrage opportunity
Only delays capital flow and does not eliminate it
Limits on pension fund investment allocations or limit on non–traderelated foreign exchange holdings
Columbia 2007 Thailand 2006 Argentina 2001 Malaysia 1994 Chile 1991
Targets immense size of speculative transactions that exacerbate destabilization
Encourages maximization of allowance
Investment tax on shortterm debt for foreign investors
Brazil 1994 Chile 1991 Argentina 2001
Directly and narrowly targets speculative transactions
Significantly reduces investor confidence
Limit sale of domestic currency by domestic investors to overseas investors
Thailand 1997 Malaysia 1997
Causes minimal distortion in domestic markets
Encourages circumvention by diverting capital flow into non-prohibited investment vehicle
Source: Authors’ analysis.
Table 6: Root causes of systemically dangerous amounts of hot money Root cause
Country
Timeframe
INTEREST RATE DIFFERENTIAL Chile
June 1991 – Sep 1998
Combination of tightly managed (pegged) exchange rates and high interest
Brazil
June 1993 – Jan 1995
rates targeting inflation creates an opportunity for arbitrage. Typically large
Malaysia
Jan 1994 – Aug 1994
volumes of foreign investment into short-term debt instruments.
Mexico
Dec 1994 – Apr 1995
Argentina
Mar 2001 – Dec 2002
Thailand
Dec 2006 – Mar 2007
Colombia
Jan 2007 – July 2008
Thailand
Mar 1997 – Jan 1998
Malaysia
Aug 1997 – Feb 1999
CURRENCY DEPRECIATION EXPECTATION
Perception of deteriorating economic fundamentals stirs devaluation expectations that create a self-reinforcing loop
Source: Authors’ analysis.
1.2: Financial Development, Capital Flows, and Capital Controls
Table 5: Overview of the most frequently employed capital
43
1.2: Financial Development, Capital Flows, and Capital Controls
Figure 7: Best practice process and a checklist for introducing capital controls
Knowledge
Dialogue
Database
• List of key contacts to aid countries considering capital controls
• Code of practice, recommendations for appropriate and effective use of capital controls • Advice informed and supported by the database, a catalog of capital controls and their historical uses
44
Policymakers
Metrics
• Dialogue with nations experiencing hot money flows
• Clients are typically policymakers in emerging market economies
• Discussion informed by metrics (e.g., Financial Development Index)
• Hot/foreign money is creating instability in domestic economy
• Advice provided by key contacts and informed by code of practice and database
• Use of capital controls is under consideration
Source: Authors’ analysis.
have been shown to work effectively only in highincome countries.26
Concluding remarks We see this work as the starting point of the creation of a knowledge base that is both factual/generic and in a form that will enable experts to provide tailored advice to policymakers. Such a knowledge base should be administered and maintained by an appropriate international and impartial institution—we would suggest the IMF for this purpose, and are particularly encouraged by its recently revised stance toward capital controls, which makes such a function more tenable. The Financial Stability Board, with its responsibility for monitoring financial system vulnerability, would be likely to find the output useful. Figure 7 depicts our conception of such a model. We would also advocate establishing a regular dialogue based on metrics that might signal vulnerability to suddenly rising capital flows. This could take the form of “what if ” scenario planning and would ensure that policymakers can impose capital controls in a measured and prepared fashion when the need arises. The metrics outlined earlier in this chapter might provide a good starting point.
Further work to be done would include boosting the database of episodes with both more historical (reaching back to the 1970s) and more recent (e.g., Brazil 2009) experiences. It could also prove useful to look at countries with long-standing capital controls (e.g., India, China) and examine the dynamic changes they have made over time to their regimes. Resourced appropriately, this need not be an overly onerous undertaking; it could even be undertaken by a modestly budgeted research team and should refine and sharpen some of our conclusions significantly. We hope that this chapter will be helpful for policymakers in emerging economies who feel in danger of being overwhelmed by large capital flows. It is intended to be only the beginning of a larger effort to provide a solid framework for a policy mechanism that will stay pertinent as globalization continues and the global economic and financial system grows ever more connected. We would rather have the option of imposing occasional capital controls in certain circumstances than have to reverse out of global markets with their numerous benefits, particularly for emerging economies.
1 See http://www.economist.com/research/Economics/ alphabetic.cfm?letter=A#animalspirits for a definition of animal spirits. 2 See Bernanke 2010. 3 See, e.g., Eichengreen 2001 and BIS 2009, among many. 4 See Appendix A for a list of Council members. 5 By hot money we mean speculative short-term capital flows that seek high risk-adjusted returns. They are characterized by multiple short-term investments in large quantities and can be very volatile. 6 Bekaert et al. 2005. 7 De la Torre and Schmukler 2007. 8 This is done by simply averaging the scores across the variables mentioned in Figure 4; more sophisticated approaches can of course be envisaged. As in the overall FDI methodology, a score of 1 is the lowest, a score of 7 the highest. 9 For our purposes here, significantly higher is higher by 50 percent, a somewhat arbitrarily chosen figure. 10 See Ostry et al. 2010. 11 By capital controls we mean restrictions placed on investors’ freedom to move capital across borders. These controls are implemented by local authorities to benefit the domestic economy by reducing destabilizing pressures caused by (perceived) speculative investors. 12 See, for example, Reinhart and Rogoff 2009. 13 See, for example, Berg 2009; Clements and Kamil 2009; and Edwards 1999. 14 For example, see Cardoso and Goldfajn 1997; IMF 2010a. 15 IMF 2010a. 16 See, for example, Balino et al. 1991 and Annex IV to the IMF’s 1998 International Capital Markets report. 17 N’Diaye 2009. 18 IMF 2010a. 19 JP Morgan Chase, Emerging Bond Index Plus. 20 Montiel and Reinhart 1999. 21 Cardarelli et al. 2009. 22 Tamirisa 2004. 23 Frenkel et al. 2001. 24 Tamirisa 1998. 25 Prati et al 2009.
———. 2007b. Bank of Thailand News 13 (2007): March 1. Bangkok: Bank of Thailand. ———. 2007c. Bank of Thailand News 33 (2007): July 24. Bangkok: Bank of Thailand. ———. 2007d. Bank of Thailand News 62 (2007): December 17. Bangkok: Bank of Thailand. Batini, N. and E. Nelson. 2000. “When the Bubble Bursts: Monetary Policy Rules and Foreign Exchange Market Behaviour.” Mimeo. October 2000, Bank of England. Bekaert, G., C. R. Harvey, and C. Lundblad. 2005. “Does Financial Liberalization Spur Growth?” Journal of Financial Economics 77 (2005): 3–55. Berg, A. 2009. “Fiscal Policy in Sub-Saharan Africa in Response to the Impact of the Global Crisis.” IMF Staff Position Note SPN/09/10. Washington, DC: IMF. Bernanke, B. S. 2010. “Causes of the Recent Financial and Economic Crisis.” Testimony before the Financial Crisis Inquiry Commission, September 2. Washington, DC: Board of Governors of the Federal Reserve System. Available at http://www.federalreserve.gov/ newsevents/testimony/bernanke20100902a.htm. Bernanke, B. S. and M. Gertler. 1999. “Monetary Policy and Asset Volatility.” Federal Reserve Bank of Kansas City Economic Review 84 (4): 17–52. Bincini, M., M. Hutchison, and M. Schindler. 2009. “Controlling Capital? Legal Restrictions and the Asset Composition of International Financial Flows,” IMF Working Paper No. 09/208. Washington, DC: IMF. BIS (Bank for International Settlements), Committee on the Global Financial System. 2009. “Capital Flows and Emerging Market Economies.” CGFS Publications No. 33, January. Basel: Bank for International Settlements. Calvo, G. A. and E. G. Mendoza. 1996. “Mexico’s Balance of Payments Crisis: A Chronicle of a Death Foretold.” Journal of International Economics 41 (3): 235–64. Cardarelli, R., S. Elekdag, and M. Ayhan Kose. 2009. “Capital Inflows: Macroeconomic Implications and Policy Responses.” IMF Working Paper No. 09/40. Washington, DC: IMF. Cardoso, E. and I. Goldfajn. 1997. “Capital Flows to Brazil: The Endogeneity of Capital Controls.” IMF Working Paper No. 97/115. Washington, DC: IMF. Cecchetti, S. G., H. Genberg, J. Lipsky, and S. Wadhwani. 2000. “Asset Prices and Central Bank Policy.” Geneva Reports on the World Economy 2. Geneva: International Centre for Monetary and Banking Studies and Centre for Economic Policy Research. Cecchetti, S. G., H. Genberg, and S. Wadhwani. 2002. “Asset Prices in a Flexible Inflation Targeting Framework.” In Asset Price Bubbles: The Implications for Monetary, Regulatory and International policies, ed. by W. C. Hunter, G. G. Kaufman, and M. Pomerleano. Boston: MIT Press. 427–44.
26 Bincini et al 2009. Clements, B. and H. Kamil. 2009. “Are Capital Controls Effective in the 21st Century? The Recent Experience of Colombia.” IMF Working Paper No. 09/30. Washington, DC: IMF.
References Ariyoshi, A., K. Habermeier, B. Laurens, I. Otker-Robe, J. I. Canales-Kriljenko, and A. Kirilenk. 2000. “Capital Controls: Country Experience with Their Use and Liberalisation.” IMF Occasional Paper No. 190. Washington, DC: IMF. Balino, T. J. T., A. Bennett, and E. Borensztein. 1991, “Monetary Policy in Dollarized Economies.” IMF Occasional Paper No. 171. Washington, DC: IMF. Bank of Thailand. 2006a. Bank of Thailand News 48 (2006): December 4. Bangkok: Bank of Thailand. ———. 2006b. Bank of Thailand News 51 (2006): December 18 Bangkok: Bank of Thailand. ———. 2006c. Bank of Thailand News 52 (2006): December 22. Bangkok: Bank of Thailand. ———. 2007a. Bank of Thailand News 01 (2007): January 15. Bangkok: Bank of Thailand.
1.2: Financial Development, Capital Flows, and Capital Controls
Notes
De la Torre, A. and S. L. Schmukler. 2007. Emerging Capital Markets and Globalization: The Latin American Experience. Washington, DC and Palo Alto, CA: The World Bank and Stanford University Press. Dominguez, K. M. E. and L. L. Tesar. 2004. “International Borrowing and Macroeconomic Performance in Argentina.” RSIE Discussion Paper No. 532 Michigan: University of Michigan. Edison, H. J. and C. M. Reinhart. 2000. “Capital Controls During Financial Crises: The Case of Malaysia and Thailand.” Finance Discussion Papers No. 662. Washington, DC: Board of Governors of the Federal Reserve System International. Edwards, S. 1999. “How Effective Are Capital Controls?” NBER Working Paper 7413. Cambridge, MA: National Bureau of Economic Research. Eichengreen, B. 2001. “Capital Account Liberalization: What Do Cross-Country Studies Tell Us?” The World Bank Economic Review 15 (3): 341–65.
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1.2: Financial Development, Capital Flows, and Capital Controls
Eichengreen, B. and D. Leblang. 2003, “Capital Account Liberalization and Growth: Was Mr Mahatir Right?” International Journal of Finance & Economics, Special Issue: Symposium on Capital Controls 3: 205–24. Frenkel, M., C. Nickel, G. Schmidt, and G. Stadtmann. 2001. “The Effects of Capital Controls on Exchange Rate Volatility and Output.” IMF Working Paper No. 01/187. Washington, DC: IMF. Gil-Diaz, F. 1998. “The Origin of Mexico’s 1994 Financial Crisis.” The Cato Journal 17 (3). IIF (International Institute of Finance). 2010. “Capital Flows to Emerging Market Economies. IIF Research Note, April 15. Washington, DC: International Institute of Finance. IMF (International Monetary Fund). 1998. “Annex IV: Chile’s Experience with Capital Controls.” International Capital Markets, September. Washington, DC: IMF. ———. 2010a. Global Financial Stability Report: Meeting New Challenges to Stability and Building a Safer System. Washington, DC: IMF. ———. 2010b. World Economic Outlook Database. August. Washington, DC: IMF. Johnston, R. B., S. M. Darbar, and C. Echeverria. 1997. “Sequencing Capital Account Liberalization: Lessons from the Experiences in Chile, Indonesia, Korea and Thailand.” IMF Working Paper No. 97/157. Washington, DC: IMF. Johnston, R. B. and N. T. Tamirisa. 1998. “Why Do Countries Use Capital Controls?” IMF Working Paper No. 98/181. Washington, DC: IMF. Krugman, P. R. and M. Obstfeld. 2009. International Economics: Theory and Policy, 8th edition. Boston: Pearson. Laurens, B. and J. Cardoso. 1998. “Managing Capital Flows: Lessons from the Experience of Chile.” IMF Working Paper No. 98/168. Washington, DC: IMF.
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Montiel, P. and C. M. Reinhart. 1999. “Do Capital Controls and Macroeconomic Policies Influence the Volume and Composition of Capital Flows? Evidence from the 1990s.” Journal of International Money and Finance 18 (1999): 619–35. N’Diaye, P. 2009. “Countercyclical Macro Prudential Policies in a Supporting Role to Monetary Policy.” IMF Working Paper No. 09/257. Washington, DC: IMF. Ostry, J. D., A. R. Ghosh, K. Habermeier, M. Chamon, M. S. Qureshi, and D. B. S. Reinhardt. 2010. “Capital Inflows: The Role of Controls.” IMF Staff Position Note SPN/10/40. Washington, DC: IMF. Prati, A., M. Schindler, and P. Valenzuela. 2009. “Who Benefits from Capital Account Liberalization? Evidence from Firm-Level Credit Ratings Data.” IMF Working Paper No. 09/210. Washington, DC: IMF. Reinhart, C. M. and V. R. Reinhart. 1998. “Some Lessons for Policy Makers Who Deal With the Mixed Blessing of Capital Inflows.” MPRA Paper No. 7123. College Park: University of Maryland. Reinhart, C. M. and K. S. Rogoff. 2009. This Time Is Different: Eight Centuries of Financial Folly. Princeton: Princeton University Press. Reinhart, C. M. and T. S. Smith. 1998. “Too Much of a Good Thing: The Macroeconomic Effects of Taxing Capital Inflows.” MPRA Paper No. 13234. College Park: University of Maryland. Tamirisa, N. T. 1998. “Exchange and Capital Controls as Barriers to Trade.” IMF Working Paper No. 98/81. Washington, DC: IMF. ———. 2004. “Do Macroeconomic Effects of Capital Controls Vary by Their Type? Evidence from Malaysia.” IMF Working Paper No. 04/3. Washington, DC: IMF. Taylor, J. B. 2001. “The Role of the Exchange Rate in Monetary-Policy Rules.” American Economic Review 91 (2): 263–7. World Economic Forum. 2009. The Financial Development Report 2009. New York: World Economic Forum USA Inc.
Howard Davies Director, London School of Economics and Political Science, United Kingdom (Council Chair) Laura M. Cha Deputy Chairman, HSBC, Hong Kong SAR (Council Vice-Chair) Manvinder S. Banga President, Foods, Home and Personal Care, Unilever, United Kingdom Andreas Beroutsos Partner, Eton Park Capital Management, United States Ibrahim S. Dabdoub Group Chief Executive Officer, National Bank of Kuwait, Kuwait; Chair, Arab Business Council, World Economic Forum
World Economic Forum Contributors
Council Manager: Isabella Reuttner Research Analyst: Kieran Gopaul Forum Lead: Kevin Steinberg External Research Assistant
Eva Gustavsson, Barclays Capital
1.2: Financial Development, Capital Flows, and Capital Controls
Appendix A: Global Agenda Council on Global Investment Flows: List of Members
Michael Drexler Managing Director, Global Head of Strategy Corporate/Investment Banking and Wealth Management, Barclays plc, United Kingdom Barry Eichengreen Professor of Economics and Political Science, University of California (Berkeley), United States Asaf Farashuddin Vice-President, Strategy and Initiatives, IHS, United States Diana Farrell Deputy Director, National Economic Council (NEC), United States Per-Kristian Foss Member of Parliament, Norway Steven J. Gilbert Chairman, Gilbert Global Equity Partners, United States Takatoshi Ito Professor, Graduate School of Economics and Public Policy, University of Tokyo, Japan Gerard Lyons Chief Economist and Group Head, Global Research, Standard Chartered, United Kingdom Robert Pozen Chairman, MFS Investment Management, United States Angela Redish Professor, Department of Economics, University of British Columbia, Canada John J. Studzinski Senior Managing Director and Global Head, Corporate Advisory Services, Blackstone Group, United Kingdom Levent Veziroglu Executive Vice-President, Dogus Holding, Turkey Jacob Wallenberg Chairman, Investor AB, Sweden Bernard Yin Yeung, Dean and Stephan Riady Distinguished Professor, National University of Singapore, Singapore
47
SME Finance: What Have We Learned and What Do We Need to Learn? THORSTEN BECK, CentER and EBC, Tilburg University, and CEPR.
Small- and medium-sized enterprises (SMEs) account for a large share of enterprises as well as a large share of overall employment in the private sector of most economies, a situation that justifies the statement that “SMEs are the emerging private sector in poor countries and thus form the base for private sector–led growth.”1 Cross-country evidence, however, also shows that SMEs are more constrained in their operation and growth than large enterprises and access to financial services features importantly among the constraints.2 Recently, and partly because of the global economic crisis, SME finance has gained prominence in policymakers’ discussions. The G-20 has established a committee on SME finance, co-chaired by Germany and South Africa, and has supported the G20 SME Finance Challenge, a competition for innovative solutions to overcome SMEs’ financing constraints.3 Many suggestions for financial sector reforms—including regulatory reform discussions, often referred to as Basel 3—are tested for their impact on SMEs. What have we learned from empirical research over the past 10 years? What are the policy implications from this research? And where do researchers still need to provide answers? What data requirements must be addressed to answer these questions? This paper summarizes research on SME finance over the past 10 years and the policy recommendations arising from it, as well as points to open questions and the data that we need to answer these questions.
SMEs’ role in the economy Policy efforts targeted at SMEs have often been justified with arguments that (1) SMEs are an engine of innovation and growth and (2) they help reduce poverty because they are labor-intensive and thus stimulate job growth, but (3) they are constrained by institutional and market failures.4 Cross-country, country-level, and microeconomic studies, however, do not support these claims. One study shows that, although faster-growing economies have a higher share of SME employment in their manufacturing sectors, it is not the size of this segment that drives growth.5 On the other hand, cross-country research has pointed to the institutional and business environments— including well-defined property rights, both between private parties and protection against government expropriation; effective contract enforcement; competitive product, labor, and capital markets; and a legal framework that allows for relatively easy entry and exit of enterprises—as important factors for economic development. Another study shows that high firm registration costs hamper new firm creation and growth, while property right protection and regulations fostering access to finance are conducive to firm creation and growth.6 The effect of such policies might also explain the absence of a robust relationship between the size of
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
CHAPTER 1.3
49
60
n Small n Medium n Large
50
Percentage of firms
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
Figure 1: Comparison of financing of small, medium, and large enterprises
40
30
20
10
0 Finance working capital
Use fixed asset finance
Use loans
Cite finance as severe obstacle
Source: The World Bank’s Enterprise Surveys and author’s calculations. Averages across firms and countries are from Enterprise Surveys undertaken between 2005 and 2009.
50 the SME sector and economic growth, as a comparison between Italy and the United Kingdom illustrates. On the one hand, Italy has high registration costs and many old, inefficient, and slow-growing SMEs; the United Kingdom, on the other hand, with low entry barriers, has firms that enter at a lower scale than they do in Italy but grow more rapidly.7 The empirical evidence thus points to the entry of new firms—which are mostly small at entry—and the possibilities for successful SMEs to grow as decisive. It is not the size of the SME segment but their dynamism that helps economic development. Recognizing dynamism rather than size of the SME sector as the source of economic development identifies another important distinction that analysts should make among the firm population: informal microenterprises, the establishment of which is often the result of a lack of alternative economic opportunities, and small formal enterprises, some of which might have high growth potential.
Corporate finance: The size gap Small firms consistently report higher financing obstacles than medium and large enterprises, as do younger firms.8 The higher financing obstacles reported by small as compared with large firms are also reflected in financing patterns (Figure 1). SMEs use significantly less external funding for both working capital and fixed asset investment.
Small firms do not only report higher financing obstacles, they are also more adversely affected by these obstacles. Using firm-level data across 56 countries, researchers find that small firms’ financing obstacles have almost twice the effect on their growth that large firms’ financing obstacles do.9 Quasi-natural experimental evidence confirms the importance of credit constraints for firm growth. Analyzing detailed loan information on 253 Indian SMEs before and after they became eligible for a directed subsidized lending program, a recent study finds that the additional credit resulted in a proportional increase in sales rather than a substitution for other non-subsidized credit, indicating that these firms were credit constrained before receiving subsidized credit.10 Similarly, another study finds that small non-listed and non-group firms in Pakistan reduce their sales after they become ineligible for subsidized export credit, indicating the existence of credit constraints; in contrast, large, listed, and group firms do not reduce their sales after losing access to subsidized credit.11 Going even further down the size scale, yet another study uses a randomized experiment in Sri Lanka to test the productivity of capital by providing small grants to a group of micro-entrepreneurs and comparing their returns to a control group. These researchers find annualized returns of 55 to 63 percent.12 Recent research also shows the importance of the business environment for firms’ financing constraints and patterns. One paper demonstrates that institutional development, measured very broadly, is the most robust
Interest rate
Constrained access
Optimum access
Excess access
iiii (fully inclusive)
II
i* (equilibrium)
S’
I
III
S*
imc (risk free)
B
A
C
100%
Share of borrowers served
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
Figure 2: Access possibilities frontier for credit services
Source: Beck and de la Torre, 2007. Notes: The access possibilities frontier (APF) is the maximum share of SMEs that can be served in a commercially viable way. i = interest rate; i * =equilibrium interest rate; imc = risk-free interest rate; see text for descriptions of points I (A), II (B), and III (C); S* = fully efficient APF with maximum profitable outreach; S’ = inefficient APF caused by regulatory distortions or lack of contestability.
51 country characteristic predicting cross-country variation in firms’ financing obstacles, even after controlling for cross-country differences in GDP per capita.13 The positive effect of financial and institutional development can also be observed in the use of external finance. Better protection of property rights increases external financing of small firms significantly more than it does for large firms, particularly because of the differential impact it has on bank and supplier finance.14 Another study shows that the effect of obstacles on firm growth is smaller in countries with better-developed financial and legal systems,15 while yet another shows that financial development exerts a disproportionately large positive effect on the growth of industries that are naturally composed of more small firms.16 Financial and institutional development helps create a level playing field between small and large firms, while the lack of an effective financial system explains the phenomenon of “the missing middle” observed in many developing countries. The constraining effect of financial and institutional underdevelopment also shows up in a distorted size distribution. Research indicates that, in a crosscountry sample, large firms—that is, firms that are most likely to be able to choose the boundaries of the firm— are larger in countries with better-developed financial and legal systems;17 another study finds that, for a sample of European countries, financial development enhances new firm entry in sectors that depend more heavily on external finance and that the smallest size firms benefit the most in terms of higher entry from higher financial
development.18 On the other hand, access to financial services can help new entrepreneurs survive beyond the first year, as evidence from Bosnia shows,19 and can help enterprises innovate at a faster rate.20 The access possibilities frontier is introduced here as an approach to understanding the size gap in corporate finance as well as a platform on which to discuss both bank-level and government-level responses that attempt to close this gap.21 Transaction costs and information asymmetries drive the variation in access to finance across firms of different sizes. Fixed transaction costs in credit assessment, processing, and monitoring result in a decrease of unit costs as the size of the loan increases, which makes lending to SMEs more costly. In addition to transaction costs, SME lending, more than other lending product, is affected by the inability to manage risks. Compared with large firms, SMEs are commonly more opaque, less likely to be able to post collateral, and often do not have audited financial statements that allow a better picture of the enterprise and its projected profits. Both lending techniques and government policies affect the extent to which transactions costs and risk reduce SMEs’ access to external funding. We define as the access possibilities frontier the maximum share of SMEs that can be served by financial institutions in a commercially viable way (see Figure 2, Point I). This concept implies that, in many economies, a large share of microenterprises and even small formal firms might not be bankable from a commercial viewpoint. This
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
Figure 3: Identifying credit constraints
Do you have a loan? Yes 41.3%
No 58.7%
Have you applied for a loan? Yes 12.8%
No 87.2%
Why have you not applied for a loan? No need for a loan—establishment has sufficient capital
55.70%
Interest rates are not favorable
14.70%
Application procedures for loans or lines of credit are complex
11.20%
Collateral requirements are too high
07.20%
Did not think it would be approved
05.40%
Other reason
05.90%
Source: The World Bank’s Enterprise Surveys and author’s calculations. Numbers reflect averages across all Enterprise Surveys between 2005 and 2009.
52 frontier—and thus the share of bankable SMEs (Point I, A) —is determined by technology as well as the institutional framework within which financial institutions operate. However, a financial system can very well operate either below or above this frontier, as we will discuss. We can use the access possibilities frontier to identify several types of access to credit problems. A first type of access problem is demand-originated. This problem may be evident in too low a number of loan applicants simply because of self-exclusion resulting from cultural barriers or financial illiteracy. Alternatively, there may be a lack of profitable investment projects in the economy that deserve financing based on their expected return. A second type of access problem can arise from regulatory distortions or insufficient contestability that cause lenders not to fully exploit all the outreach opportunities and thus settle at a point below the access possibilities frontier (Figure 2, Point II, B). A third and very different access problem is associated with “excess access,” that is, an equilibrium above the access possibilities frontier with loans being granted to a larger share of loan applicants than is prudently warranted, given the lending interest rate and the institutional framework (Figure 2, Point III, C). A final access problem consists of too low a prudent access possibilities frontier, caused by deficiencies in an economy’s institutional framework compared with that of countries with similar levels of economic development. Each of these types of access problems calls for different policies. The first—demand-originated
problems—calls for demand-side measures that educate and encourage the healthy use of financial products by SMEs. The problem of a lack of profitable investment projects, on the other hand, has to be addressed through non–financial sector policies and is primarily not a problem of access to finance. The second problem calls for interventions and policies that encourage financial institutions to maximize outreach to SMEs within the existing contractual and macroeconomic environment. Conversely, restraining measures may be called for when loans are being provided to numbers of applicants beyond which can be considered prudent. The final type of problem, too low a prudent access frontier, requires a set of policies that provide for general reforms of the business environment and institutional framework that are not specific to the SME lending market. However, as we will discuss in the next section, the business model and lending techniques available to financial institutions also have a critical impact on the frontier. A mix of macro-level indicators of the business environment and Enterprise Survey data can give us an indication of the possibilities frontier (bankable SME population), actual banked SME population, and the reasons for the gap.22 Figure 3 summarizes Enterprise Survey data and shows that a large share of enterprises without access to credit have not applied for credit, and that they have a wide variation of reasons for not doing so—ranging from lack of demand to cumbersome application procedures and lack of assets that can serve as collateral. We note, however, that high interest rates
Business models The traditional view of SME finance focuses on relationship lending.24 Longstanding relationships between a financial institution, or even a specific loan officer, and the borrower allow problems of information asymmetry and thus risk to be overcome. Relationshipbased lending, however, might be more costly, moving the equilibrium away from the possibilities frontier discussed earlier. Recently the more nuanced view has been put forward that large and foreign banks, relative to other institutions, can have a comparative advantage at financing SMEs through arms-length lending technologies, such as asset-based lending, factoring, leasing, fixed-asset lending, credit scoring, and centralized organizational structures.25 The debate on relationship- vs. transaction-based lending techniques also has implications for which institutions can cater cost-effectively to SMEs. Relationship lending might be better done by small, community-based financial institutions, while transactionbased lending is more cost-effectively done by large financial institutions that can exploit the necessary economies of scale that investment in technology implies. In many developing countries, this debate has an additional dimension, because smaller banks are often owned by domestic shareholders, while large financial institutions are often foreign-owned. Using data for 91 banks across 45 countries, researchers find that foreign banks are more likely than domestic banks to use transaction-based lending techniques and more centralized business models.26 However, they also show that foreign banks do not tend to lend less to SMEs than other banks. It thus seems that both relationship- and transaction-based lending techniques are appropriate for SME lending, and that both domestic and foreign-owned banks can cater to SMEs.27 There are also specific transaction-based lending techniques that seem especially conducive for expanding SMEs’ access to external finance. Leasing is an attractive financing tool for SMEs—from the perspective of both demand and supply—because it is based on the cash flow of the financed asset, such as machinery or vehicle, rather than the reputation or the asset base of the enterprise. It also often includes tax advantages, and it allows for easier recovery if the correct legal framework is in place. Factoring, the discounting of accounts receivables, is attractive for small suppliers of large
credit-worthy buyers because it does not rely on information about the borrower, but rather on the obligor.28 Both leasing and factoring rely on a legal framework to govern the transactions but rely to a lesser extent on the contractual framework of a country. Thus these techniques can help push a financial system toward the frontier of SME lending, even if this frontier is low. Equity finance has not been stressed sufficiently as a source of financing for SMEs. This form of finance can be a beneficial source of funding in the early stages of an SME, when debt finance is not an option or the enterprise has reached its leverage limit. Although some developed and emerging markets have established secondtier SME stock exchanges, most developing countries lack the necessary scale, demand, and infrastructure to do so. Venture capitalists, including angel financiers, and private equity funds can be helpful in this context.
Policies The access possibilities frontier derived earlier allows us to discuss different policies to alleviate SMEs’ financing constraints and define government’s role. Specifically, we will distinguish among market-developing policies that will help push out the frontier, market-enabling policies that push incumbent and new financial institutions toward the existing frontier, and market-harnessing policies that prevent the financial system from moving beyond the frontier toward a point of financial fragility. Market developing policies aim at pushing out the frontier and include reforms in the contractual and informational frameworks and macroeconomic performance. While these reforms are not specific to the SME lending market, they will help level the playing field between small and large enterprises. Among the reform priorities in this category, credit bureau and legal system reforms feature prominently. The appropriate policies in this case would span a wide range: from titling land property to upgrading laws that affect collateral repossession or execution of guarantees; from modernizing corporate reorganization and bankruptcy proceedings to improving the functioning of the judiciary; and from raising accounting and disclosure standards to establishing the appropriate legal framework and right incentives for the development of credit registries, be they private or public. A growing literature has shown the importance of credit registries for small firms’ access to external finance.29 Institutional reforms (even credit registries) can take a long time to materialize. To the extent that a financial system is operating below the possibilities frontier, there is room for market-enabling policies that may foster the broadening of access even in the absence of perceptible changes in the institutional framework. Where the lack of profitable, credit-deserving investment projects is the main problem, non–financial sector policies are called for. Where the main reason for being
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
are also an important reason, which could either point to the lack of viable investment projects or macroeconomic instability leading to high rates. Such information, together with aggregate macroeconomic and business environment, can be used to specify more specifically the frontier and the bottlenecks to reaching and expanding the frontier.23
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54
below the possibilities frontier is the demand problem of self-exclusion, the appropriate policies would emphasize raising financial literacy. If the main problems lie in suboptimization of the credit supply, by contrast, a wider range of policy options can be considered, starting with competition policy that allows the entry of new players— be they banks or non-bank financial institutions—into the market. Regulatory policies can also be important to push the system toward the frontier of SME lending, including regulatory frameworks that enable leasing and factoring. Loan classification and provisioning rules can also affect SMEs’ access to finance, through reliance less on collateral than on forward-looking assessment of payment performance. Beyond targeting competition per se, governments can also try to encourage movement toward the possibilities frontier by addressing hindrances such as coordination failures, first mover disincentives, and obstacles to risk distribution and sharing. Although not easy to define in general terms because of their wide variety, these government interventions tend to share a common feature in creating incentives for private lenders and investors to step in, without unduly shifting risks and costs to the government.30 Among such policies are partial credit guarantees.31 Although they also exist on a private basis, governments and donors have been aggressively pushing to establish partial credit guarantees to overcome the limited access to bank credit faced by SMEs. By providing a partial guarantee, such a scheme can help overcome the lack of collateral of most SMEs, but issues of appropriate pricing, funding, and institutional structure are important. Although such schemes could be run on a self-sustainable basis, they often involve significant subsidies and contingent fiscal liabilities to cover losses. While it is difficult to compute such costs ex ante, it is even more difficult to measure the benefits, which would be partially captured by additionality—that is, the share of borrowers that would not have gained access to finance if it were not for the partial credit guarantee. There are only a few rigorous impact assessments of such schemes, but such evaluations are urgently needed given the popularity of this policy tool.32 Although the government often does not intervene directly in the market in the case of most PCG schemes— if credit assessment and monitoring remains with the banks—the past 40 years have seen many examples of market-substituting policies to foster SME lending, with the balance of results tipping heavily into the negative. Such policies include directed credit, often combined with interest rate subsidies, and the establishment of development finance institutions focused on SME lending. These policies share the problems of all governmentmanaged financial sector programs—the trade-off between commercial and social goals results in high losses and the non-sustainability of many of these programs. Undercutting market conditions results in crowding out
private providers, even where the latter would be willing to enter because of changes in the general business environment or because of technological advances. Political subversion of these programs often leads to corruption and the channeling of funds to political cronies or to specific electoral groups.33 A final group of policies, which we define as marketharnessing, tries to prevent the financial system from moving to an unsustainable equilibrium beyond the frontier through imprudent lending. Such imprudent lending binges can arise from the same competition that market-enabling policies try to foster if they are not accompanied by a properly defined regulatory and supervisory framework. Market-harnessing policies therefore aim at keeping banks’ incentives to take aggressive risks in check through a mix of measures aimed at strengthening market and supervisory discipline. Policymakers have to strike a fine balance between market-enabling policies that push financial institutions toward the frontier and market-harnessing policies that prevent them from moving beyond the frontier, with the balance varying from country to country.
Conclusions This paper has discussed the results of research over the past 10 years in the area of SME finance. Although we have learned a lot thus far, there is still a lot more to be learned. First, more data are needed, both on the importance of SMEs in the real economy and on their financing. The Enterprise Surveys have provided enormous opportunities for analysts and researchers, but still lack information—such as more detailed financing information—on many aspects of firms’ financial lives. Panel samples, where firms are revisited at regular intervals—as is the case in the Business Environment and Enterprise Performance Surveys (BEEPS) for former transition economies—would be good for a larger and broader sample of countries to test for the effect of policy reforms or changes in financial market structure over time. Surveys of informal enterprises and their constraints can provide additional important insights. Databases on entrepreneurs,34 along with surveys of potential and actual entrepreneurs,35 can provide important insight into the demand side of SME finance. In addition, impact evaluation of specific private interventions, as well as business models and government policies and interventions—such as partial credit guarantee schemes, for example—are urgently called for. The microfinance industry has benefitted substantially from the impact assessments that started some 10 years ago, and a similar undertaking might be very useful for the area of SME finance. In terms of policy recommendations, we have learned not only about the power of financial sector reform in fostering SME access to external finance, but also about the role of specific interventions, such as
25 See Berger and Udell 2006 and de la Torre et al. 2010. 26 Beck et al. 2010a. 27 This is consistent with evidence from the transition economies, where foreign banks went quickly down-market after their entry de Haas and Naaborg 2005. 28 Klapper 2006. 29 See, among others, Brown et al. 2009. 30 De la Torre et al. 2006. 31 See Beck et al. 2010b for an overview. 32 See Lelarge et al. 2010 for an assessment of the French credit guarantee scheme. 33 Cole 2009; Dinc 2005; and Khwaja and Mian 2005. 34 Klapper et al., 2010. 35 Djankov et al., 2006.
References Notes 1 Ayyagari et al. 2007; Hallberg 2000. 2 Ayyagari et al. 2008. 3 http://www.changemakers.com/en-us/SME-Finance. 4 See Biggs 2002 for an overview. 5 Beck et al. 2005a. 6 Klapper et al. 2006. 7 Other studies confirm these findings. Fisman and Sarria-Allende (2010) document how entry restrictions distort industrial competition, while Ciccone and Papaioannou (2007) show that countries with lower entry regulations see more entry in industries that are subject to expanding global demand and technology shifts. Using variation in the implementation of a business registration reform across Mexican municipalities, Bruhn (2008) finds a significant increase in registered enterprises as result of lower registration requirements and the introduction of a one-stop registration process. 8 Beck et al. 2006a; see also Figure 1. 9 Beck et al. 2005b. 10 Banerjee and Duflo 2004. 11 Zia 2008. 12 De Mel et al. 2008. 13 Beck et al. 2006a. 14 Beck et al. 2005b and 2006b.
Aghion, P., T. Fally, and S. Scarpetta. 2007. “Credit Constraints as a Barrier to the Entry and Post-Entry Growth of Firms.” Economic Policy 22 731–79. Ayyagari, M., T. Beck, and A. Demirgüç-Kunt. 2007. “Small and Medium Enterprises across the Globe: A New Database.” Small Business Economics 29 (4): 415–34. Ayyagari, M., A. Demirgüç-Kunt, and V. Maksimovic. 2008. “How Important Are Financing Constraints? The Role of Finance in the Business Environment.” The World Bank Economic Review 22 (3): 483–516. ———. 2010. “Firm Innovation in Emerging Markets: The Role of Finance, Governance, and Competition.” Journal of Financial and Quantitative Analysis, forthcoming. Banerjee, A. V. and E. Duflo. 2004 “Do Firms Want to Borrow More? Testing Credit Constraints Using a Directed Lending Program.” CEPR Discussion Paper 4681. London: Centre for Economic Policy Research. Beck, T. and A. de la Torre. 2007. “The Basic Analytics of Access to Financial Service.” Financial Markets, Institution and Instruments 16 (2): 79–117. Beck, T., A. Demirgüç-Kunt, and R. Levine. 2005a. “SMEs, Growth, and Poverty: Cross-Country Evidence.” Journal of Economic Growth 10 (3): 199–229. Beck, T., A. Demirgüç-Kunt, and V. Maksimovic. 2005b. “Financial and Legal Constraints to Firm Growth: Does Firm Size Matter?” Journal of Finance 60 (1): 137–77. Beck, T., A. Demirgüç-Kunt, L. Laeven, and V. Maksimovic. 2006a. “The Determinants of Financing Obstacles.” Journal of International Money and Finance 25 (6): 932–52.
15 Beck et al. 2005b. 16 Beck et al. 2008a. 17 Beck et al. 2006b. 18 Aghion et al. 2007. 19 Demirgüç-Kunt et al. 2007. 20 Ayyagari et al. 2010. 21 Beck and de la Torre 2007. 22 The World Bank’s Enterprise Surveys collect information about the business environment, how it is perceived by individual firms, how it changes over time, and about the various constraints to firm performance and growth. The full data are available to researchers and include all questions from the surveys at the firm level. See https://www.enterprisesurveys.org/Portal/Login.aspx? ReturnUrl=/Portal/elibrary.aspx%3flibid%3d14&libid=14. 23 See Brown et al. 2011 for such an analysis specifically for Central and Eastern Europe. 24 Berger and Udell 1998.
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
credit registries. However, one size does not fit all. The concept of the access possibilities frontier described above allows a more rigorous analysis of bottlenecks for SME finance in a specific country. This has to take into account that the population of SMEs differs significantly across countries, ranging from large number of microenterprises in many African countries to more formal small businesses in East Asia. A final caveat: while stressing the importance of SME finance, one should not overlook other growth constraints SMEs face that can make any alleviation of financing constraints useless. Finally, although SME constraints are an important growth constraint, the net benefit of any government intervention in this area should be compared with the net benefit of interventions in other areas, such as health or education.
Beck, T., A. Demirgüç-Kunt, and V. Maksimovic. 2006b. “The Influence of Financial and Legal Institutions and Firm Size.” Journal of Banking & Finance 30 (11): 2995–3015. Beck, T., A. Demirgüç-Kunt, L. Laeven, and R. Levine. 2008a. “Finance, Firm Size, and Growth.” Journal of Money, Credit, and Banking 40 (7): 1379–1405. Beck, T., A. Demirgüç-Kunt, and V. Maksimovic. 2008b. “Financing Patterns Around the World: Are Small Firms Different?” Journal of Financial Economics 89 (3): 467–87. Beck, T., A. Demirgüç-Kunt, and M. S. Martinez Peria. 2010a. “Banking Financing for SMEs: Evidence Across Countries and Bank Ownership Types.” Journal of Financial Services Research, forthcoming. Beck, T., L. Klapper and J. C. Mendoza. 2010b. “The Typology of Partial Credit Guarantees around the World.” Journal of Financial Stability 6 (1): 10–25.
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1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
Berger, A. N. and G. F. Udell. 1998. “The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle.” Journal of Banking & Finance 22 (6–8): 613–73. ———. 2006. “A More Complete Conceptual Framework for SME Finance.” Journal of Banking & Finance 30 (11): 2945–66. Biggs, T. 2002. “Is Small Beautiful and Worthy of Subsidy? Literature Review.” IFC mimeo. Brown, M., T. Jappelli, and M. Pagano, 2009. “Information Sharing and Credit: Firm-Level Evidence from Transition Countries.” Journal of Financial Intermediation 18 (2): 151–72. Brown, M., S. Ongena, A. Popov, and P. Yesin. 2011. “Who Needs Credit and Who Gets Credit in Eastern Europe?” Economic Policy, forthcoming. Bruhn, M. 2008. “License to Sell: The Effect of Business Registration Reform on Entrepreneurial Activity in Mexico.” World Bank Policy Research Working Paper No. 4538. Washington, DC: World Bank. Cole, S. 2009. “Fixing Market Failures or Fixing Elections? Agricultural Credit in India.” American Economic Journal: Applied Economics 1 (1): 219–50. De Haas, R. and I. Naaborg. 2005. “Does Foreign Bank Entry Reduce Small Firms’ Access to Credit? Evidence from European Transition Economies.” De Nederlandsche Bank Working Paper No. 50. Amsterdam: Netherlands. De la Torre, A., J. C. Gozzi, and S. Schmukler. 2006. “Innovative Experiences in Access to Finance: Market Friendly Roles for the Visible Hand.” Latin America Regional Study. Washington, DC: World Bank. De la Torre, A., M. Martinez Peria, and S. Schmukler. 2010. “Bank Involvement with SMEs: Beyond Relationship Lending.” Journal of Banking & Finance, forthcoming.
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De Mel, S., D. McKenzie, and C. Woodruff. 2008. “Returns to Capital in Microenterprises: Evidence from a Field Experiment.” Quarterly Journal of Economics 123 (4): 1329–72. Demirgüç-Kunt, A., L. Klapper, and G. Panos. 2007. “The Origins of SelfEmployment.” World Bank Research Department mimeo. Dinç, I. S. 2005. “Politicians and Banks: Political Influences on Government-Owned Banks in Emerging Countries.” Journal of Financial Economics 77 (2): 453–79. Djankov, S., Y. Qian, G. Roland, and E. Zhuravskya. 2006. “Entrepreneurship in China and Russia Compared.” Journal of the European Economic Association 4 (2–3): 352–65. Fisman, R. and V. Saria-Allende. 2010. “Regulation of Entry and the Distortion of Industrial Organization.” Journal of Applied Economics 13 (May): 91–111. Hallberg, K. 2000. “A Market-Oriented Strategy for Small and MediumScale Enterprises.” IFC Discussion Paper No. 48. Washington, DC: World Bank. Khwaja, A. I. and A. Mian. 2005. “Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market.” Quarterly Journal of Economics 120 (4): 1371–1411. Klapper, L. 2006. “The Role of ‘Reverse Factoring’ in Supplier Financing of Small and Medium Sized Enterprises.” Journal of Banking & Finance 30 (11): 3111–30. Klapper, L., R. Amit, M. Guillen, and J. M. Quesada. 2010. “Entrepreneurship and Firm Formation Across Countries.” In International Differences in Entrepreneurship, ed. J. Lerner and A. Schoar. Cambridge, MA: NBER Books, National Bureau of Economic Research. Klapper, L., L. Laeven, and R. Rajan. 2006. "Entry Regulation as a Barrier to Entrepreneurship." Journal of Financial Economics 82 (3): 591–629. Lelarge, C., D. Sraer, and D. Thesmar. 2010. “Entrepreneurship and Credit Constraints: Evidence from a French Loan Guarantee Program.” In International Differences in Entrepreneurship, ed. J. Lerner and A. Schoar. Cambridge, MA: NBER Books, National Bureau of Economic Research.
Papaioannou, E. 2009. “What Drives International Financial Flows? Politics, Institutions and Other Determinants.” Journal of Development Economics 88 (2): 269–81. Zia, B. 2008. “Export Incentives, Financial Constraints, and the (Mis)allocation of Credit: Micro-Level Evidence from Subsidized Export Loans.” Journal of Financial Economics 87 (2): 498–527.
Part 2 Country/Economy Profiles
How to Read the Country/Economy Profiles
How to Read the Country/Economy Profiles
The Profiles section presents a four-page profile for each of the 57 economies covered by The Financial Development Report 2010.
Argentina Key indicators
Financial assets by major type, 2008 18.3%
Population (millions), 2009 .......................................................40.1
US$ bn
GDP (US$ billions), 2009 .........................................................310.1
Public debt securities .......159.7 Private debt securities........16.9 Banking deposits .................57.1 Equity securities ..................52.3
GDP (current prices) per capita, 2009 ..............................7,725.7 GDP (PPP) as share (%) of world total, 2009 ........................0.81
55.8% 20.0%
Compound annual growth rate of real GDP (%), 2005–09 ..4.88
Total
286.0
5.9%
Page 1
Total/GDP 87.0%
Financial Development Index 2010
Key indicators
Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................52 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 of April 2010.
1st pillar: Institutional environment .........................................52
3.2
Financial sector liberalization ....................................................49 Corporate governance.................................................................48 Legal and regulatory issues .......................................................56 Contract enforcement..................................................................43
2.7 3.8 2.6 3.7
2nd pillar: Business environment .............................................42
4.0
Human capital ...............................................................................27 Taxes...............................................................................................53 Infrastructure ................................................................................35 Cost of doing business ................................................................44
4.4 3.4 3.7 4.5
3rd pillar: Financial stability......................................................54
3.2
Currency stability..........................................................................31 Banking system stability..............................................................53 Risk of sovereign debt crisis ......................................................54
3.9 3.3 2.5
• 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, Jordan, Morocco, or Romania. • 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.
3
4
5
6
7
1
INPUTS
2
3
4
5
6
7
2
3
4
5
6
7
Financial intermediation 4th pillar: Banking financial services......................................43
2.9
Size index.......................................................................................46 Efficiency index.............................................................................54 Financial information disclosure..................................................2
1.4 3.1 5.7
5th pillar: Non-banking financial services .............................25
2.5
IPO activity.....................................................................................41 M&A activity..................................................................................50 Insurance .......................................................................................30 Securitization...................................................................................7
1.4 1.2 2.7 4.6
Financial assets by major type, 2008
• Public debt figures are from the Economist Intelligence Unit’s CountryData Database, as accessed in August 2010. Private debt data come from the Bank of International Settlements Quarterly Review, June 2010, and are presented as of 2009. Data on bank deposits are from the IMF International Financial Statistics database, electronic version, accessed September 2010 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 September 2010.
2
Factors, policies, and institutions
6th pillar: Financial markets......................................................53
1.4
Foreign exchange markets .........................................................44 Derivatives markets....................................................................n/a Equity market development ........................................................53 Bond market development..........................................................39
1.0 n/a 1.2 1.9 1
59
Financial access 7th pillar: Financial access........................................................56
2.2
Commercial access......................................................................56 Retail access.................................................................................40
2.4 2.0 1
2
3
4
5
6
7
OUTPUTS
N
For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
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 57 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 thematically. The three themes—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. After the pillar or subpillar name, the first column shows each economy’s rank for that pillar or subpillar among the 57 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.
How to Read the Country/Economy Profiles
Pages 2–4
Argentina
The Financial Development Index in detail
These pages present 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 (black 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 RANK/57
SCORE
Development Disadvantage
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................48 ..... ...............–0.8 Commitments to WTO agreement on trade in services.......40 ..... ...............43.5 Domestic financial sector liberalization .................................37 ..... .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................39 ..... Efficacy of corporate boards .................................................48 ..... Reliance on professional management .................................37 ..... Willingness to delegate.........................................................38 ..... Strength of auditing and reporting standards .......................55 ..... Ethical behavior of firms........................................................52 ..... Protection of minority shareholders’ interests ......................52 .....
.................4.1 .................4.2 .................4.5 .................3.7 .................3.8 .................3.3 .................3.5
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................49 ..... Centralization of economic policymaking ..............................56 ..... Regulation of securities exchanges.......................................51 ..... Property rights.......................................................................55 ..... Intellectual property protection .............................................56 ..... Diversion of public funds.......................................................55 ..... Public trust of politicians .......................................................56 ..... Corruption perceptions index ................................................46 ..... Strength of legal rights index ................................................40 ..... Central bank transparency.....................................................29 .....
.................2.6 .................1.7 .................3.6 .................2.7 .................2.5 .................2.1 .................1.5 .................2.9 .................4.0 .................7.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................53 ..... Judicial independence ...........................................................54 ..... Irregular payments in judicial decisions.................................49 ..... Time to enforce a contract ....................................................40 ..... Number of procedures to enforce a contract .......................34 ..... Strength of investor protection index....................................44 ..... Cost of enforcing contracts ...................................................12 .....
.................2.2 .................2.6 .................3.1 .............590.0 ...............36.0 .................4.7 ...............16.5
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
.................5.3 .................3.2 .................3.8
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
2.05 2.06
Human capital Quality of management schools............................................13 ..... Quality of math and science education.................................46 ..... Extent of staff training...........................................................41 ..... Local availability of specialized research and training services .............................................................31 ..... Brain drain and ease of hiring foreign labor ..........................34 ..... Tertiary enrollment.................................................................14 .....
.................4.5 .................3.9 ...............67.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................48 ..... .................3.7 Distortive effect of taxes and subsidies on competition.......57 ..... .................2.3 Marginal tax variation ............................................................25 ..... .................5.6 Time to pay taxes..................................................................46 ..... .............453.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................50 ..... Quality of telephone infrastructure .......................................46 ..... Internet users .......................................................................39 ..... Broadband Internet subscribers ............................................31 ..... Telephone lines......................................................................31 ..... Mobile telephone subscribers...............................................21 .....
.................3.5 .................5.6 ...............28.1 .................8.0 ...............24.4 .............116.6
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................38 ..... ................11.0
Denmark................................0.0
2nd pillar: Business environment
• For those economies ranked in the top 10 in the overall FDI, individual variables ranked from 1 through 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 8 overall, its 6th rank in the variable Bank deposits to GDP makes this variable a development advantage, whereas Foreign exchange derivatives turnover: Currency swaps, on which it ranks 24th, constitutes a development disadvantage for the country.
60
• For those economies ranked from 11 through 27 in the overall FDI, variables ranked higher than the economy’s overall rank are considered to be advantages. Any variables ranked equal to or lower than the economy’s overall rank are considered to be disadvantages. In the case of Malaysia, ranked 18th overall, its 10th rank in the variable Bank deposits to GDP makes this variable a development advantage, whereas Foreign exchange derivatives turnover: Currency swaps, on which it ranks 30th, constitutes a development 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 52nd overall, its rank of 22 in Relative value-added of insurance constitutes a development advantage for the country, whereas its 56th rank in the variable Bank deposits to GDP makes this variable a development 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.
2.01 2.02 2.03 2.04
(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.
List of Countries/Economies
List of Countries/Economies
Country/Economy
Page
Country/Economy
Page
Philippines
214
Argentina
62
Australia
66
Poland
218
Austria
70
Romania*
222
Bahrain
74
Russian Federation
226
Bangladesh
78
Saudi Arabia
230
Belgium
82
Singapore
234
Brazil
86
Slovak Republic
238
Canada
90
South Africa
242
Chile
94
Spain
246
China Colombia
98 102
Sweden
250
Switzerland
254
Czech Republic
106
Thailand
258
Denmark
110
Turkey
262
Egypt
114
Ukraine
266
Finland
118
United Arab Emirates
270
France
122
United Kingdom
274
Germany
126
United States
278
Hong Kong SAR
130
Venezuela
282
Hungary
134
Vietnam
286
India
138
Indonesia
142
Ireland
146
Israel
150
Italy
154
Japan
158
Jordan
162
Kazakhstan
166
Korea, Rep.
170
Kuwait
174
Malaysia
178
Mexico
182
Morocco*
186
Netherlands
190
Nigeria
194
Norway
198
Pakistan
202
Panama
206
Peru
210
* Added in 2010
61
2: Country/Economy Profiles
Argentina Key indicators
Financial assets by major type, 2008 18.3%
Population (millions), 2009 .......................................................40.1
US$ bn
GDP (US$ billions), 2009 .........................................................310.1 GDP (current prices) per capita, 2009 ..............................7,725.7 GDP (PPP) as share (%) of world total, 2009 ........................0.81
55.8% 20.0%
Compound annual growth rate of real GDP (%), 2005–09 ..4.88
n n n n
Public debt securities .......159.7 Private debt securities........16.9 Banking deposits .................57.1 Equity securities ..................52.3 Total
286.0
5.9%
Total/GDP 87.0%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................52 2.8 1
2
3
4
5
6
7
Factors, policies, and institutions
62
1st pillar: Institutional environment .........................................52
3.2
Financial sector liberalization ....................................................49 Corporate governance.................................................................48 Legal and regulatory issues .......................................................56 Contract enforcement..................................................................43
2.7 3.8 2.6 3.7
2nd pillar: Business environment .............................................42
4.0
Human capital ...............................................................................27 Taxes...............................................................................................53 Infrastructure ................................................................................35 Cost of doing business ................................................................44
4.4 3.4 3.7 4.5
3rd pillar: Financial stability......................................................54
3.2
Currency stability..........................................................................31 Banking system stability..............................................................53 Risk of sovereign debt crisis ......................................................54
3.9 3.3 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......................................43
2.9
Size index .......................................................................................46 Efficiency index.............................................................................54 Financial information disclosure..................................................2
1.4 3.1 5.7
5th pillar: Non-banking financial services .............................25
2.5
IPO activity.....................................................................................41 M&A activity..................................................................................50 Insurance .......................................................................................30 Securitization...................................................................................7
1.4 1.2 2.7 4.6
6th pillar: Financial markets......................................................53
1.4
Foreign exchange markets .........................................................44 Derivatives markets....................................................................n/a Equity market development ........................................................53 Bond market development..........................................................39
1.0 n/a 1.2 1.9 1
Financial access 7th pillar: Financial access........................................................56
2.2
Commercial access......................................................................56 Retail access.................................................................................40
2.4 2.0 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................48 .....n ...............–0.8 Commitments to WTO agreement on trade in services.......40 .....n...............43.5 Domestic financial sector liberalization .................................37 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................39 .....n.................4.1 Efficacy of corporate boards .................................................48 .....n.................4.2 Reliance on professional management .................................37 .....n.................4.5 Willingness to delegate.........................................................38 .....n.................3.7 Strength of auditing and reporting standards .......................55 .....n.................3.8 Ethical behavior of firms........................................................52 .....n.................3.3 Protection of minority shareholders’ interests ......................52 .....n.................3.5
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................49 .....n.................2.6 Centralization of economic policymaking ..............................56 .....n .................1.7 Regulation of securities exchanges.......................................51 .....n.................3.6 Property rights.......................................................................55 .....n.................2.7 Intellectual property protection .............................................56 .....n.................2.5 Diversion of public funds.......................................................55 .....n.................2.1 Public trust of politicians .......................................................56 .....n .................1.5 Corruption perceptions index ................................................46 .....n.................2.9 Strength of legal rights index ................................................40 .....n.................4.0 Central bank transparency.....................................................29 .....n .................7.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................53 .....n.................2.2 Judicial independence ...........................................................54 .....n.................2.6 Irregular payments in judicial decisions.................................49 .....n.................3.1 Time to enforce a contract ....................................................40 .....n.............590.0 Number of procedures to enforce a contract .......................34 .....n...............36.0 Strength of investor protection index....................................44 .....n.................4.7 Cost of enforcing contracts ...................................................12 .....n ...............16.5
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools............................................13 .....n.................5.3 Quality of math and science education.................................46 .....n.................3.2 Extent of staff training...........................................................41 .....n.................3.8 Local availability of specialized research and training services .............................................................31 .....n.................4.5 Brain drain and ease of hiring foreign labor ..........................34 .....n.................3.9 Tertiary enrollment.................................................................14 .....n ...............67.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................48 .....n.................3.7 Distortive effect of taxes and subsidies on competition.......57 .....n.................2.3 Marginal tax variation ............................................................25 .....n.................5.6 Time to pay taxes..................................................................46 .....n.............453.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................50 .....n.................3.5 Quality of telephone infrastructure .......................................46 .....n.................5.6 Internet users .......................................................................39 .....n...............28.1 Broadband Internet subscribers ............................................31 .....n.................8.0 Telephone lines......................................................................31 .....n...............24.4 Mobile telephone subscribers...............................................21 .....n .............116.6
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................38 .....n................11.0
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Argentina
63
2: Country/Economy Profiles
Argentina Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................47 .....n .................7.0 Cost of closing a business ....................................................29 .....n ...............12.0 Time to start a business........................................................38 .....n ...............27.0 Time to register property ......................................................44 .....n...............52.0 Time to close a business ......................................................33 .....n.................2.8
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................45 .....n ...............–1.6 External vulnerability indicator...............................................26 .....n .............100.2 Current account balance to GDP...........................................24 .....n.................2.2 Dollarization vulnerability indicator ........................................31 .....n...............25.8 External debt to GDP (developing economies) .....................20 .....n...............38.2 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................57 .....n.................4.5 Financial strengths indicator..................................................41 .....n.................3.0 Aggregate measure of real estate bubbles ...........................13 .....n.................5.9 Financial Stress Index .............................................................8 .....n .................1.2 Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises.........................................55 .....n .............165.9
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................55 .....n.................5.0 Foreign currency sovereign rating .........................................55 .....n.................5.0 Aggregate macroprudential indicator ....................................35 .....n.................4.8 Manageability of public debt ................................................32 .....n...............48.7 Credit default swap spreads .................................................51 .....n.............970.1
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
64
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....................................53 .....n...............20.5 Central bank assets to GDP ..................................................10 .....n.................5.8 Financial system deposits to GDP ........................................53 .....n...............20.1 M2 to GDP ............................................................................57 .....n ...............27.6 Private credit to GDP.............................................................53 .....n ...............14.0 Bank deposits to GDP ...........................................................56 .....n...............20.1 Money market instruments to GDP ......................................23 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................52 .....n.................2.4 Bank overhead costs .............................................................54 .....n .................7.7 Public ownership of banks ....................................................35 .....n................11.7 Bank operating costs to assets .............................................57 .....n .................7.0 Non-performing bank loans to total loans .............................16 .....n.................3.1
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....n .............100.0 Public credit registry coverage ................................................5 .....n...............34.3
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................34 .....n.................0.4 IPO proceeds amount ...........................................................32 .....n.................0.2 Share of world IPOs ..............................................................44 .....n.................0.2
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.1 M&A transaction value to GDP .............................................51 .....n .................1.3 Share of total number of M&A deals ....................................40 .....n.................0.3
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................44 .....n.................0.5 Non–life insurance density ...................................................24 .....n.................2.1 Real growth of direct insurance premiums .............................8 .....n.................0.1 Life insurance coverage ........................................................38 .....n.................0.2 Non–life insurance coverage .................................................21 .....n.................0.8 Relative value-added of insurance to GDP ............................22 .....n .................1.3
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................29 .....n .................1.2 Share of total number of securitization deals .........................4 .....n.................3.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Argentina
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................38 .....n.................0.1 Outright forward foreign exchange turnover .........................42 .....n.................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 ...................................................45 .....n................17.0 Stock market capitalization to GDP .......................................46 .....n...............30.4 Stock market value traded to GDP........................................40 .....n.................4.8 Number of listed companies per 10,000 people...................38 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............33 .....n.................3.6 Public domestic bond market capitalization to GDP .............36 .....n ...............16.2 Private international bonds to GDP .......................................45 .....n.................2.0 Public international bonds to GDP ..........................................8 .....n ...............15.1 Local currency corporate bond issuance to GDP ..................38 .....n.................0.0
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
65 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................55 .....n.................3.4 Venture capital availability......................................................57 .....n .................1.9 Ease of access to credit........................................................48 .....n.................2.4 Financing through local equity market ..................................55 .....n.................2.4 Ease of access to loans ........................................................57 .....n .................1.7 Foreign direct investment to GDP.........................................40 .....n.................2.9 Retail access Market penetration of bank accounts ...................................23 .....n........90,628.8 Commercial bank branches ...................................................31 .....n ...............13.2 Total number of ATMs...........................................................36 .....n...............36.9 Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .....................................................................21 .....n.................0.8
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Australia Key indicators
Financial assets by major type, 2008 6.1%
Population (millions), 2009 .......................................................21.9
US$ bn
23.5%
GDP (US$ billions), 2009 .........................................................997.2 GDP (current prices) per capita, 2009 ............................45,586.5 GDP (PPP) as share (%) of world total, 2009 ........................1.17
41.4%
Compound annual growth rate of real GDP (%), 2005–09 ..2.19
n n n n
Public debt securities .......175.5 Private debt securities...1,186.8 Banking deposits ...............831.9 Equity securities ................675.6 Total
29.0%
2,869.9
Total/GDP 270.9%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index........................................................5 5.0 1
2
3
4
5
6
7
Factors, policies, and institutions
66
1st pillar: Institutional environment .........................................18
5.5
Financial sector liberalization ....................................................28 Corporate governance...................................................................8 Legal and regulatory issues .........................................................7 Contract enforcement....................................................................7
5.3 5.5 5.4 5.7
2nd pillar: Business environment .............................................13
5.5
Human capital ...............................................................................11 Taxes...............................................................................................20 Infrastructure ................................................................................18 Cost of doing business ..................................................................6
5.2 5.1 5.4 6.3
3rd pillar: Financial stability........................................................9
5.2
Currency stability..........................................................................42 Banking system stability................................................................9 Risk of sovereign debt crisis ........................................................1
3.3 5.5 6.7 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........................................7
5.1
Size index .........................................................................................8 Efficiency index...............................................................................4 Financial information disclosure..................................................3
4.3 6.4 4.0
5th pillar: Non-banking financial services ...............................8
4.0
IPO activity.......................................................................................9 M&A activity....................................................................................5 Insurance .......................................................................................17 Securitization.................................................................................11
3.5 5.3 3.3 3.8
6th pillar: Financial markets........................................................6
4.7
Foreign exchange markets ...........................................................7 Derivatives markets .......................................................................5 Equity market development ..........................................................5 Bond market development..........................................................23
4.8 6.7 5.3 2.6 1
Financial access 7th pillar: Financial access..........................................................1
5.2
Commercial access......................................................................11 Retail access...................................................................................1
4.1 6.4 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................30 .....n .................1.2 Commitments to WTO agreement on trade in services.......37 .....n...............28.8 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ................................8 .....n.................4.9 Efficacy of corporate boards ...................................................6 .....n.................5.5 Reliance on professional management ...................................7 .....n.................6.0 Willingness to delegate .........................................................10 .....n.................4.9 Strength of auditing and reporting standards .........................8 .....n.................5.8 Ethical behavior of firms..........................................................9 .....n.................6.2 Protection of minority shareholders’ interests ........................9 .....n.................5.2
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................21 .....n.................3.4 Centralization of economic policymaking ................................6 .....n.................4.4 Regulation of securities exchanges.........................................8 .....n.................5.5 Property rights .......................................................................12 .....n.................5.9 Intellectual property protection..............................................11 .....n.................5.6 Diversion of public funds.......................................................10 .....n.................5.8 Public trust of politicians........................................................11 .....n.................4.6 Corruption perceptions index ..................................................7 .....n.................8.7 Strength of legal rights index ..................................................4 .....n.................9.0 Central bank transparency.....................................................14 .....n ...............10.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ........................................3 .....n.................5.7 Judicial independence .............................................................7 .....n.................6.3 Irregular payments in judicial decisions.................................15 .....n.................6.2 Time to enforce a contract ....................................................15 .....n.............395.0 Number of procedures to enforce a contract .........................8 .....n...............28.0 Strength of investor protection index....................................27 .....n.................5.7 Cost of enforcing contracts...................................................21 .....n...............20.7
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools............................................14 .....n.................5.3 Quality of math and science education.................................12 .....n.................4.9 Extent of staff training...........................................................16 .....n.................4.8 Local availability of specialized research and training services .............................................................18 .....n.................5.3 Brain drain and ease of hiring foreign labor ..........................24 .....n.................4.2 Tertiary enrollment ..................................................................9 .....n...............75.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................15 .....n.................6.2 Distortive effect of taxes and subsidies on competition .......17 .....n.................4.5 Marginal tax variation ............................................................30 .....n.................9.0 Time to pay taxes ..................................................................10 .....n..............107.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................23 .....n.................5.2 Quality of telephone infrastructure .......................................44 .....n.................5.9 Internet users .......................................................................14 .....n...............72.0 Broadband Internet subscribers ............................................14 .....n...............24.4 Telephone lines......................................................................13 .....n...............44.5 Mobile telephone subscribers...............................................28 .....n .............105.0
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business .....................................................9 .....n.................0.8
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Australia
67
2: Country/Economy Profiles
Australia Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................36 .....n.................4.9 Cost of closing a business ....................................................17 .....n.................8.0 Time to start a business..........................................................1 .....n.................2.0 Time to register property ........................................................5 .....n.................5.0 Time to close a business ........................................................8 .....n .................1.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................24 .....n .................1.5 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................49 .....n ...............–4.9 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................15 .....n .............–61.2
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises....................................................1 .....n.................0.0 Financial strengths indicator....................................................1 .....n.................9.0 Aggregate measure of real estate bubbles...........................31 .....n.................4.7 Financial Stress Index............................................................15 .....n.................3.8 Tier 1 capital ratio..................................................................33 .....n.................8.1 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator.....................................14 .....n.................5.6 Manageability of public debt ..................................................9 .....n...............22.0 Credit default swap spreads..................................................12 .....n...............59.6
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
68
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............121.2 Central bank assets to GDP ....................................................7 .....n.................6.2 Financial system deposits to GDP ........................................12 .....n ...............97.6 M2 to GDP ............................................................................18 .....n...............99.4 Private credit to GDP.............................................................12 .....n .............121.4 Bank deposits to GDP ...........................................................13 .....n...............98.1 Money market instruments to GDP ........................................7 .....n.................5.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................9 .....n.................5.1 Bank overhead costs .............................................................15 .....n .................1.6 Public ownership of banks ....................................................22 .....n.................2.9 Bank operating costs to assets .............................................17 .....n .................1.3 Non-performing bank loans to total loans ...............................1 .....n .................1.1
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....n .............100.0 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................9 .....n.................2.1 IPO proceeds amount ...........................................................23 .....n.................0.3 Share of world IPOs ................................................................9 .....n.................5.0
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................3.0 M&A transaction value to GDP ...............................................7 .....n ...............10.5 Share of total number of M&A deals ......................................6 .....n.................4.2
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................20 .....n.................3.3 Non–life insurance density ...................................................18 .....n.................2.8 Real growth of direct insurance premiums ...........................12 .....n.................0.1 Life insurance coverage ........................................................21 .....n.................0.7 Non–life insurance coverage .................................................29 .....n.................0.6 Relative value-added of insurance to GDP ............................12 .....n.................2.1
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................12 .....n.................2.8 Share of total number of securitization deals........................15 .....n .................1.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Australia
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ..............................................6 .....n.................3.5 Outright forward foreign exchange turnover ...........................8 .....n.................3.4 Foreign exchange swap turnover ............................................7 .....n.................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 .....n .................1.1 Interest rate derivatives turnover: Swaps..............................10 .....n .................1.1 Interest rate derivatives turnover: Options............................12 .....n.................0.5 Foreign exchange derivatives turnover: Currency swaps ........3 .....n.................5.6 Foreign exchange derivatives turnover: Options .....................8 .....n .................1.9
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................13 .....n .............141.2 Stock market capitalization to GDP .........................................9 .....n .............162.6 Stock market value traded to GDP..........................................9 .....n.............236.1 Number of listed companies per 10,000 people.....................4 .....n .................1.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ..............8 .....n...............60.3 Public domestic bond market capitalization to GDP .............35 .....n................17.2 Private international bonds to GDP .......................................12 .....n ...............51.1 Public international bonds to GDP ........................................36 .....n .................1.5 Local currency corporate bond issuance to GDP ..................31 .....n.................0.2
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
69 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication..............................................10 .....n.................6.1 Venture capital availability........................................................9 .....n.................3.8 Ease of access to credit .......................................................35 .....n.................2.7 Financing through local equity market...................................11 .....n.................4.6 Ease of access to loans.........................................................12 .....n.................3.9 Foreign direct investment to GDP.........................................21 .....n.................4.7 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................11 .....n ...............31.9 Total number of ATMs.............................................................3 .....n .............156.7 Total number of point of sale (POS) devices...........................2 .....n..........4,039.6 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Austria Key indicators
Financial assets by major type, 2008 6.1%
Population (millions), 2009 .........................................................8.3
21.9%
GDP (US$ billions), 2009 .........................................................381.9 GDP (current prices) per capita, 2009 ............................45,989.2
US$ bn
n n n n
30.8%
GDP (PPP) as share (%) of world total, 2009 ........................0.46 Compound annual growth rate of real GDP (%), 2005–09 ..1.05
Public debt securities .......259.9 Private debt securities......487.9 Banking deposits ...............364.9 Equity securities ..................72.3 Total
1,185.0
41.2%
Total/GDP 285.7%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................19 4.2 1
2
3
4
5
6
7
Factors, policies, and institutions
70
1st pillar: Institutional environment .........................................12
5.7
Financial sector liberalization ......................................................1 Corporate governance.................................................................13 Legal and regulatory issues .......................................................12 Contract enforcement..................................................................16
7.0 5.1 5.1 5.4
2nd pillar: Business environment .............................................16
5.4
Human capital ...............................................................................18 Taxes...............................................................................................11 Infrastructure ................................................................................10 Cost of doing business ................................................................28
4.8 5.7 5.8 5.2
3rd pillar: Financial stability......................................................21
4.8
Currency stability..........................................................................33 Banking system stability..............................................................26 Risk of sovereign debt crisis ......................................................11
3.9 4.7 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......................................18
4.2
Size index .......................................................................................16 Efficiency index.............................................................................18 Financial information disclosure................................................32
3.7 5.7 2.2
5th pillar: Non-banking financial services .............................40
2.0
IPO activity.....................................................................................28 M&A activity..................................................................................29 Insurance .......................................................................................34 Securitization.................................................................................46
2.0 2.0 2.6 1.3
6th pillar: Financial markets......................................................21
2.9
Foreign exchange markets .........................................................20 Derivatives markets .....................................................................22 Equity market development ........................................................34 Bond market development............................................................4
1.4 2.4 2.2 4.9 1
Financial access 7th pillar: Financial access..........................................................8
4.5
Commercial access......................................................................32 Retail access...................................................................................4
3.5 5.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n ...............71.6 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................21 .....n.................4.5 Efficacy of corporate boards .................................................20 .....n.................5.0 Reliance on professional management .................................17 .....n.................5.3 Willingness to delegate .........................................................15 .....n.................4.6 Strength of auditing and reporting standards........................10 .....n.................5.7 Ethical behavior of firms ........................................................10 .....n.................6.2 Protection of minority shareholders’ interests ......................22 .....n.................4.8
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................13 .....n.................3.6 Centralization of economic policymaking ................................9 .....n.................4.4 Regulation of securities exchanges.......................................28 .....n.................4.7 Property rights.........................................................................6 .....n.................6.2 Intellectual property protection ...............................................8 .....n.................5.7 Diversion of public funds.......................................................13 .....n.................5.7 Public trust of politicians .......................................................15 .....n.................4.0 Corruption perceptions index ................................................13 .....n .................7.9 Strength of legal rights index ................................................19 .....n .................7.0 Central bank transparency.......................................................3 .....n................11.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................16 .....n.................4.4 Judicial independence ...........................................................14 .....n.................5.8 Irregular payments in judicial decisions.................................13 .....n.................6.3 Time to enforce a contract ....................................................17 .....n .............397.0 Number of procedures to enforce a contract .........................4 .....n...............25.0 Strength of investor protection index....................................52 .....n.................4.0 Cost of enforcing contracts ...................................................17 .....n...............18.0
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................23 .....n.................4.9 Quality of math and science education.................................20 .....n.................4.7 Extent of staff training...........................................................13 .....n.................4.9 Local availability of specialized research and training services ...............................................................6 .....n.................5.9 Brain drain and ease of hiring foreign labor ..........................30 .....n.................3.9 Tertiary enrollment ................................................................27 .....n ...............51.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................12 .....n.................6.3 Distortive effect of taxes and subsidies on competition.......20 .....n.................4.5 Marginal tax variation ............................................................13 .....n ...............–9.6 Time to pay taxes..................................................................20 .....n .............171.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................5 .....n.................6.4 Quality of telephone infrastructure .........................................9 .....n.................6.8 Internet users .......................................................................15 .....n ...............71.2 Broadband Internet subscribers ............................................19 .....n...............20.7 Telephone lines......................................................................19 .....n...............39.4 Mobile telephone subscribers.................................................9 .....n .............129.7
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................23 .....n.................5.1
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Austria
71
2: Country/Economy Profiles
Austria Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................34 .....n.................4.5 Cost of closing a business ....................................................39 .....n...............18.0 Time to start a business........................................................41 .....n...............28.0 Time to register property ......................................................29 .....n...............32.0 Time to close a business.......................................................11 .....n .................1.1
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................36 .....n.................0.4 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................21 .....n.................2.7 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................10 .....n .............–15.5
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................35 .....n.................2.0 Financial strengths indicator..................................................32 .....n.................4.0 Aggregate measure of real estate bubbles...........................25 .....n.................5.0 Financial Stress Index............................................................12 .....n .................1.9 Tier 1 capital ratio..................................................................22 .....n................11.0 Output loss during banking crises.........................................29 .....n...............34.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator ....................................25 .....n.................5.3 Manageability of public debt ................................................46 .....n ...............67.1 Credit default swap spreads..................................................16 .....n...............89.2
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
72
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............123.0 Central bank assets to GDP ..................................................23 .....n .................1.4 Financial system deposits to GDP ........................................15 .....n...............89.3 M2 to GDP ............................................................................16 .....n .............105.3 Private credit to GDP.............................................................13 .....n ..............111.6 Bank deposits to GDP ...........................................................16 .....n...............89.0 Money market instruments to GDP ........................................9 .....n.................3.9
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................34 .....n.................4.1 Bank overhead costs .............................................................37 .....n.................3.2 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................24 .....n .................1.6 Non-performing bank loans to total loans .............................10 .....n.................2.3
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................27 .....n...............39.2 Public credit registry coverage ..............................................19 .....n .................1.4
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................22 .....n.................0.9 IPO proceeds amount ...........................................................18 .....n.................0.4 Share of world IPOs ..............................................................40 .....n.................0.2
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.5 M&A transaction value to GDP .............................................28 .....n.................4.3 Share of total number of M&A deals ....................................29 .....n.................0.5
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................22 .....n.................2.7 Non–life insurance density ...................................................12 .....n.................3.3 Real growth of direct insurance premiums ...........................31 .....n.................0.0 Life insurance coverage ........................................................37 .....n.................0.2 Non–life insurance coverage .................................................38 .....n.................0.3 Relative value-added of insurance to GDP ............................31 .....n .................1.0
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................45 .....n.................0.5 Share of total number of securitization deals .......................44 .....n.................0.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Austria
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................20 .....n.................0.4 Outright forward foreign exchange turnover .........................19 .....n.................0.4 Foreign exchange swap turnover ..........................................20 .....n.................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 .....n.................0.2 Interest rate derivatives turnover: Swaps..............................18 .....n.................0.3 Interest rate derivatives turnover: Options............................20 .....n.................0.1 Foreign exchange derivatives turnover: Currency swaps ......18 .....n.................0.5 Foreign exchange derivatives turnover: Options ...................16 .....n.................0.3
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................26 .....n...............69.5 Stock market capitalization to GDP .......................................34 .....n...............63.5 Stock market value traded to GDP........................................28 .....n...............42.7 Number of listed companies per 10,000 people ..................n/a .........................n/a
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ..............6 .....n...............60.7 Public domestic bond market capitalization to GDP .............22 .....n...............32.1 Private international bonds to GDP .......................................10 .....n...............66.8 Public international bonds to GDP ..........................................3 .....n...............28.5 Local currency corporate bond issuance to GDP ..................10 .....n.................2.0
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
73 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................22 .....n.................5.6 Venture capital availability......................................................30 .....n.................2.9 Ease of access to credit........................................................42 .....n.................2.6 Financing through local equity market ..................................38 .....n.................3.8 Ease of access to loans ........................................................27 .....n.................3.2 Foreign direct investment to GDP.........................................31 .....n.................3.5 Retail access Market penetration of bank accounts .....................................5 .....n......240,270.8 Commercial bank branches ...................................................12 .....n ...............27.5 Total number of ATMs.............................................................7 .....n .............118.9 Total number of point of sale (POS) devices...........................1 .....n ..........4,174.1 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Bahrain Key indicators
Financial assets by major type, 2008 11.5%
Population (millions), 2009 .........................................................1.0
US$ bn
GDP (US$ billions), 2009 ...........................................................20.2
11.4%
GDP (current prices) per capita, 2009 ............................19,455.3
43.0%
GDP (PPP) as share (%) of world total, 2009 ........................0.04 Compound annual growth rate of real GDP (%), 2005–09 ..4.70
n n n n
Public debt securities ...........5.6 Private debt securities..........5.6 Banking deposits .................16.8 Equity securities ..................21.2 Total
49.3
34.2%
Total/GDP 232.1%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................23 4.0 1
2
3
4
5
6
7
Factors, policies, and institutions
74
1st pillar: Institutional environment .........................................21
5.0
Financial sector liberalization ....................................................15 Corporate governance.................................................................24 Legal and regulatory issues .......................................................25 Contract enforcement..................................................................31
6.7 4.8 4.2 4.3
2nd pillar: Business environment .............................................14
5.5
Human capital ...............................................................................32 Taxes.................................................................................................1 Infrastructure ................................................................................22 Cost of doing business ................................................................10
4.3 6.4 5.1 6.0
3rd pillar: Financial stability......................................................23
4.7
Currency stability..........................................................................50 Banking system stability................................................................3 Risk of sovereign debt crisis ......................................................22
2.4 5.9 5.5 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......................................14
4.6
Size index .....................................................................................n/a Efficiency index.............................................................................14 Financial information disclosure................................................36
n/a 5.9 2.0
5th pillar: Non-banking financial services .............................38
2.0
IPO activity...................................................................................n/a M&A activity..................................................................................27 Insurance .......................................................................................28 Securitization.................................................................................56
n/a 2.3 2.7 1.0
6th pillar: Financial markets......................................................42
1.7
Foreign exchange markets .........................................................35 Derivatives markets .....................................................................31 Equity market development ........................................................27 Bond market development ........................................................n/a
1.1 1.3 2.5 n/a 1
Financial access 7th pillar: Financial access..........................................................9
4.5
Commercial access........................................................................6 Retail access ...............................................................................n/a
4.5 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.2 Commitments to WTO agreement on trade in services .......17 .....n...............54.0 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................22 .....n.................4.5 Efficacy of corporate boards..................................................16 .....n.................5.0 Reliance on professional management .................................42 .....n.................4.2 Willingness to delegate.........................................................23 .....n.................4.2 Strength of auditing and reporting standards........................12 .....n.................5.6 Ethical behavior of firms........................................................21 .....n.................5.3 Protection of minority shareholders’ interests ......................13 .....n.................5.1
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation ...........................................9 .....n.................4.0 Centralization of economic policymaking ..............................41 .....n.................2.8 Regulation of securities exchanges .......................................10 .....n.................5.4 Property rights .......................................................................16 .....n.................5.6 Intellectual property protection .............................................18 .....n.................5.2 Diversion of public funds.......................................................15 .....n.................5.3 Public trust of politicians .......................................................14 .....n.................4.1 Corruption perceptions index ................................................24 .....n.................5.1 Strength of legal rights index ................................................40 .....n.................4.0 Central bank transparency.....................................................42 .....n.................3.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................31 .....n.................3.7 Judicial independence ...........................................................20 .....n.................5.0 Irregular payments in judicial decisions.................................22 .....n.................5.5 Time to enforce a contract ....................................................45 .....n.............635.0 Number of procedures to enforce a contract .......................55 .....n...............48.0 Strength of investor protection index....................................27 .....n.................5.7 Cost of enforcing contracts ...................................................11 .....n ...............14.7
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................27 .....n.................4.6 Quality of math and science education.................................26 .....n.................4.5 Extent of staff training...........................................................15 .....n.................4.9 Local availability of specialized research and training services .............................................................50 .....n.................3.9 Brain drain and ease of hiring foreign labor...........................11 .....n.................4.8 Tertiary enrollment ................................................................41 .....n...............32.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................6 .....n.................6.5 Distortive effect of taxes and subsidies on competition.........3 .....n.................5.7 Marginal tax variation ..............................................................8 .....n .............–14.7 Time to pay taxes....................................................................2 .....n...............36.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................19 .....n.................5.6 Quality of telephone infrastructure .......................................27 .....n.................6.4 Internet users .......................................................................26 .....n...............52.0 Broadband Internet subscribers ............................................25 .....n ...............14.2 Telephone lines......................................................................28 .....n...............28.4 Mobile telephone subscribers.................................................2 .....n.............185.8
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business .....................................................4 .....n.................0.5
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Bahrain
75
2: Country/Economy Profiles
Bahrain Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................10 .....n.................0.9 Cost of closing a business ....................................................27 .....n ...............10.0 Time to start a business........................................................14 .....n.................9.0 Time to register property ......................................................27 .....n ...............31.0 Time to close a business ......................................................30 .....n.................2.5
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................50 .....n ...............–3.3 External vulnerability indicator...............................................35 .....n.............775.2 Current account balance to GDP.............................................8 .....n ...............10.2 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................35 .....n .............169.6 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises....................................................1 .....n.................0.0 Financial strengths indicator..................................................22 .....n.................5.0 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................31 .....n ...............15.0 Foreign currency sovereign rating .........................................26 .....n ...............15.0 Aggregate macroprudential indicator ......................................2 .....n.................6.0 Manageability of public debt ................................................21 .....n...............38.8 Credit default swap spreads .................................................37 .....n .............175.7
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
76
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 ............................................................................19 .....n...............93.7 Private credit to GDP ............................................................n/a .........................n/a Bank deposits to GDP ...........................................................21 .....n...............79.3 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................6 .....n.................6.0 Bank overhead costs .............................................................38 .....n.................3.5 Public ownership of banks ....................................................39 .....n................17.3 Bank operating costs to assets .............................................13 .....n .................1.1 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................28 .....n...............34.9 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share .................................................................n/a .........................n/a IPO proceeds amount ..........................................................n/a .........................n/a Share of world IPOs .............................................................n/a .........................n/a
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.0 M&A transaction value to GDP .............................................14 .....n .................7.9 Share of total number of M&A deals ....................................55 .....n.................0.0
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................41 .....n.................0.7 Non–life insurance density ...................................................33 .....n .................1.8 Real growth of direct insurance premiums ..........................n/a .........................n/a Life insurance coverage ........................................................56 .....n.................0.0 Non–life insurance coverage .................................................56 .....n.................0.0 Relative value-added of insurance to GDP ..............................1 .....n.................5.9
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................56 .....n.................0.1 Share of total number of securitization deals .......................56 .....n.................0.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Bahrain
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................34 .....n.................0.1 Outright forward foreign exchange turnover .........................26 .....n.................0.2 Foreign exchange swap turnover ..........................................38 .....n.................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 .....n.................0.0 Interest rate derivatives turnover: Options...........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ......27 .....n.................0.1 Foreign exchange derivatives turnover: Options ...................24 .....n.................0.1
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................48 .....n.................5.0 Stock market capitalization to GDP ......................................n/a .........................n/a Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people.....................9 .....n.................0.5
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................22 .....n...............26.1 Public international bonds to GDP ........................................25 .....n.................3.5 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
77 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................23 .....n.................5.5 Venture capital availability......................................................14 .....n.................3.7 Ease of access to credit ........................................................12 .....n.................3.8 Financing through local equity market ..................................35 .....n.................3.9 Ease of access to loans ..........................................................1 .....n.................4.9 Foreign direct investment to GDP .........................................11 .....n.................8.9 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 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Bangladesh Key indicators
Financial assets by major type, 2008 8.1%
Population (millions), 2009 .....................................................164.7
US$ bn
GDP (US$ billions), 2009 ...........................................................94.5 40.9%
GDP (current prices) per capita, 2009 .................................573.8 GDP (PPP) as share (%) of world total, 2009 ........................0.35 Compound annual growth rate of real GDP (%), 2005–09 ..4.83
n n n n
Public debt securities .........33.6 Private debt securities.........n/a Banking deposits .................41.9 Equity securities ....................6.7 Total
51.0%
82.2
Total/GDP 97.2%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................55 2.6 1
2
3
4
5
6
7
Factors, policies, and institutions
78
1st pillar: Institutional environment .........................................56
2.5
Financial sector liberalization ....................................................57 Corporate governance.................................................................57 Legal and regulatory issues .......................................................52 Contract enforcement..................................................................57
1.0 3.4 2.9 2.8
2nd pillar: Business environment .............................................57
2.8
Human capital ...............................................................................57 Taxes...............................................................................................48 Infrastructure ................................................................................57 Cost of doing business ................................................................57
2.9 3.9 2.0 2.4
3rd pillar: Financial stability......................................................30
4.5
Currency stability............................................................................7 Banking system stability..............................................................28 Risk of sovereign debt crisis ......................................................49
5.5 4.6 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......................................45
2.8
Size index .......................................................................................36 Efficiency index.............................................................................44 Financial information disclosure................................................55
2.1 4.3 1.0
5th pillar: Non-banking financial services .............................57
1.1
IPO activity.....................................................................................47 M&A activity..................................................................................57 Insurance .......................................................................................54 Securitization.................................................................................56
1.2 1.0 1.3 1.0
6th pillar: Financial markets......................................................57
1.0
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................55 Bond market development ........................................................n/a
n/a n/a 1.0 n/a 1
Financial access 7th pillar: Financial access........................................................35
3.1
Commercial access......................................................................48 Retail access.................................................................................20
3.0 3.2 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................49 .....n ...............–1.1 Commitments to WTO agreement on trade in services.......49 .....n.................0.0 Domestic financial sector liberalization ................................n/a .........................n/a
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................57 .....n.................2.9 Efficacy of corporate boards .................................................55 .....n.................4.0 Reliance on professional management .................................48 .....n.................3.9 Willingness to delegate.........................................................57 .....n.................2.8 Strength of auditing and reporting standards .......................54 .....n.................3.8 Ethical behavior of firms........................................................53 .....n.................3.3 Protection of minority shareholders’ interests ......................53 .....n.................3.4
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................37 .....n.................2.9 Centralization of economic policymaking ..............................54 .....n .................1.9 Regulation of securities exchanges.......................................33 .....n.................4.4 Property rights.......................................................................52 .....n.................3.4 Intellectual property protection .............................................54 .....n.................2.6 Diversion of public funds.......................................................49 .....n.................2.6 Public trust of politicians .......................................................46 .....n.................2.0 Corruption perceptions index ................................................52 .....n.................2.4 Strength of legal rights index ................................................19 .....n .................7.0 Central bank transparency....................................................n/a .........................n/a
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................42 .....n.................3.0 Judicial independence ...........................................................47 .....n.................3.4 Irregular payments in judicial decisions.................................48 .....n.................3.2 Time to enforce a contract ....................................................57 .....n ...........1442.0 Number of procedures to enforce a contract .......................48 .....n ...............41.0 Strength of investor protection index....................................15 .....n.................6.7 Cost of enforcing contracts...................................................56 .....n...............63.3
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................46 .....n.................3.8 Quality of math and science education.................................45 .....n.................3.2 Extent of staff training...........................................................57 .....n.................3.1 Local availability of specialized research and training services .............................................................57 .....n.................3.0 Brain drain and ease of hiring foreign labor ..........................55 .....n.................3.1 Tertiary enrollment ................................................................56 .....n .................7.2
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................57 .....n.................2.3 Distortive effect of taxes and subsidies on competition.......27 .....n.................4.2 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes..................................................................37 .....n.............302.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................55 .....n.................2.7 Quality of telephone infrastructure .......................................53 .....n.................5.0 Internet users .......................................................................57 .....n.................0.4 Broadband Internet subscribers ............................................57 .....n.................0.0 Telephone lines......................................................................57 .....n.................0.8 Mobile telephone subscribers...............................................57 .....n ...............27.9
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................54 .....n...............36.2
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Bangladesh
79
2: Country/Economy Profiles
Bangladesh Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................53 .....n ...............10.2 Cost of closing a business ....................................................17 .....n.................8.0 Time to start a business........................................................51 .....n...............44.0 Time to register property ......................................................57 .....n.............245.0 Time to close a business ......................................................43 .....n.................4.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) ....................n/a .........................n/a External vulnerability indicator.................................................5 .....n...............22.7 Current account balance to GDP...........................................25 .....n.................2.0 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................12 .....n...............25.8 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................16 .....n .................1.0 Financial strengths indicator.................................................n/a .........................n/a Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio..................................................................44 .....n.................5.9 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................51 .....n.................8.0 Foreign currency sovereign rating .........................................50 .....n.................8.0 Aggregate macroprudential indicator ....................................28 .....n.................5.2 Manageability of public debt ................................................20 .....n ...............37.5 Credit default swap spreads.................................................n/a .........................n/a
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
80
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............52.9 Central bank assets to GDP ....................................................8 .....n.................6.1 Financial system deposits to GDP ........................................37 .....n...............50.5 M2 to GDP ............................................................................43 .....n...............50.4 Private credit to GDP.............................................................44 .....n...............35.9 Bank deposits to GDP ...........................................................38 .....n...............50.3 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................7 .....n.................5.2 Bank overhead costs .............................................................28 .....n.................2.4 Public ownership of banks ....................................................54 .....n...............58.7 Bank operating costs to assets .............................................38 .....n.................2.6 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................49 .....n.................0.0 Public credit registry coverage ..............................................22 .....n.................0.9
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................53 .....n.................0.0 IPO proceeds amount ...........................................................48 .....n.................0.1 Share of world IPOs ..............................................................22 .....n.................0.7
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 ................................................................57 .....n.................0.0 M&A transaction value to GDP .............................................57 .....n.................0.2 Share of total number of M&A deals ....................................57 .....n.................0.0
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................42 .....n.................0.7 Non–life insurance density ...................................................57 .....n.................0.2 Real growth of direct insurance premiums ..........................n/a .........................n/a Life insurance coverage.........................................................15 .....n .................1.1 Non–life insurance coverage .................................................32 .....n.................0.4 Relative value-added of insurance to GDP ............................52 .....n.................0.5
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................57 .....n.................0.0 Share of total number of securitization deals .......................56 .....n.................0.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Bangladesh
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 ..................................................n/a .........................n/a Stock market capitalization to GDP .......................................50 .....n................11.1 Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people...................45 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................54 .....n.................0.0 Public international bonds to GDP ........................................51 .....n.................0.0 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
81 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................56 .....n.................3.2 Venture capital availability......................................................49 .....n.................2.2 Ease of access to credit ........................................................11 .....n.................3.9 Financing through local equity market ....................................9 .....n.................4.6 Ease of access to loans ........................................................45 .....n.................2.6 Foreign direct investment to GDP.........................................46 .....n .................1.1 Retail access Market penetration of bank accounts ...................................36 .....n ........31,667.1 Commercial bank branches ...................................................46 .....n.................5.2 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .......................................................................1 .....n ...............41.2
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Belgium Key indicators
Financial assets by major type, 2008 9.0%
Population (millions), 2009 .......................................................10.8
US$ bn
24.5%
GDP (US$ billions), 2009 .........................................................470.4 GDP (current prices) per capita, 2009 ............................43,533.3
n n n n
25.9%
GDP (PPP) as share (%) of world total, 2009 ........................0.55 Compound annual growth rate of real GDP (%), 2005–09 ..0.67
Public debt securities .......455.5 Private debt securities......755.3 Banking deposits ...............482.9 Equity securities ................167.4 Total
1,861.2
40.6%
Total/GDP 367.6%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................10 4.6 1
2
3
4
5
6
7
Factors, policies, and institutions
82
1st pillar: Institutional environment .........................................13
5.6
Financial sector liberalization ......................................................1 Corporate governance.................................................................16 Legal and regulatory issues .......................................................14 Contract enforcement..................................................................13
7.0 5.1 4.8 5.5
2nd pillar: Business environment .............................................11
5.5
Human capital .................................................................................7 Taxes.................................................................................................8 Infrastructure ................................................................................12 Cost of doing business ................................................................29
5.5 5.8 5.7 5.2
3rd pillar: Financial stability......................................................19
4.8
Currency stability........................................................................n/a Banking system stability..............................................................29 Risk of sovereign debt crisis ......................................................25
n/a 4.5 5.3 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........................................9
4.9
Size index .......................................................................................14 Efficiency index...............................................................................3 Financial information disclosure................................................15
3.9 6.4 3.7
5th pillar: Non-banking financial services .............................23
2.5
IPO activity.....................................................................................26 M&A activity..................................................................................22 Insurance .......................................................................................24 Securitization.................................................................................22
2.0 2.7 2.8 2.6
6th pillar: Financial markets......................................................13
4.1
Foreign exchange markets .........................................................12 Derivatives markets .....................................................................11 Equity market development ........................................................25 Bond market development............................................................1
2.3 5.3 2.9 5.6 1
Financial access 7th pillar: Financial access..........................................................3
5.1
Commercial access........................................................................7 Retail access...................................................................................2
4.4 5.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n...............72.8 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................24 .....n.................4.4 Efficacy of corporate boards..................................................18 .....n.................5.0 Reliance on professional management .................................15 .....n.................5.5 Willingness to delegate .........................................................12 .....n.................4.8 Strength of auditing and reporting standards........................15 .....n.................5.6 Ethical behavior of firms........................................................17 .....n.................5.5 Protection of minority shareholders’ interests ......................18 .....n.................4.9
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................47 .....n.................2.6 Centralization of economic policymaking ................................2 .....n.................5.4 Regulation of securities exchanges.......................................25 .....n.................4.8 Property rights.......................................................................18 .....n.................5.4 Intellectual property protection .............................................19 .....n.................5.1 Diversion of public funds.......................................................21 .....n.................5.1 Public trust of politicians .......................................................26 .....n.................3.4 Corruption perceptions index ................................................17 .....n .................7.1 Strength of legal rights index ................................................19 .....n .................7.0 Central bank transparency.......................................................3 .....n................11.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................35 .....n.................3.3 Judicial independence ...........................................................18 .....n.................5.2 Irregular payments in judicial decisions.................................17 .....n.................5.9 Time to enforce a contract ....................................................27 .....n.............505.0 Number of procedures to enforce a contract .........................4 .....n...............25.0 Strength of investor protection index....................................12 .....n .................7.0 Cost of enforcing contracts ...................................................14 .....n ...............16.6
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................3 .....n.................6.0 Quality of math and science education...................................2 .....n.................6.2 Extent of staff training...........................................................14 .....n.................4.9 Local availability of specialized research and training services ...............................................................9 .....n.................5.8 Brain drain and ease of hiring foreign labor...........................17 .....n.................4.6 Tertiary enrollment.................................................................16 .....n...............62.5
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................22 .....n.................5.8 Distortive effect of taxes and subsidies on competition.......25 .....n.................4.4 Marginal tax variation ..............................................................6 .....n .............–16.2 Time to pay taxes ..................................................................18 .....n .............156.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................15 .....n.................5.8 Quality of telephone infrastructure .......................................24 .....n.................6.5 Internet users .......................................................................16 .....n...............68.9 Broadband Internet subscribers ............................................12 .....n...............28.0 Telephone lines......................................................................16 .....n...............42.1 Mobile telephone subscribers...............................................26 .....n ..............111.6
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................24 .....n.................5.3
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Belgium
83
2: Country/Economy Profiles
Belgium Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................56 .....n ...............12.7 Cost of closing a business ......................................................5 .....n.................4.0 Time to start a business..........................................................3 .....n.................4.0 Time to register property ......................................................50 .....n...............79.0 Time to close a business ........................................................5 .....n.................0.9
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................16 .....n.................2.5 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................30 .....n ...............–0.2 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................35 .....n.................2.0 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles ...........................12 .....n.................5.9 Financial Stress Index ...........................................................35 .....n ...............10.7 Tier 1 capital ratio ..................................................................13 .....n................11.8 Output loss during banking crises.........................................35 .....n...............46.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................15 .....n ...............19.0 Foreign currency sovereign rating .........................................15 .....n ...............19.0 Aggregate macroprudential indicator ....................................21 .....n.................5.4 Manageability of public debt ................................................54 .....n...............96.7 Credit default swap spreads .................................................26 .....n .............129.3
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
84
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n ..............111.1 Central bank assets to GDP ..................................................31 .....n.................0.7 Financial system deposits to GDP ........................................13 .....n ...............97.0 M2 to GDP ............................................................................15 .....n .............114.1 Private credit to GDP.............................................................21 .....n...............93.7 Bank deposits to GDP ...........................................................14 .....n ...............97.0 Money market instruments to GDP ........................................5 .....n.................6.7
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................2 .....n.................6.3 Bank overhead costs .............................................................41 .....n.................3.7 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets ...............................................5 .....n.................0.9 Non-performing bank loans to total loans .............................14 .....n.................2.7
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................49 .....n.................0.0 Public credit registry coverage ................................................2 .....n...............56.5
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................23 .....n.................0.9 IPO proceeds amount ...........................................................24 .....n.................0.3 Share of world IPOs ..............................................................21 .....n .................1.0
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n .................1.0 M&A transaction value to GDP .............................................19 .....n .................7.0 Share of total number of M&A deals ....................................27 .....n.................0.6
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................12 .....n.................5.4 Non–life insurance density ...................................................13 .....n.................3.2 Real growth of direct insurance premiums ...........................38 .....n.................0.0 Life insurance coverage ........................................................26 .....n.................0.6 Non–life insurance coverage .................................................34 .....n.................0.3 Relative value-added of insurance to GDP ............................37 .....n.................0.9
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................17 .....n.................2.3 Share of total number of securitization deals .......................29 .....n.................0.2
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Belgium
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover.............................................13 .....n .................1.1 Outright forward foreign exchange turnover .........................11 .....n .................1.7 Foreign exchange swap turnover...........................................13 .....n .................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 .....n.................0.5 Interest rate derivatives turnover: Swaps..............................12 .....n .................1.0 Interest rate derivatives turnover: Options..............................5 .....n .................1.5 Foreign exchange derivatives turnover: Currency swaps ......15 .....n.................0.9 Foreign exchange derivatives turnover: Options ...................14 .....n.................0.6
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................17 .....n .............108.8 Stock market capitalization to GDP .......................................29 .....n...............88.2 Stock market value traded to GDP........................................23 .....n...............78.2 Number of listed companies per 10,000 people ..................n/a .........................n/a
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ..............9 .....n...............58.2 Public domestic bond market capitalization to GDP ...............3 .....n ...............61.7 Private international bonds to GDP .........................................6 .....n...............84.8 Public international bonds to GDP ..........................................2 .....n...............29.4 Local currency corporate bond issuance to GDP ..................17 .....n .................1.5
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
85 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication..............................................17 .....n.................5.9 Venture capital availability......................................................18 .....n.................3.3 Ease of access to credit........................................................45 .....n.................2.5 Financing through local equity market ..................................44 .....n.................3.6 Ease of access to loans.........................................................13 .....n.................3.9 Foreign direct investment to GDP...........................................4 .....n ...............12.7 Retail access Market penetration of bank accounts .....................................2 .....n......396,895.4 Commercial bank branches .....................................................3 .....n...............48.5 Total number of ATMs.............................................................5 .....n .............138.3 Total number of point of sale (POS) devices .........................15 .....n ..........1,193.4 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Brazil Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .....................................................191.5
20.1%
US$ bn
GDP (US$ billions), 2009 ......................................................1,574.0
32.6%
GDP (current prices) per capita, 2009 ..............................8,220.4 GDP (PPP) as share (%) of world total, 2009 ........................2.87 Compound annual growth rate of real GDP (%), 2005–09 ..2.97
n n n n
29.6%
Public debt securities .......958.4 Private debt securities......520.2 Banking deposits ...............870.8 Equity securities ................589.4 Total
2,938.8
17.7%
Total/GDP 179.7%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................32 3.5 1
2
3
4
5
6
7
Factors, policies, and institutions
86
1st pillar: Institutional environment .........................................44
3.6
Financial sector liberalization ....................................................44 Corporate governance.................................................................35 Legal and regulatory issues .......................................................45 Contract enforcement..................................................................45
3.3 4.3 3.1 3.7
2nd pillar: Business environment .............................................49
3.8
Human capital ...............................................................................43 Taxes...............................................................................................52 Infrastructure ................................................................................40 Cost of doing business ................................................................46
3.7 3.6 3.6 4.3
3rd pillar: Financial stability......................................................10
5.1
Currency stability............................................................................2 Banking system stability..............................................................16 Risk of sovereign debt crisis ......................................................42
6.1 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......................................38
3.2
Size index .......................................................................................28 Efficiency index.............................................................................53 Financial information disclosure................................................12
2.8 3.2 3.9
5th pillar: Non-banking financial services .............................12
3.6
IPO activity.......................................................................................2 M&A activity..................................................................................23 Insurance .......................................................................................16 Securitization.................................................................................25
5.6 2.7 3.4 2.5
6th pillar: Financial markets......................................................34
1.9
Foreign exchange markets .........................................................32 Derivatives markets .....................................................................26 Equity market development ........................................................31 Bond market development..........................................................24
1.1 1.7 2.2 2.4 1
Financial access 7th pillar: Financial access........................................................27
3.4
Commercial access......................................................................25 Retail access.................................................................................19
3.6 3.2 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................40 .....n.................0.7 Commitments to WTO agreement on trade in services.......49 .....n .................7.6 Domestic financial sector liberalization .................................30 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................27 .....n.................4.3 Efficacy of corporate boards .................................................33 .....n.................4.5 Reliance on professional management .................................31 .....n.................4.7 Willingness to delegate.........................................................31 .....n.................3.9 Strength of auditing and reporting standards .......................37 .....n.................4.8 Ethical behavior of firms........................................................47 .....n.................3.5 Protection of minority shareholders’ interests ......................35 .....n.................4.4
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................57 .....n .................1.9 Centralization of economic policymaking ..............................43 .....n.................2.7 Regulation of securities exchanges.........................................5 .....n.................5.7 Property rights.......................................................................39 .....n.................4.3 Intellectual property protection .............................................45 .....n.................3.1 Diversion of public funds.......................................................52 .....n.................2.3 Public trust of politicians .......................................................52 .....n .................1.8 Corruption perceptions index ................................................37 .....n.................3.7 Strength of legal rights index ................................................50 .....n.................3.0 Central bank transparency.....................................................23 .....n.................9.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................52 .....n.................2.4 Judicial independence ...........................................................40 .....n.................3.5 Irregular payments in judicial decisions.................................39 .....n.................3.8 Time to enforce a contract ....................................................44 .....n .............616.0 Number of procedures to enforce a contract .......................52 .....n...............45.0 Strength of investor protection index....................................35 .....n.................5.3 Cost of enforcing contracts ...................................................12 .....n ...............16.5
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................43 .....n.................4.1 Quality of math and science education.................................53 .....n.................2.7 Extent of staff training...........................................................32 .....n.................4.2 Local availability of specialized research and training services .............................................................27 .....n.................4.7 Brain drain and ease of hiring foreign labor ..........................33 .....n.................3.9 Tertiary enrollment ................................................................43 .....n...............30.0
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................39 .....n.................4.2 Distortive effect of taxes and subsidies on competition.......41 .....n.................3.9 Marginal tax variation ............................................................14 .....n................–7.3 Time to pay taxes..................................................................57 .....n...........2600.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................43 .....n.................3.8 Quality of telephone infrastructure .......................................22 .....n.................6.5 Internet users .......................................................................31 .....n ...............37.5 Broadband Internet subscribers ............................................37 .....n.................5.3 Telephone lines......................................................................37 .....n ...............21.4 Mobile telephone subscribers...............................................45 .....n...............78.5
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................31 .....n.................6.9
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Brazil
87
2: Country/Economy Profiles
Brazil Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................24 .....n.................2.7 Cost of closing a business ....................................................29 .....n ...............12.0 Time to start a business........................................................56 .....n .............120.0 Time to register property ......................................................35 .....n...............42.0 Time to close a business ......................................................43 .....n.................4.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .......................3 .....n.................9.9 External vulnerability indicator.................................................6 .....n...............22.8 Current account balance to GDP...........................................34 .....n ...............–1.1 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) .......................2 .....n ...............15.4 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................46 .....n.................2.3 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles.............................9 .....n.................6.3 Financial Stress Index............................................................10 .....n .................1.4 Tier 1 capital ratio....................................................................9 .....n ...............12.4 Output loss during banking crises.........................................40 .....n...............62.3
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................35 .....n ...............13.0 Foreign currency sovereign rating .........................................36 .....n................11.0 Aggregate macroprudential indicator ....................................36 .....n.................4.8 Manageability of public debt ................................................44 .....n...............62.8 Credit default swap spreads .................................................31 .....n .............136.5
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
88
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............83.2 Central bank assets to GDP ....................................................2 .....n ...............13.3 Financial system deposits to GDP ........................................29 .....n...............60.0 M2 to GDP ............................................................................51 .....n ...............37.1 Private credit to GDP.............................................................34 .....n...............54.5 Bank deposits to GDP ...........................................................33 .....n...............60.7 Money market instruments to GDP ......................................20 .....n.................0.1
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................37 .....n.................3.9 Bank overhead costs .............................................................55 .....n ...............10.4 Public ownership of banks ....................................................49 .....n...............38.1 Bank operating costs to assets .............................................50 .....n.................4.0 Non-performing bank loans to total loans .............................22 .....n.................4.5
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................21 .....n...............59.2 Public credit registry coverage ................................................8 .....n...............23.7
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................3 .....n ...............10.5 IPO proceeds amount .............................................................2 .....n .................1.1 Share of world IPOs ..............................................................10 .....n.................2.5
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n .................1.8 M&A transaction value to GDP .............................................30 .....n.................4.0 Share of total number of M&A deals ....................................20 .....n .................1.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................31 .....n .................1.6 Non–life insurance density ...................................................39 .....n .................1.5 Real growth of direct insurance premiums ...........................13 .....n.................0.1 Life insurance coverage.........................................................10 .....n.................3.0 Non–life insurance coverage ...................................................6 .....n.................2.9 Relative value-added of insurance to GDP ............................14 .....n .................1.8
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................41 .....n.................0.8 Share of total number of securitization deals........................13 .....n .................1.2
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Brazil
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................21 .....n.................0.4 Outright forward foreign exchange turnover .........................35 .....n.................0.1 Foreign exchange swap turnover ..........................................42 .....n.................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 .....n.................0.0 Interest rate derivatives turnover: Options............................31 .....n.................0.0 Foreign exchange derivatives turnover: Currency swaps ......16 .....n.................0.7 Foreign exchange derivatives turnover: Options ...................34 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................32 .....n...............50.3 Stock market capitalization to GDP .......................................21 .....n .............113.4 Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people...................41 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............18 .....n...............24.4 Public domestic bond market capitalization to GDP .............12 .....n...............44.5 Private international bonds to GDP .......................................34 .....n.................5.1 Public international bonds to GDP ........................................27 .....n.................3.3 Local currency corporate bond issuance to GDP ..................34 .....n.................0.2
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
89 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................13 .....n.................6.0 Venture capital availability......................................................39 .....n.................2.6 Ease of access to credit ........................................................10 .....n.................3.9 Financing through local equity market ..................................31 .....n.................3.9 Ease of access to loans ........................................................39 .....n.................2.8 Foreign direct investment to GDP.........................................39 .....n.................2.9 Retail access Market penetration of bank accounts ...................................21 .....n ......106,535.4 Commercial bank branches ...................................................32 .....n ...............12.7 Total number of ATMs.............................................................9 .....n .............112.1 Total number of point of sale (POS) devices .........................11 .....n ..........2,247.4 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................18 .....n .................1.6
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Canada Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .......................................................33.7
22.5%
US$ bn
21.9%
GDP (US$ billions), 2009 ......................................................1,336.4 GDP (current prices) per capita, 2009 ............................39,668.6 GDP (PPP) as share (%) of world total, 2009 ........................1.85 Compound annual growth rate of real GDP (%), 2005–09 ..0.61
19.4%
n n n n
Public debt securities .......975.2 Private debt securities......863.6 Banking deposits ............1,609.6 Equity securities .............1,002.2 Total
4,450.6
36.2%
Total/GDP 296.8%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index........................................................6 5.0 1
2
3
4
5
6
7
Factors, policies, and institutions
90
1st pillar: Institutional environment ...........................................5
5.9
Financial sector liberalization ......................................................1 Corporate governance...................................................................3 Legal and regulatory issues .........................................................8 Contract enforcement..................................................................11
7.0 5.7 5.2 5.6
2nd pillar: Business environment ...............................................7
5.7
Human capital .................................................................................8 Taxes...............................................................................................19 Infrastructure ................................................................................11 Cost of doing business ..................................................................3
5.4 5.2 5.7 6.6
3rd pillar: Financial stability......................................................13
5.0
Currency stability..........................................................................37 Banking system stability................................................................8 Risk of sovereign debt crisis ......................................................12
3.5 5.6 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......................................11
4.8
Size index .......................................................................................12 Efficiency index.............................................................................11 Financial information disclosure..................................................3
3.9 6.0 4.0
5th pillar: Non-banking financial services ...............................3
4.5
IPO activity.......................................................................................8 M&A activity....................................................................................3 Insurance .......................................................................................18 Securitization...................................................................................5
3.7 5.8 3.3 5.1
6th pillar: Financial markets......................................................12
4.3
Foreign exchange markets .........................................................11 Derivatives markets .......................................................................6 Equity market development ........................................................11 Bond market development..........................................................12
2.3 6.5 4.6 3.8 1
Financial access 7th pillar: Financial access..........................................................6
4.7
Commercial access......................................................................13 Retail access...................................................................................6
4.0 5.4 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n...............63.3 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ................................1 .....n.................5.2 Efficacy of corporate boards ...................................................3 .....n.................5.7 Reliance on professional management ...................................4 .....n.................6.1 Willingness to delegate...........................................................7 .....n.................5.1 Strength of auditing and reporting standards .........................5 .....n.................6.1 Ethical behavior of firms..........................................................7 .....n.................6.3 Protection of minority shareholders’ interests ........................6 .....n.................5.4
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................15 .....n.................3.6 Centralization of economic policymaking ................................5 .....n.................4.6 Regulation of securities exchanges .......................................16 .....n.................5.2 Property rights.........................................................................9 .....n.................6.1 Intellectual property protection..............................................10 .....n.................5.6 Diversion of public funds.......................................................12 .....n.................5.7 Public trust of politicians .......................................................13 .....n.................4.2 Corruption perceptions index ..................................................7 .....n.................8.7 Strength of legal rights index ................................................30 .....n.................6.0 Central bank transparency.......................................................3 .....n................11.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ........................................7 .....n.................5.1 Judicial independence .............................................................9 .....n.................6.2 Irregular payments in judicial decisions...................................8 .....n.................6.5 Time to enforce a contract ....................................................37 .....n.............570.0 Number of procedures to enforce a contract .......................34 .....n...............36.0 Strength of investor protection index......................................4 .....n.................8.3 Cost of enforcing contracts...................................................23 .....n...............22.3
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................2 .....n.................6.0 Quality of math and science education...................................5 .....n.................5.4 Extent of staff training ...........................................................11 .....n.................5.0 Local availability of specialized research and training services..............................................................11 .....n.................5.7 Brain drain and ease of hiring foreign labor...........................15 .....n.................4.6 Tertiary enrollment.................................................................17 .....n...............62.4
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................9 .....n.................6.4 Distortive effect of taxes and subsidies on competition.......23 .....n.................4.4 Marginal tax variation ............................................................27 .....n .................7.0 Time to pay taxes ..................................................................13 .....n .............119.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................12 .....n.................6.0 Quality of telephone infrastructure........................................13 .....n.................6.7 Internet users .........................................................................9 .....n...............75.4 Broadband Internet subscribers ..............................................8 .....n...............29.6 Telephone lines........................................................................6 .....n...............54.9 Mobile telephone subscribers...............................................50 .....n...............66.4
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business .....................................................3 .....n.................0.4
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Canada
91
2: Country/Economy Profiles
Canada Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................16 .....n .................1.8 Cost of closing a business ......................................................5 .....n.................4.0 Time to start a business..........................................................5 .....n.................5.0 Time to register property ......................................................17 .....n................17.0 Time to close a business ........................................................3 .....n.................0.8
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................46 .....n ...............–1.7 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................31 .....n ...............–0.4 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................7 .....n................–7.8
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises....................................................1 .....n.................0.0 Financial strengths indicator....................................................1 .....n.................9.0 Aggregate measure of real estate bubbles...........................27 .....n.................4.9 Financial Stress Index ...........................................................33 .....n ...............10.1 Tier 1 capital ratio ..................................................................12 .....n................11.9 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator.....................................18 .....n.................5.4 Manageability of public debt ................................................53 .....n...............82.4 Credit default swap spreads ...................................................7 .....n...............43.0
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
92
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............140.7 Central bank assets to GDP ..................................................14 .....n.................3.1 Financial system deposits to GDP ..........................................8 .....n .............114.8 M2 to GDP ............................................................................25 .....n...............85.5 Private credit to GDP...............................................................9 .....n .............134.0 Bank deposits to GDP .............................................................8 .....n .............116.5 Money market instruments to GDP ......................................19 .....n.................0.1
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................30 .....n.................4.3 Bank overhead costs .............................................................25 .....n.................2.1 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................28 .....n .................1.9 Non-performing bank loans to total loans ...............................3 .....n .................1.2
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....n .............100.0 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share...................................................................11 .....n .................1.5 IPO proceeds amount ...........................................................34 .....n.................0.2 Share of world IPOs ................................................................3 .....n ...............10.1
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................4.1 M&A transaction value to GDP ...............................................8 .....n ...............10.0 Share of total number of M&A deals ......................................5 .....n.................4.5
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................19 .....n.................3.3 Non–life insurance density .....................................................6 .....n.................4.1 Real growth of direct insurance premiums ...........................25 .....n.................0.0 Life insurance coverage.........................................................16 .....n .................1.1 Non–life insurance coverage .................................................14 .....n .................1.4 Relative value-added of insurance to GDP ............................25 .....n .................1.1
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP.............................................................11 .....n.................2.8 Share of total number of securitization deals .........................6 .....n.................2.5
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Canada
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover.............................................15 .....n .................1.1 Outright forward foreign exchange turnover .........................15 .....n .................1.0 Foreign exchange swap turnover ...........................................11 .....n .................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 .....n .................1.8 Interest rate derivatives turnover: Swaps..............................14 .....n.................0.7 Interest rate derivatives turnover: Options..............................6 .....n .................1.3 Foreign exchange derivatives turnover: Currency swaps ........4 .....n.................4.2 Foreign exchange derivatives turnover: Options....................10 .....n .................1.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................25 .....n ...............74.6 Stock market capitalization to GDP .........................................6 .....n .............174.4 Stock market value traded to GDP ........................................15 .....n .............153.3 Number of listed companies per 10,000 people.....................2 .....n .................1.2
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............17 .....n...............28.5 Public domestic bond market capitalization to GDP ...............5 .....n...............59.7 Private international bonds to GDP .......................................18 .....n...............32.4 Public international bonds to GDP.........................................18 .....n.................6.8 Local currency corporate bond issuance to GDP ..................14 .....n .................1.8
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
93 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication ...............................................3 .....n.................6.5 Venture capital availability......................................................15 .....n.................3.7 Ease of access to credit........................................................38 .....n.................2.7 Financing through local equity market ....................................6 .....n.................4.7 Ease of access to loans.........................................................17 .....n.................3.6 Foreign direct investment to GDP.........................................35 .....n.................3.3 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................16 .....n...............24.1 Total number of ATMs.............................................................1 .....n.............218.5 Total number of point of sale (POS) devices...........................6 .....n..........2,556.0 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Chile Key indicators
Financial assets by major type, 2008 3.3%
Population (millions), 2009 .......................................................17.0
US$ bn
16.6%
GDP (US$ billions), 2009 .........................................................161.8 GDP (current prices) per capita, 2009 ..............................9,525.4 GDP (PPP) as share (%) of world total, 2009 ........................0.35
49.0%
Compound annual growth rate of real GDP (%), 2005–09 ..2.24
31.1%
n n n n
Public debt securities ...........8.8 Private debt securities........44.8 Banking deposits .................84.1 Equity securities ................132.4 Total
270.1
Total/GDP 158.2%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................30 3.5 1
2
3
4
5
6
7
Factors, policies, and institutions
94
1st pillar: Institutional environment .........................................27
4.5
Financial sector liberalization ....................................................33 Corporate governance.................................................................21 Legal and regulatory issues .......................................................27 Contract enforcement..................................................................24
4.2 4.9 3.9 4.7
2nd pillar: Business environment .............................................31
4.5
Human capital ...............................................................................26 Taxes...............................................................................................27 Infrastructure ................................................................................31 Cost of doing business ................................................................35
4.4 4.8 4.0 4.9
3rd pillar: Financial stability........................................................7
5.4
Currency stability..........................................................................23 Banking system stability................................................................2 Risk of sovereign debt crisis ......................................................16
4.3 5.9 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......................................37
3.2
Size index .......................................................................................35 Efficiency index.............................................................................47 Financial information disclosure................................................17
2.2 4.1 3.6
5th pillar: Non-banking financial services .............................43
1.9
IPO activity.....................................................................................50 M&A activity..................................................................................30 Insurance .......................................................................................26 Securitization.................................................................................42
1.1 1.9 2.7 1.7
6th pillar: Financial markets......................................................44
1.7
Foreign exchange markets .........................................................28 Derivatives markets .....................................................................35 Equity market development ........................................................32 Bond market development..........................................................31
1.1 1.0 2.2 2.0 1
Financial access 7th pillar: Financial access........................................................23
3.6
Commercial access........................................................................8 Retail access.................................................................................30
4.4 2.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................29 .....n.................2.2 Commitments to WTO agreement on trade in services.......49 .....n.................8.7 Domestic financial sector liberalization .................................27 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................15 .....n.................4.6 Efficacy of corporate boards..................................................14 .....n.................5.1 Reliance on professional management .................................20 .....n.................5.1 Willingness to delegate.........................................................41 .....n.................3.6 Strength of auditing and reporting standards........................16 .....n.................5.6 Ethical behavior of firms........................................................16 .....n.................5.6 Protection of minority shareholders’ interests ......................21 .....n.................4.8
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation..........................................17 .....n.................3.6 Centralization of economic policymaking ..............................47 .....n.................2.5 Regulation of securities exchanges.......................................50 .....n.................3.7 Property rights.......................................................................22 .....n.................5.2 Intellectual property protection .............................................35 .....n.................3.7 Diversion of public funds.......................................................23 .....n.................4.6 Public trust of politicians .......................................................19 .....n.................3.8 Corruption perceptions index ................................................19 .....n.................6.7 Strength of legal rights index ................................................40 .....n.................4.0 Central bank transparency.....................................................29 .....n .................7.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................26 .....n.................4.0 Judicial independence ...........................................................17 .....n.................5.4 Irregular payments in judicial decisions.................................21 .....n.................5.5 Time to enforce a contract ....................................................26 .....n.............480.0 Number of procedures to enforce a contract .......................34 .....n...............36.0 Strength of investor protection index....................................21 .....n.................6.0 Cost of enforcing contracts...................................................40 .....n...............28.6
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools............................................12 .....n.................5.3 Quality of math and science education.................................51 .....n.................2.8 Extent of staff training...........................................................24 .....n.................4.4 Local availability of specialized research and training services .............................................................25 .....n.................4.9 Brain drain and ease of hiring foreign labor ............................9 .....n.................4.9 Tertiary enrollment ................................................................29 .....n...............49.8
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection.......................................17 .....n.................6.1 Distortive effect of taxes and subsidies on competition.........5 .....n.................5.4 Marginal tax variation ............................................................34 .....n ...............13.2 Time to pay taxes..................................................................38 .....n .............316.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................18 .....n.................5.7 Quality of telephone infrastructure........................................10 .....n.................6.8 Internet users .......................................................................35 .....n...............32.5 Broadband Internet subscribers ............................................30 .....n.................8.5 Telephone lines......................................................................38 .....n ...............21.0 Mobile telephone subscribers...............................................40 .....n...............88.1
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................31 .....n.................6.9
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Chile
95
2: Country/Economy Profiles
Chile Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................14 .....n .................1.3 Cost of closing a business ....................................................31 .....n ...............15.0 Time to start a business........................................................38 .....n ...............27.0 Time to register property ......................................................27 .....n ...............31.0 Time to close a business ......................................................51 .....n.................4.5
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .......................9 .....n.................4.8 External vulnerability indicator...............................................28 .....n .............115.2 Current account balance to GDP...........................................27 .....n .................1.7 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................24 .....n...............45.3 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................20 .....n .................1.3 Financial strengths indicator....................................................6 .....n .................7.0 Aggregate measure of real estate bubbles.............................5 .....n.................6.6 Financial Stress Index............................................................13 .....n.................2.8 Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises.........................................27 .....n ...............16.4
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................17 .....n...............18.0 Foreign currency sovereign rating .........................................22 .....n ...............16.0 Aggregate macroprudential indicator ....................................43 .....n.................4.5 Manageability of public debt ..................................................1 .....n.................6.1 Credit default swap spreads .................................................22 .....n .............102.3
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
96
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n ...............71.9 Central bank assets to GDP ..................................................22 .....n .................1.6 Financial system deposits to GDP ........................................33 .....n ...............51.7 M2 to GDP ............................................................................38 .....n...............56.5 Private credit to GDP.............................................................26 .....n...............86.5 Bank deposits to GDP ...........................................................36 .....n...............52.1 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................55 .....n.................2.3 Bank overhead costs .............................................................36 .....n.................3.1 Public ownership of banks ....................................................40 .....n...............18.5 Bank operating costs to assets .............................................36 .....n.................2.5 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................29 .....n...............33.9 Public credit registry coverage ................................................6 .....n...............32.9
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................48 .....n.................0.1 IPO proceeds amount ...........................................................46 .....n.................0.1 Share of world IPOs ..............................................................44 .....n.................0.2
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.2 M&A transaction value to GDP .............................................22 .....n.................5.1 Share of total number of M&A deals ....................................37 .....n.................0.3
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................25 .....n.................2.5 Non–life insurance density ...................................................34 .....n .................1.7 Real growth of direct insurance premiums ...........................11 .....n.................0.1 Life insurance coverage ........................................................29 .....n.................0.4 Non–life insurance coverage .................................................37 .....n.................0.3 Relative value-added of insurance to GDP ............................19 .....n .................1.6
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................40 .....n.................0.8 Share of total number of securitization deals .......................28 .....n.................0.3
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Chile
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................31 .....n.................0.2 Outright forward foreign exchange turnover .........................21 .....n.................0.4 Foreign exchange swap turnover ..........................................40 .....n.................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 .....n.................0.0 Interest rate derivatives turnover: Swaps..............................35 .....n.................0.0 Interest rate derivatives turnover: Options...........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ......31 .....n.................0.1 Foreign exchange derivatives turnover: Options ...................41 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................41 .....n ...............27.2 Stock market capitalization to GDP .......................................15 .....n .............132.5 Stock market value traded to GDP........................................31 .....n ...............37.0 Number of listed companies per 10,000 people...................20 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............22 .....n ...............19.0 Public domestic bond market capitalization to GDP .............40 .....n.................9.9 Private international bonds to GDP .......................................33 .....n.................5.5 Public international bonds to GDP ........................................39 .....n .................1.3 Local currency corporate bond issuance to GDP ..................13 .....n .................1.9
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
97 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................18 .....n.................5.9 Venture capital availability......................................................24 .....n.................3.2 Ease of access to credit........................................................27 .....n.................3.2 Financing through local equity market ..................................13 .....n.................4.4 Ease of access to loans.........................................................16 .....n.................3.7 Foreign direct investment to GDP...........................................7 .....n ...............10.4 Retail access Market penetration of bank accounts ...................................31 .....n........72,975.5 Commercial bank branches ...................................................28 .....n ...............14.9 Total number of ATMs...........................................................20 .....n...............58.7 Total number of point of sale (POS) devices.........................25 .....n.............486.1 Microfinance institution (MFI) borrowers’ penetration rate .......................................................................7 .....n ...............15.3
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
China Key indicators
Financial assets by major type, 2008 6.3%
Population (millions), 2009 ..................................................1,334.7
US$ bn
10.3%
25.0%
GDP (US$ billions), 2009 ......................................................4,909.0
n n n n
GDP (current prices) per capita, 2009 ..............................3,677.9 GDP (PPP) as share (%) of world total, 2009 ......................12.52 Compound annual growth rate of real GDP (%), 2005–09 ..8.48
Public debt securities .......705.1 Private debt securities...1,148.3 Banking deposits ............6,543.9 Equity securities .............2,793.6 Total
11,191.0
58.5%
Total/GDP 247.6%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................22 4.0 1
2
3
4
5
6
7
Factors, policies, and institutions
98
1st pillar: Institutional environment .........................................35
4.1
Financial sector liberalization ....................................................43 Corporate governance.................................................................30 Legal and regulatory issues .......................................................28 Contract enforcement..................................................................23
3.3 4.4 3.9 4.8
2nd pillar: Business environment .............................................38
4.3
Human capital ...............................................................................36 Taxes...............................................................................................24 Infrastructure ................................................................................47 Cost of doing business ................................................................34
4.0 4.9 3.2 5.0
3rd pillar: Financial stability......................................................17
4.9
Currency stability............................................................................4 Banking system stability..............................................................50 Risk of sovereign debt crisis ........................................................7
5.7 3.5 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........................................8
4.9
Size index .....................................................................................n/a Efficiency index.............................................................................25 Financial information disclosure..................................................3
n/a 5.4 4.0
5th pillar: Non-banking financial services ...............................4
4.5
IPO activity.......................................................................................1 M&A activity....................................................................................6 Insurance .........................................................................................5 Securitization.................................................................................45
6.8 5.3 4.4 1.3
6th pillar: Financial markets......................................................30
2.1
Foreign exchange markets .........................................................27 Derivatives markets....................................................................n/a Equity market development.......................................................n/a Bond market development..........................................................21
1.2 n/a n/a 2.8 1
Financial access 7th pillar: Financial access........................................................26
3.4
Commercial access......................................................................34 Retail access ...............................................................................n/a
3.4 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................49 .....n ...............–1.1 Commitments to WTO agreement on trade in services.......22 .....n...............55.0 Domestic financial sector liberalization .................................40 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................16 .....n.................4.5 Efficacy of corporate boards .................................................42 .....n.................4.4 Reliance on professional management .................................30 .....n.................4.7 Willingness to delegate.........................................................42 .....n.................3.6 Strength of auditing and reporting standards .......................36 .....n.................4.8 Ethical behavior of firms........................................................30 .....n.................4.2 Protection of minority shareholders’ interests ......................36 .....n.................4.4
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation..........................................10 .....n.................4.0 Centralization of economic policymaking ..............................15 .....n.................3.9 Regulation of securities exchanges.......................................34 .....n.................4.4 Property rights.......................................................................23 .....n.................5.1 Intellectual property protection .............................................30 .....n.................4.0 Diversion of public funds.......................................................28 .....n.................3.8 Public trust of politicians .......................................................12 .....n.................4.3 Corruption perceptions index ................................................40 .....n.................3.6 Strength of legal rights index ................................................30 .....n.................6.0 Central bank transparency.....................................................39 .....n.................4.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................18 .....n.................4.4 Judicial independence ...........................................................34 .....n.................4.0 Irregular payments in judicial decisions.................................38 .....n.................4.0 Time to enforce a contract ....................................................19 .....n.............406.0 Number of procedures to enforce a contract .......................26 .....n...............34.0 Strength of investor protection index....................................39 .....n.................5.0 Cost of enforcing contracts.....................................................4 .....n................11.1
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................40 .....n.................4.2 Quality of math and science education.................................18 .....n.................4.7 Extent of staff training...........................................................33 .....n.................4.1 Local availability of specialized research and training services .............................................................35 .....n.................4.4 Brain drain and ease of hiring foreign labor...........................16 .....n.................4.6 Tertiary enrollment ................................................................47 .....n...............22.9
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................41 .....n.................4.1 Distortive effect of taxes and subsidies on competition .......15 .....n.................4.6 Marginal tax variation ..............................................................1 .....n .............–24.6 Time to pay taxes..................................................................49 .....n.............504.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................39 .....n.................4.1 Quality of telephone infrastructure .......................................36 .....n.................6.1 Internet users .......................................................................46 .....n...............22.3 Broadband Internet subscribers ............................................35 .....n.................6.2 Telephone lines......................................................................30 .....n...............25.5 Mobile telephone subscribers...............................................54 .....n...............48.0
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................22 .....n.................4.9
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
China
99
2: Country/Economy Profiles
China Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................29 .....n.................3.1 Cost of closing a business ....................................................47 .....n...............22.0 Time to start a business........................................................49 .....n ...............37.0 Time to register property ......................................................26 .....n...............29.0 Time to close a business ......................................................20 .....n .................1.7
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................13 .....n.................3.2 External vulnerability indicator.................................................2 .....n ...............12.4 Current account balance to GDP.............................................9 .....n.................8.7 Dollarization vulnerability indicator .......................................n/a ...n/a External debt to GDP (developing economies) .......................1 .....n.................9.4 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................27 .....n .................1.5 Financial strengths indicator..................................................48 .....n.................2.0 Aggregate measure of real estate bubbles...........................44 .....n .................1.0 Financial Stress Index .............................................................3 .....n.................0.1 Tier 1 capital ratio..................................................................42 .....n.................6.6 Output loss during banking crises.........................................28 .....n...............29.1
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................24 .....n ...............16.0 Foreign currency sovereign rating .........................................22 .....n ...............16.0 Aggregate macroprudential indicator ......................................3 .....n.................5.9 Manageability of public debt ..................................................6 .....n ...............16.9 Credit default swap spreads..................................................17 .....n...............90.0
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
100
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n.............182.0 Private credit to GDP ............................................................n/a .........................n/a Bank deposits to GDP .............................................................4 .....n .............144.8 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................25 .....n.................4.5 Bank overhead costs ...............................................................3 .....n .................1.0 Public ownership of banks ....................................................51 .....n...............52.2 Bank operating costs to assets ...............................................2 .....n.................0.7 Non-performing bank loans to total loans ...............................7 .....n .................1.6
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................49 .....n.................0.0 Public credit registry coverage ................................................1 .....n...............62.1
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................1 .....n...............22.0 IPO proceeds amount .............................................................4 .....n.................0.8 Share of world IPOs ................................................................1 .....n ...............12.6
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................3.9 M&A transaction value to GDP .............................................36 .....n.................3.2 Share of total number of M&A deals ......................................3 .....n.................8.6
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................28 .....n.................2.2 Non–life insurance density ...................................................44 .....n .................1.1 Real growth of direct insurance premiums .............................1 .....n.................0.3 Life insurance coverage ..........................................................2 .....n...............29.7 Non–life insurance coverage ...................................................1 .....n ...............14.6 Relative value-added of insurance to GDP ............................48 .....n.................0.5
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................55 .....n.................0.1 Share of total number of securitization deals .......................23 .....n.................0.4
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
China
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover.............................................17 .....n.................0.7 Outright forward foreign exchange turnover .........................41 .....n.................0.0 Foreign exchange swap turnover ..........................................37 .....n.................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 ..................................................n/a .........................n/a Stock market capitalization to GDP ......................................n/a .........................n/a Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people...................49 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............20 .....n ...............19.4 Public domestic bond market capitalization to GDP .............25 .....n...............29.3 Private international bonds to GDP .......................................48 .....n.................0.9 Public international bonds to GDP ........................................48 .....n.................0.1 Local currency corporate bond issuance to GDP ....................5 .....n.................3.1
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
101 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................46 .....n.................4.2 Venture capital availability......................................................19 .....n.................3.3 Ease of access to credit..........................................................2 .....n.................4.3 Financing through local equity market ..................................36 .....n.................3.8 Ease of access to loans ........................................................33 .....n.................3.0 Foreign direct investment to GDP.........................................44 .....n.................2.2 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................51 .....n.................0.0 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .....................................................................26 .....n.................0.2
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Colombia Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .......................................................45.0
US$ bn
GDP (US$ billions), 2009 .........................................................228.8
37.1%
GDP (current prices) per capita, 2009 ..............................5,087.4
44.0%
GDP (PPP) as share (%) of world total, 2009 ........................0.58 Compound annual growth rate of real GDP (%), 2005–09 ..3.35
n n n n
Public debt securities .......103.1 Private debt securities..........6.9 Banking deposits .................37.5 Equity securities ..................87.0 Total
234.5
2.9%
16.0%
Total/GDP 97.6%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................47 3.0 1
2
3
4
5
6
7
Factors, policies, and institutions
102
1st pillar: Institutional environment .........................................47
3.5
Financial sector liberalization ....................................................40 Corporate governance.................................................................44 Legal and regulatory issues .......................................................46 Contract enforcement..................................................................51
3.6 4.1 3.1 3.3
2nd pillar: Business environment .............................................36
4.3
Human capital ...............................................................................44 Taxes...............................................................................................34 Infrastructure ................................................................................42 Cost of doing business ................................................................19
3.7 4.5 3.5 5.6
3rd pillar: Financial stability......................................................34
4.4
Currency stability..........................................................................10 Banking system stability..............................................................41 Risk of sovereign debt crisis ......................................................40
5.1 4.0 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......................................49
2.6
Size index .......................................................................................49 Efficiency index.............................................................................48 Financial information disclosure................................................27
1.2 4.0 2.8
5th pillar: Non-banking financial services .............................37
2.1
IPO activity.....................................................................................23 M&A activity..................................................................................41 Insurance .......................................................................................33 Securitization.................................................................................34
2.2 1.5 2.6 2.0
6th pillar: Financial markets......................................................54
1.4
Foreign exchange markets .........................................................39 Derivatives markets .....................................................................37 Equity market development ........................................................51 Bond market development..........................................................37
1.0 1.0 1.2 1.9 1
Financial access 7th pillar: Financial access........................................................47
2.8
Commercial access......................................................................38 Retail access.................................................................................34
3.3 2.3 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................38 .....n .................1.2 Commitments to WTO agreement on trade in services.......44 .....n...............33.6 Domestic financial sector liberalization .................................34 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................52 .....n.................3.6 Efficacy of corporate boards .................................................29 .....n.................4.7 Reliance on professional management .................................43 .....n.................4.2 Willingness to delegate.........................................................35 .....n.................3.9 Strength of auditing and reporting standards .......................45 .....n.................4.3 Ethical behavior of firms........................................................34 .....n.................3.9 Protection of minority shareholders’ interests ......................46 .....n.................4.0
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................50 .....n.................2.6 Centralization of economic policymaking ..............................29 .....n.................3.1 Regulation of securities exchanges.......................................53 .....n.................3.5 Property rights.......................................................................47 .....n.................3.8 Intellectual property protection .............................................46 .....n.................3.0 Diversion of public funds.......................................................48 .....n.................2.6 Public trust of politicians .......................................................42 .....n.................2.2 Corruption perceptions index ................................................37 .....n.................3.7 Strength of legal rights index ................................................37 .....n.................5.0 Central bank transparency.....................................................29 .....n .................7.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................48 .....n.................2.8 Judicial independence ...........................................................41 .....n.................3.5 Irregular payments in judicial decisions.................................44 .....n.................3.3 Time to enforce a contract ....................................................55 .....n ...........1346.0 Number of procedures to enforce a contract .......................26 .....n...............34.0 Strength of investor protection index......................................4 .....n.................8.3 Cost of enforcing contracts...................................................55 .....n...............52.6
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................36 .....n.................4.3 Quality of math and science education.................................42 .....n.................3.5 Extent of staff training...........................................................51 .....n.................3.6 Local availability of specialized research and training services .............................................................43 .....n.................4.1 Brain drain and ease of hiring foreign labor ..........................45 .....n.................3.5 Tertiary enrollment ................................................................37 .....n...............35.4
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................44 .....n.................4.0 Distortive effect of taxes and subsidies on competition.......49 .....n.................3.6 Marginal tax variation ............................................................21 .....n ...............–0.9 Time to pay taxes..................................................................26 .....n.............208.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................48 .....n.................3.6 Quality of telephone infrastructure .......................................34 .....n.................6.2 Internet users .......................................................................30 .....n...............38.5 Broadband Internet subscribers ............................................41 .....n.................4.2 Telephone lines......................................................................42 .....n................17.9 Mobile telephone subscribers...............................................37 .....n ...............91.9
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................41 .....n ...............12.8
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Colombia
103
2: Country/Economy Profiles
Colombia Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................17 .....n.................2.0 Cost of closing a business ......................................................1 .....n .................1.0 Time to start a business........................................................32 .....n...............20.0 Time to register property ......................................................21 .....n...............20.0 Time to close a business ......................................................36 .....n.................3.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................15 .....n.................2.8 External vulnerability indicator...............................................16 .....n...............43.6 Current account balance to GDP...........................................40 .....n ...............–2.5 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) .......................9 .....n...............23.2 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................46 .....n.................2.3 Financial strengths indicator..................................................32 .....n.................4.0 Aggregate measure of real estate bubbles.............................8 .....n.................6.3 Financial Stress Index ...........................................................26 .....n.................5.9 Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises.........................................49 .....n .............100.3
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................35 .....n ...............13.0 Foreign currency sovereign rating .........................................43 .....n ...............10.3 Aggregate macroprudential indicator ....................................37 .....n.................4.8 Manageability of public debt ................................................27 .....n...............46.2 Credit default swap spreads .................................................32 .....n .............145.8
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
104
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n ...............47.5 Central bank assets to GDP ..................................................35 .....n.................0.4 Financial system deposits to GDP ........................................51 .....n ...............21.0 M2 to GDP ............................................................................52 .....n...............36.0 Private credit to GDP.............................................................37 .....n...............43.0 Bank deposits to GDP ...........................................................54 .....n ...............21.0 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................41 .....n.................3.6 Bank overhead costs .............................................................51 .....n.................5.3 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................54 .....n.................5.7 Non-performing bank loans to total loans .............................23 .....n.................4.6
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................20 .....n...............60.5 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................28 .....n.................0.7 IPO proceeds amount ...........................................................13 .....n.................0.5 Share of world IPOs ..............................................................48 .....n.................0.1
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.2 M&A transaction value to GDP .............................................38 .....n.................2.9 Share of total number of M&A deals ....................................42 .....n.................0.2
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................39 .....n.................0.7 Non–life insurance density ...................................................38 .....n .................1.6 Real growth of direct insurance premiums .............................5 .....n.................0.1 Life insurance coverage ........................................................33 .....n.................0.3 Non–life insurance coverage .................................................24 .....n.................0.7 Relative value-added of insurance to GDP ............................28 .....n .................1.1
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................33 .....n .................1.1 Share of total number of securitization deals .......................26 .....n.................0.3
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Colombia
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................37 .....n.................0.1 Outright forward foreign exchange turnover .........................31 .....n.................0.1 Foreign exchange swap turnover ..........................................41 .....n.................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 .....n.................0.0 Interest rate derivatives turnover: Swaps..............................38 .....n.................0.0 Interest rate derivatives turnover: Options...........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ......35 .....n.................0.0 Foreign exchange derivatives turnover: Options ...................39 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................47 .....n.................5.5 Stock market capitalization to GDP .......................................36 .....n...............56.1 Stock market value traded to GDP........................................41 .....n.................4.4 Number of listed companies per 10,000 people...................46 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............37 .....n.................0.4 Public domestic bond market capitalization to GDP .............30 .....n...............25.1 Private international bonds to GDP .......................................44 .....n.................2.1 Public international bonds to GDP.........................................14 .....n .................7.5 Local currency corporate bond issuance to GDP ..................26 .....n.................0.6
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
105 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................42 .....n.................4.5 Venture capital availability......................................................42 .....n.................2.5 Ease of access to credit........................................................20 .....n.................3.4 Financing through local equity market ..................................45 .....n.................3.5 Ease of access to loans ........................................................38 .....n.................2.9 Foreign direct investment to GDP.........................................22 .....n.................4.6 Retail access Market penetration of bank accounts ...................................18 .....n ......126,743.7 Commercial bank branches ...................................................30 .....n ...............14.3 Total number of ATMs...........................................................38 .....n...............29.6 Total number of point of sale (POS) devices.........................26 .....n .............441.1 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................12 .....n.................6.5
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Czech Republic Key indicators
Financial assets by major type, 2008 17.6%
Population (millions), 2009 .......................................................10.5
US$ bn
21.1%
GDP (US$ billions), 2009 .........................................................194.8 GDP (current prices) per capita, 2009 ............................18,557.1 GDP (PPP) as share (%) of world total, 2009 ........................0.37
12.8%
Compound annual growth rate of real GDP (%), 2005–09 ..2.14
n n n n
Public debt securities .........58.6 Private debt securities........35.3 Banking deposits ...............134.2 Equity securities ..................48.9 Total
48.5%
277.0
Total/GDP 128.2%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................33 3.5 1
2
3
4
5
6
7
Factors, policies, and institutions
106
1st pillar: Institutional environment .........................................33
4.2
Financial sector liberalization ....................................................30 Corporate governance.................................................................26 Legal and regulatory issues .......................................................32 Contract enforcement..................................................................35
4.5 4.5 3.6 4.2
2nd pillar: Business environment .............................................28
4.7
Human capital ...............................................................................20 Taxes...............................................................................................26 Infrastructure ................................................................................24 Cost of doing business ................................................................45
4.6 4.8 4.9 4.4
3rd pillar: Financial stability......................................................22
4.8
Currency stability..........................................................................24 Banking system stability..............................................................25 Risk of sovereign debt crisis ......................................................24
4.3 4.7 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......................................29
3.9
Size index .......................................................................................34 Efficiency index.............................................................................17 Financial information disclosure................................................19
2.2 5.7 3.4
5th pillar: Non-banking financial services .............................44
1.7
IPO activity.....................................................................................24 M&A activity..................................................................................39 Insurance .......................................................................................43 Securitization.................................................................................53
2.1 1.6 2.1 1.1
6th pillar: Financial markets......................................................46
1.6
Foreign exchange markets .........................................................31 Derivatives markets .....................................................................33 Equity market development ........................................................45 Bond market development..........................................................25
1.1 1.2 1.6 2.3 1
Financial access 7th pillar: Financial access........................................................30
3.3
Commercial access......................................................................28 Retail access.................................................................................24
3.6 3.0 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................28 .....n.................2.5 Commitments to WTO agreement on trade in services.......29 .....n...............53.4 Domestic financial sector liberalization .................................44 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................23 .....n.................4.4 Efficacy of corporate boards .................................................23 .....n.................4.8 Reliance on professional management .................................22 .....n.................5.0 Willingness to delegate.........................................................20 .....n.................4.3 Strength of auditing and reporting standards .......................29 .....n.................5.1 Ethical behavior of firms........................................................43 .....n.................3.6 Protection of minority shareholders’ interests ......................45 .....n.................4.0
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................44 .....n.................2.7 Centralization of economic policymaking ..............................10 .....n.................4.3 Regulation of securities exchanges.......................................30 .....n.................4.6 Property rights.......................................................................36 .....n.................4.4 Intellectual property protection .............................................32 .....n.................3.9 Diversion of public funds.......................................................47 .....n.................2.7 Public trust of politicians .......................................................49 .....n .................1.9 Corruption perceptions index ................................................28 .....n.................4.9 Strength of legal rights index ................................................30 .....n.................6.0 Central bank transparency....................................................n/a .........................n/a
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................40 .....n.................3.1 Judicial independence ...........................................................33 .....n.................4.0 Irregular payments in judicial decisions.................................37 .....n.................4.0 Time to enforce a contract ....................................................42 .....n..............611.0 Number of procedures to enforce a contract .........................7 .....n ...............27.0 Strength of investor protection index....................................39 .....n.................5.0 Cost of enforcing contracts...................................................48 .....n...............33.0
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................33 .....n.................4.4 Quality of math and science education.................................13 .....n.................4.9 Extent of staff training...........................................................27 .....n.................4.4 Local availability of specialized research and training services .............................................................16 .....n.................5.4 Brain drain and ease of hiring foreign labor ..........................32 .....n.................3.9 Tertiary enrollment ................................................................26 .....n...............54.8
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................32 .....n.................5.1 Distortive effect of taxes and subsidies on competition.......32 .....n.................4.1 Marginal tax variation ..............................................................2 .....n .............–19.5 Time to pay taxes..................................................................52 .....n .............613.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................25 .....n.................5.1 Quality of telephone infrastructure .......................................25 .....n.................6.5 Internet users .......................................................................23 .....n...............58.4 Broadband Internet subscribers ............................................24 .....n................17.1 Telephone lines......................................................................36 .....n ...............21.9 Mobile telephone subscribers.................................................8 .....n .............133.5
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................36 .....n.................9.2
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Czech Republic
107
2: Country/Economy Profiles
Czech Republic Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................26 .....n.................3.0 Cost of closing a business ....................................................31 .....n ...............15.0 Time to start a business........................................................27 .....n ...............15.0 Time to register property ......................................................49 .....n...............78.0 Time to close a business ......................................................56 .....n.................6.5
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................10 .....n.................4.3 External vulnerability indicator...............................................23 .....n ...............76.2 Current account balance to GDP...........................................39 .....n ...............–2.4 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................25 .....n...............45.5 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................27 .....n .................1.5 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles...........................36 .....n.................4.1 Financial Stress Index ...........................................................31 .....n.................8.8 Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................24 .....n ...............16.0 Foreign currency sovereign rating .........................................26 .....n ...............15.0 Aggregate macroprudential indicator ....................................34 .....n.................4.9 Manageability of public debt ................................................16 .....n...............33.1 Credit default swap spreads .................................................20 .....n .............100.0
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
108
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............60.9 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................28 .....n ...............61.5 M2 to GDP ............................................................................31 .....n ...............71.3 Private credit to GDP.............................................................35 .....n...............48.4 Bank deposits to GDP ...........................................................31 .....n ...............61.3 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator.............................................17 .....n.................4.7 Bank overhead costs .............................................................20 .....n.................2.1 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................29 .....n .................1.9 Non-performing bank loans to total loans .............................26 .....n.................5.3
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage ..............................................17 .....n...............73.1 Public credit registry coverage ..............................................17 .....n.................4.9
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................30 .....n.................0.6 IPO proceeds amount ...........................................................15 .....n.................0.5 Share of world IPOs ..............................................................46 .....n.................0.2
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.2 M&A transaction value to GDP .............................................35 .....n.................3.4 Share of total number of M&A deals ....................................33 .....n.................0.3
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................30 .....n .................1.6 Non–life insurance density ...................................................22 .....n.................2.2 Real growth of direct insurance premiums ...........................36 .....n.................0.0 Life insurance coverage ........................................................40 .....n.................0.2 Non–life insurance coverage .................................................41 .....n.................0.2 Relative value-added of insurance to GDP ............................33 .....n.................0.9
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................52 .....n.................0.2 Share of total number of securitization deals .......................50 .....n.................0.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Czech Republic
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................35 .....n.................0.1 Outright forward foreign exchange turnover .........................24 .....n.................0.2 Foreign exchange swap turnover ..........................................31 .....n.................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 .....n.................0.1 Interest rate derivatives turnover: Swaps..............................28 .....n.................0.0 Interest rate derivatives turnover: Options............................28 .....n.................0.0 Foreign exchange derivatives turnover: Currency swaps ......35 .....n.................0.0 Foreign exchange derivatives turnover: Options ...................32 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................33 .....n...............48.7 Stock market capitalization to GDP .......................................43 .....n...............44.2 Stock market value traded to GDP........................................33 .....n ...............27.0 Number of listed companies per 10,000 people...................37 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............28 .....n................11.5 Public domestic bond market capitalization to GDP..............10 .....n...............46.0 Private international bonds to GDP .......................................35 .....n.................4.8 Public international bonds to GDP ........................................23 .....n.................4.5 Local currency corporate bond issuance to GDP ..................33 .....n.................0.2
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
109 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................34 .....n.................4.7 Venture capital availability......................................................41 .....n.................2.6 Ease of access to credit ........................................................17 .....n.................3.5 Financing through local equity market ..................................27 .....n.................4.0 Ease of access to loans ........................................................31 .....n.................3.1 Foreign direct investment to GDP .........................................17 .....n.................5.5 Retail access Market penetration of bank accounts ...................................14 .....n ......173,925.7 Commercial bank branches ...................................................17 .....n...............22.2 Total number of ATMs...........................................................34 .....n...............39.9 Total number of point of sale (POS) devices.........................18 .....n.............869.0 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Denmark Key indicators
Financial assets by major type, 2008 10.6%
Population (millions), 2009 .........................................................5.5
9.4% US$ bn
GDP (US$ billions), 2009 .........................................................309.3 GDP (current prices) per capita, 2009 ............................56,115.3
n n n n
21.5%
GDP (PPP) as share (%) of world total, 2009 ........................0.29 Compound annual growth rate of real GDP (%), 2005–09–0.21
Public debt securities .......116.5 Private debt securities......722.1 Banking deposits ...............266.3 Equity securities ................131.5 Total
58.4%
1,236.4
Total/GDP 362.8%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................16 4.3 1
2
3
4
5
6
7
Factors, policies, and institutions
110
1st pillar: Institutional environment ...........................................4
5.9
Financial sector liberalization ......................................................1 Corporate governance...................................................................6 Legal and regulatory issues .........................................................6 Contract enforcement..................................................................12
7.0 5.6 5.4 5.6
2nd pillar: Business environment ...............................................6
5.8
Human capital .................................................................................5 Taxes...............................................................................................28 Infrastructure ..................................................................................2 Cost of doing business ..................................................................5
5.5 4.8 6.4 6.5
3rd pillar: Financial stability......................................................26
4.7
Currency stability..........................................................................29 Banking system stability..............................................................36 Risk of sovereign debt crisis ......................................................10
3.9 4.2 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......................................19
4.2
Size index .........................................................................................9 Efficiency index.............................................................................13 Financial information disclosure................................................52
4.0 5.9 1.2
5th pillar: Non-banking financial services .............................30
2.3
IPO activity.....................................................................................49 M&A activity..................................................................................32 Insurance .......................................................................................19 Securitization.................................................................................18
1.1 1.9 3.2 3.0
6th pillar: Financial markets......................................................16
3.8
Foreign exchange markets .........................................................10 Derivatives markets .......................................................................9 Equity market development ........................................................23 Bond market development..........................................................10
3.0 5.4 3.0 4.0 1
Financial access 7th pillar: Financial access........................................................25
3.5
Commercial access......................................................................30 Retail access ...............................................................................n/a
3.5 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n...............73.5 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................19 .....n.................4.5 Efficacy of corporate boards ...................................................9 .....n.................5.2 Reliance on professional management .................................10 .....n.................5.8 Willingness to delegate...........................................................3 .....n.................5.8 Strength of auditing and reporting standards ........................11 .....n.................5.7 Ethical behavior of firms..........................................................4 .....n.................6.5 Protection of minority shareholders’ interests ........................7 .....n.................5.4
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation..........................................11 .....n.................3.8 Centralization of economic policymaking ..............................16 .....n.................3.8 Regulation of securities exchanges .......................................11 .....n.................5.3 Property rights .......................................................................10 .....n.................6.0 Intellectual property protection ...............................................9 .....n.................5.7 Diversion of public funds.........................................................3 .....n.................6.4 Public trust of politicians .........................................................6 .....n.................5.4 Corruption perceptions index ..................................................1 .....n.................9.3 Strength of legal rights index ..................................................4 .....n.................9.0 Central bank transparency.....................................................29 .....n .................7.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ........................................5 .....n.................5.4 Judicial independence .............................................................2 .....n.................6.4 Irregular payments in judicial decisions...................................4 .....n.................6.6 Time to enforce a contract ....................................................12 .....n.............380.0 Number of procedures to enforce a contract .......................26 .....n...............34.0 Strength of investor protection index....................................18 .....n.................6.3 Cost of enforcing contracts...................................................25 .....n...............23.3
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools............................................11 .....n.................5.4 Quality of math and science education .................................10 .....n.................5.1 Extent of staff training.............................................................6 .....n.................5.4 Local availability of specialized research and training services ...............................................................8 .....n.................5.8 Brain drain and ease of hiring foreign labor...........................18 .....n.................4.6 Tertiary enrollment ..................................................................4 .....n...............80.3
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................4 .....n.................6.6 Distortive effect of taxes and subsidies on competition.........9 .....n.................4.9 Marginal tax variation ............................................................42 .....n...............22.8 Time to pay taxes ..................................................................16 .....n .............135.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................9 .....n.................6.3 Quality of telephone infrastructure........................................11 .....n.................6.7 Internet users .........................................................................3 .....n...............83.9 Broadband Internet subscribers ..............................................2 .....n ...............37.1 Telephone lines ......................................................................11 .....n...............45.6 Mobile telephone subscribers ...............................................14 .....n .............125.7
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business .....................................................1 .....n.................0.0
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Denmark
111
2: Country/Economy Profiles
Denmark Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ....................................................9 .....n.................0.6 Cost of closing a business ......................................................5 .....n.................4.0 Time to start a business..........................................................7 .....n.................6.0 Time to register property ......................................................35 .....n...............42.0 Time to close a business.......................................................11 .....n .................1.1
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................33 .....n.................0.6 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................22 .....n.................2.6 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................8 .....n ...............–8.4
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................35 .....n.................2.0 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles...........................26 .....n.................4.9 Financial Stress Index ...........................................................30 .....n.................8.5 Tier 1 capital ratio ..................................................................14 .....n................11.6 Output loss during banking crises.........................................43 .....n...............72.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator ....................................42 .....n.................4.5 Manageability of public debt ................................................24 .....n ...............41.6 Credit default swap spreads ...................................................4 .....n ...............41.4
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
112
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............219.5 Central bank assets to GDP ..................................................36 .....n.................0.4 Financial system deposits to GDP ........................................25 .....n ...............67.0 M2 to GDP ............................................................................29 .....n...............73.6 Private credit to GDP...............................................................2 .....n.............209.8 Bank deposits to GDP ...........................................................26 .....n ...............67.3 Money market instruments to GDP ........................................8 .....n.................4.7
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................32 .....n.................4.2 Bank overhead costs .............................................................30 .....n.................2.5 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets ...............................................4 .....n.................0.9 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................46 .....n.................5.2 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................47 .....n.................0.1 IPO proceeds amount ...........................................................50 .....n.................0.1 Share of world IPOs ..............................................................29 .....n.................0.4
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.3 M&A transaction value to GDP .............................................31 .....n.................3.7 Share of total number of M&A deals ....................................23 .....n.................0.7
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density .............................................................9 .....n.................6.8 Non–life insurance density ...................................................10 .....n.................3.5 Real growth of direct insurance premiums ...........................28 .....n.................0.0 Life insurance coverage ........................................................32 .....n.................0.4 Non–life insurance coverage .................................................42 .....n.................0.2 Relative value-added of insurance to GDP ............................24 .....n .................1.1
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................10 .....n.................2.9 Share of total number of securitization deals .......................39 .....n.................0.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Denmark
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover.............................................12 .....n .................1.2 Outright forward foreign exchange turnover ...........................9 .....n.................2.3 Foreign exchange swap turnover ............................................9 .....n.................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 .....n .................1.1 Interest rate derivatives turnover: Swaps..............................16 .....n.................0.3 Interest rate derivatives turnover: Options ............................11 .....n.................0.5 Foreign exchange derivatives turnover: Currency swaps ........9 .....n .................1.9 Foreign exchange derivatives turnover: Options ...................15 .....n.................0.6
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................18 .....n...............99.0 Stock market capitalization to GDP .......................................28 .....n ...............91.7 Stock market value traded to GDP ........................................19 .....n...............98.8 Number of listed companies per 10,000 people ..................n/a .........................n/a
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ..............1 .....n .............175.7 Public domestic bond market capitalization to GDP .............24 .....n...............29.8 Private international bonds to GDP .......................................15 .....n...............44.7 Public international bonds to GDP ........................................20 .....n.................6.0 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
113 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................20 .....n.................5.7 Venture capital availability......................................................21 .....n.................3.3 Ease of access to credit........................................................51 .....n.................2.1 Financing through local equity market ..................................40 .....n.................3.7 Ease of access to loans.........................................................19 .....n.................3.5 Foreign direct investment to GDP.........................................32 .....n.................3.5 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches .....................................................4 .....n...............45.4 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Egypt Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .......................................................76.7
US$ bn
24.1%
GDP (US$ billions), 2009 .........................................................188.0 40.0%
GDP (current prices) per capita, 2009 ..............................2,450.4 GDP (PPP) as share (%) of world total, 2009 ........................0.68 Compound annual growth rate of real GDP (%), 2005–09 ..5.12
n n n n
Total
1.0%
35.0%
Public debt securities .......142.8 Private debt securities..........3.6 Banking deposits ...............124.8 Equity securities ..................85.9 357.0
Total/GDP 219.8%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................38 3.2 1
2
3
4
5
6
7
Factors, policies, and institutions
114
1st pillar: Institutional environment .........................................38
3.8
Financial sector liberalization ....................................................32 Corporate governance.................................................................37 Legal and regulatory issues .......................................................48 Contract enforcement..................................................................44
4.4 4.3 3.1 3.7
2nd pillar: Business environment .............................................48
3.8
Human capital ...............................................................................54 Taxes...............................................................................................38 Infrastructure ................................................................................50 Cost of doing business ................................................................40
3.3 4.4 2.9 4.7
3rd pillar: Financial stability......................................................35
4.4
Currency stability..........................................................................18 Banking system stability..............................................................11 Risk of sovereign debt crisis ......................................................52
4.6 5.3 3.0 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......................................42
3.0
Size index .......................................................................................20 Efficiency index.............................................................................51 Financial information disclosure................................................47
3.2 3.7 1.4
5th pillar: Non-banking financial services .............................33
2.1
IPO activity.....................................................................................37 M&A activity..................................................................................26 Insurance .......................................................................................37 Securitization.................................................................................31
1.6 2.3 2.4 2.2
6th pillar: Financial markets......................................................38
1.9
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................39 Bond market development ........................................................n/a
n/a n/a 1.9 n/a 1
Financial access 7th pillar: Financial access........................................................21
3.6
Commercial access......................................................................26 Retail access ...............................................................................n/a
3.6 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................27 .....n.................2.5 Commitments to WTO agreement on trade in services.......36 .....n...............39.7 Domestic financial sector liberalization .................................43 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................41 .....n.................4.0 Efficacy of corporate boards .................................................40 .....n.................4.4 Reliance on professional management .................................46 .....n.................4.1 Willingness to delegate.........................................................36 .....n.................3.7 Strength of auditing and reporting standards .......................33 .....n.................4.8 Ethical behavior of firms........................................................33 .....n.................4.1 Protection of minority shareholders’ interests ......................28 .....n.................4.6
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................27 .....n.................3.1 Centralization of economic policymaking ..............................52 .....n.................2.1 Regulation of securities exchanges.......................................36 .....n.................4.3 Property rights.......................................................................32 .....n.................4.6 Intellectual property protection .............................................39 .....n.................3.6 Diversion of public funds.......................................................40 .....n.................3.1 Public trust of politicians .......................................................22 .....n.................3.6 Corruption perceptions index ................................................47 .....n.................2.8 Strength of legal rights index ................................................50 .....n.................3.0 Central bank transparency.....................................................45 .....n.................2.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................28 .....n.................3.8 Judicial independence ...........................................................35 .....n.................3.9 Irregular payments in judicial decisions.................................28 .....n.................5.0 Time to enforce a contract ....................................................53 .....n ..........1,010.0 Number of procedures to enforce a contract .......................48 .....n ...............41.0 Strength of investor protection index....................................35 .....n.................5.3 Cost of enforcing contracts...................................................34 .....n...............26.2
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................57 .....n.................3.3 Quality of math and science education.................................52 .....n.................2.7 Extent of staff training...........................................................54 .....n.................3.3 Local availability of specialized research and training services .............................................................42 .....n.................4.1 Brain drain and ease of hiring foreign labor ..........................54 .....n.................3.2 Tertiary enrollment ................................................................39 .....n...............34.7
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................40 .....n.................4.2 Distortive effect of taxes and subsidies on competition.......24 .....n.................4.4 Marginal tax variation ............................................................16 .....n ...............–5.6 Time to pay taxes..................................................................47 .....n.............480.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................35 .....n.................4.3 Quality of telephone infrastructure........................................18 .....n.................6.6 Internet users .......................................................................48 .....n ...............16.7 Broadband Internet subscribers ............................................51 .....n.................0.9 Telephone lines......................................................................46 .....n ...............14.6 Mobile telephone subscribers...............................................52 .....n...............50.6
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................46 .....n ...............16.1
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Egypt
115
2: Country/Economy Profiles
Egypt Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................10 .....n.................0.9 Cost of closing a business ....................................................47 .....n...............22.0 Time to start a business ........................................................11 .....n .................7.0 Time to register property ......................................................47 .....n...............72.0 Time to close a business ......................................................48 .....n.................4.2
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .......................8 .....n.................5.4 External vulnerability indicator.................................................3 .....n ...............15.2 Current account balance to GDP...........................................29 .....n.................0.0 Dollarization vulnerability indicator ........................................40 .....n...............62.0 External debt to GDP (developing economies) .......................3 .....n ...............16.8 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises ..................................................11 .....n.................0.5 Financial strengths indicator..................................................41 .....n.................3.0 Aggregate measure of real estate bubbles ...........................16 .....n.................5.7 Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises.........................................22 .....n.................0.4
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................41 .....n................11.0 Foreign currency sovereign rating .........................................44 .....n ...............10.0 Aggregate macroprudential indicator ....................................51 .....n.................3.5 Manageability of public debt ................................................52 .....n...............80.9 Credit default swap spreads .................................................41 .....n..............211.9
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
116
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............62.4 Central bank assets to GDP ....................................................1 .....n...............23.8 Financial system deposits to GDP ........................................21 .....n ...............76.5 M2 to GDP ............................................................................26 .....n...............82.2 Private credit to GDP.............................................................39 .....n ...............41.0 Bank deposits to GDP ...........................................................23 .....n ...............76.4 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator.............................................13 .....n.................4.8 Bank overhead costs .............................................................33 .....n.................2.8 Public ownership of banks ....................................................55 .....n...............62.3 Bank operating costs to assets .............................................23 .....n .................1.6 Non-performing bank loans to total loans .............................38 .....n ...............14.7
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................43 .....n.................8.2 Public credit registry coverage ..............................................18 .....n.................2.5
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................38 .....n.................0.3 IPO proceeds amount ...........................................................26 .....n.................0.3 Share of world IPOs ..............................................................51 .....n.................0.1
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.3 M&A transaction value to GDP .............................................17 .....n .................7.3 Share of total number of M&A deals ....................................45 .....n.................0.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................45 .....n.................0.4 Non–life insurance density ...................................................52 .....n.................0.5 Real growth of direct insurance premiums .............................9 .....n.................0.1 Life insurance coverage ........................................................35 .....n.................0.3 Non–life insurance coverage .................................................33 .....n.................0.4 Relative value-added of insurance to GDP ..............................9 .....n.................2.2
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................19 .....n .................1.8 Share of total number of securitization deals .......................42 .....n.................0.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Egypt
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 .....n...............29.0 Stock market capitalization to GDP .......................................25 .....n..............101.7 Stock market value traded to GDP........................................30 .....n...............39.0 Number of listed companies per 10,000 people...................35 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................47 .....n .................1.8 Public international bonds to GDP ........................................35 .....n .................1.8 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
117 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................50 .....n.................3.9 Venture capital availability......................................................28 .....n.................3.0 Ease of access to credit..........................................................5 .....n.................4.1 Financing through local equity market ..................................19 .....n.................4.2 Ease of access to loans ........................................................32 .....n.................3.0 Foreign direct investment to GDP.........................................18 .....n.................5.1 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 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................11 .....n .................7.2
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Finland Key indicators
Financial assets by major type, 2008 17.4%
Population (millions), 2009 .........................................................5.4
US$ bn
28.4%
GDP (US$ billions), 2009 .........................................................238.1 GDP (current prices) per capita, 2009 ............................44,491.5 GDP (PPP) as share (%) of world total, 2009 ........................0.26 Compound annual growth rate of real GDP (%), 2005–09 ..0.45
27.1%
n n n n
Public debt securities .........94.6 Private debt securities......147.2 Banking deposits ...............147.8 Equity securities ................154.4 Total
543.9
27.2%
Total/GDP 200.7%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................20 4.1 1
2
3
4
5
6
7
Factors, policies, and institutions
118
1st pillar: Institutional environment ...........................................7
5.8
Financial sector liberalization ....................................................23 Corporate governance...................................................................4 Legal and regulatory issues .........................................................4 Contract enforcement....................................................................5
6.0 5.7 5.5 5.9
2nd pillar: Business environment ...............................................4
5.9
Human capital .................................................................................1 Taxes...............................................................................................12 Infrastructure ..................................................................................6 Cost of doing business ..................................................................7
5.7 5.5 6.0 6.2
3rd pillar: Financial stability......................................................12
5.1
Currency stability..........................................................................28 Banking system stability..............................................................14 Risk of sovereign debt crisis ........................................................9
3.9 5.2 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......................................24
4.1
Size index .......................................................................................25 Efficiency index...............................................................................2 Financial information disclosure................................................44
3.0 6.5 1.4
5th pillar: Non-banking financial services .............................35
2.1
IPO activity.....................................................................................48 M&A activity..................................................................................31 Insurance .......................................................................................29 Securitization.................................................................................21
1.1 1.9 2.7 2.8
6th pillar: Financial markets......................................................20
3.3
Foreign exchange markets .........................................................29 Derivatives markets .....................................................................24 Equity market development ..........................................................7 Bond market development..........................................................13
1.1 1.9 5.2 3.8 1
Financial access 7th pillar: Financial access........................................................51
2.6
Commercial access......................................................................18 Retail access.................................................................................46
3.8 1.3 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.......31 .....n...............29.9 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................29 .....n.................4.3 Efficacy of corporate boards ...................................................7 .....n.................5.5 Reliance on professional management ...................................3 .....n.................6.1 Willingness to delegate...........................................................6 .....n.................5.2 Strength of auditing and reporting standards .........................4 .....n.................6.2 Ethical behavior of firms..........................................................2 .....n.................6.6 Protection of minority shareholders’ interests ........................2 .....n.................5.9
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation ...........................................3 .....n.................4.3 Centralization of economic policymaking ..............................12 .....n.................4.1 Regulation of securities exchanges.........................................6 .....n.................5.6 Property rights.........................................................................2 .....n.................6.4 Intellectual property protection ...............................................2 .....n.................6.2 Diversion of public funds.........................................................4 .....n.................6.3 Public trust of politicians .........................................................8 .....n.................5.1 Corruption perceptions index ..................................................5 .....n.................8.9 Strength of legal rights index ................................................19 .....n .................7.0 Central bank transparency.......................................................3 .....n................11.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ........................................4 .....n.................5.5 Judicial independence .............................................................5 .....n.................6.3 Irregular payments in judicial decisions...................................2 .....n.................6.7 Time to enforce a contract ....................................................11 .....n.............375.0 Number of procedures to enforce a contract .......................22 .....n...............32.0 Strength of investor protection index....................................27 .....n.................5.7 Cost of enforcing contracts.....................................................3 .....n ...............10.4
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools............................................15 .....n.................5.3 Quality of math and science education...................................3 .....n.................6.2 Extent of staff training.............................................................8 .....n.................5.2 Local availability of specialized research and training services ...............................................................7 .....n.................5.8 Brain drain and ease of hiring foreign labor...........................14 .....n.................4.6 Tertiary enrollment ..................................................................2 .....n...............93.8
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................3 .....n.................6.7 Distortive effect of taxes and subsidies on competition .......11 .....n.................4.9 Marginal tax variation ............................................................18 .....n ...............–3.6 Time to pay taxes..................................................................30 .....n.............243.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................7 .....n.................6.4 Quality of telephone infrastructure .........................................5 .....n.................6.9 Internet users .........................................................................4 .....n...............82.6 Broadband Internet subscribers ..............................................7 .....n...............30.5 Telephone lines......................................................................25 .....n ...............31.1 Mobile telephone subscribers ...............................................10 .....n .............128.8
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business....................................................10 .....n.................0.9
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Finland
119
2: Country/Economy Profiles
Finland Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................31 .....n.................4.1 Cost of closing a business ......................................................5 .....n.................4.0 Time to start a business........................................................25 .....n ...............14.0 Time to register property ......................................................12 .....n ...............14.0 Time to close a business ........................................................5 .....n.................0.9
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................33 .....n.................0.6 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................20 .....n.................2.9 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................6 .....n ...............–6.7
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................20 .....n .................1.3 Financial strengths indicator....................................................5 .....n.................8.0 Aggregate measure of real estate bubbles...........................29 .....n.................4.8 Financial Stress Index .............................................................6 .....n.................0.5 Tier 1 capital ratio....................................................................8 .....n ...............12.5 Output loss during banking crises.........................................48 .....n ...............87.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator ....................................38 .....n.................4.7 Manageability of public debt ................................................25 .....n...............44.4 Credit default swap spreads ...................................................2 .....n...............33.2
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
120
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............83.7 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................35 .....n...............50.6 M2 to GDP ............................................................................32 .....n...............70.8 Private credit to GDP.............................................................28 .....n...............80.5 Bank deposits to GDP ...........................................................37 .....n...............50.7 Money market instruments to GDP ........................................6 .....n.................6.6
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator.............................................12 .....n.................5.0 Bank overhead costs ...............................................................4 .....n .................1.0 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................11 .....n .................1.1 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................37 .....n ...............14.7 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................45 .....n.................0.2 IPO proceeds amount ...........................................................43 .....n.................0.1 Share of world IPOs ..............................................................48 .....n.................0.1
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.3 M&A transaction value to GDP .............................................29 .....n.................4.2 Share of total number of M&A deals ....................................29 .....n.................0.5
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density .............................................................6 .....n .................7.6 Non–life insurance density ...................................................28 .....n.................2.0 Real growth of direct insurance premiums ...........................26 .....n.................0.0 Life insurance coverage ........................................................30 .....n.................0.4 Non–life insurance coverage .................................................49 .....n.................0.1 Relative value-added of insurance to GDP ............................44 .....n.................0.6
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................13 .....n.................2.7 Share of total number of securitization deals .......................38 .....n.................0.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Finland
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................42 .....n.................0.1 Outright forward foreign exchange turnover .........................33 .....n.................0.1 Foreign exchange swap turnover ..........................................24 .....n.................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 .....n.................0.0 Interest rate derivatives turnover: Swaps..............................22 .....n.................0.1 Interest rate derivatives turnover: Options............................13 .....n.................0.3 Foreign exchange derivatives turnover: Currency swaps ......28 .....n.................0.1 Foreign exchange derivatives turnover: Options ...................27 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................10 .....n .............162.2 Stock market capitalization to GDP .......................................11 .....n .............148.8 Stock market value traded to GDP..........................................4 .....n.............299.4 Number of listed companies per 10,000 people ..................n/a .........................n/a
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............15 .....n...............29.3 Public domestic bond market capitalization to GDP .............39 .....n................11.1 Private international bonds to GDP .......................................20 .....n...............28.4 Public international bonds to GDP ..........................................5 .....n...............24.1 Local currency corporate bond issuance to GDP ....................8 .....n.................2.8
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
121 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication..............................................11 .....n.................6.1 Venture capital availability........................................................4 .....n.................4.2 Ease of access to credit........................................................24 .....n.................3.3 Financing through local equity market ..................................33 .....n.................3.9 Ease of access to loans ..........................................................3 .....n.................4.5 Foreign direct investment to GDP.........................................56 .....n ...............–1.8 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................51 .....n.................0.0 Total number of ATMs...........................................................35 .....n...............38.3 Total number of point of sale (POS) devices.........................33 .....n...............64.3 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
France Key indicators
Financial assets by major type, 2008 16.9%
Population (millions), 2009 .......................................................62.6
n n n n
GDP (current prices) per capita, 2009 ............................42,747.2 GDP (PPP) as share (%) of world total, 2009 ........................3.03
US$ bn
21.9%
GDP (US$ billions), 2009 ......................................................2,675.9
22.3%
Compound annual growth rate of real GDP (%), 2005–09 ..0.55
Public debt securities ....1,935.8 Private debt securities...3,425.4 Banking deposits ............1,969.3 Equity securities .............1,492.3 Total
8,822.7
38.8%
Total/GDP 307.8%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................11 4.6 1
2
3
4
5
6
7
Factors, policies, and institutions
122
1st pillar: Institutional environment .........................................17
5.5
Financial sector liberalization ......................................................1 Corporate governance.................................................................23 Legal and regulatory issues .......................................................15 Contract enforcement..................................................................15
7.0 4.9 4.7 5.4
2nd pillar: Business environment .............................................10
5.6
Human capital ...............................................................................12 Taxes.................................................................................................6 Infrastructure ..................................................................................7 Cost of doing business ................................................................27
5.1 6.0 5.9 5.2
3rd pillar: Financial stability......................................................11
5.1
Currency stability........................................................................n/a Banking system stability..............................................................27 Risk of sovereign debt crisis ......................................................13
n/a 4.6 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.............................................................................16 Financial information disclosure................................................29
3.1 5.8 2.6
5th pillar: Non-banking financial services .............................15
3.4
IPO activity.....................................................................................29 M&A activity..................................................................................11 Insurance .......................................................................................11 Securitization.................................................................................10
1.9 4.2 3.6 3.9
6th pillar: Financial markets........................................................7
4.6
Foreign exchange markets ...........................................................9 Derivatives markets .......................................................................1 Equity market development ........................................................20 Bond market development............................................................6
3.5 7.0 3.4 4.9 1
Financial access 7th pillar: Financial access........................................................14
4.2
Commercial access......................................................................17 Retail access.................................................................................10
3.8 4.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n .................1.5 Commitments to WTO agreement on trade in services.........1 .....n...............72.4 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................18 .....n.................4.5 Efficacy of corporate boards .................................................21 .....n.................5.0 Reliance on professional management .................................21 .....n.................5.1 Willingness to delegate.........................................................33 .....n.................3.9 Strength of auditing and reporting standards........................18 .....n.................5.5 Ethical behavior of firms........................................................14 .....n.................5.7 Protection of minority shareholders’ interests ......................25 .....n.................4.7
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................48 .....n.................2.6 Centralization of economic policymaking ..............................35 .....n.................2.9 Regulation of securities exchanges .......................................13 .....n.................5.2 Property rights .......................................................................14 .....n.................5.8 Intellectual property protection ...............................................5 .....n.................5.9 Diversion of public funds.......................................................17 .....n.................5.2 Public trust of politicians........................................................17 .....n.................3.9 Corruption perceptions index ................................................18 .....n.................6.9 Strength of legal rights index ................................................19 .....n .................7.0 Central bank transparency.......................................................3 .....n................11.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ........................................9 .....n.................5.0 Judicial independence ...........................................................24 .....n.................4.8 Irregular payments in judicial decisions.................................20 .....n.................5.8 Time to enforce a contract ......................................................8 .....n .............331.0 Number of procedures to enforce a contract .........................9 .....n...............29.0 Strength of investor protection index....................................35 .....n.................5.3 Cost of enforcing contracts ...................................................16 .....n................17.4
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................4 .....n.................5.7 Quality of math and science education...................................6 .....n.................5.4 Extent of staff training...........................................................23 .....n.................4.7 Local availability of specialized research and training services ...............................................................5 .....n.................5.9 Brain drain and ease of hiring foreign labor ..........................28 .....n.................4.0 Tertiary enrollment ................................................................25 .....n...............55.6
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................20 .....n.................6.0 Distortive effect of taxes and subsidies on competition.......18 .....n.................4.5 Marginal tax variation ..............................................................5 .....n ..............–17.3 Time to pay taxes ..................................................................15 .....n .............132.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................4 .....n.................6.6 Quality of telephone infrastructure........................................12 .....n.................6.7 Internet users .......................................................................17 .....n...............68.2 Broadband Internet subscribers ..............................................9 .....n...............28.5 Telephone lines........................................................................5 .....n...............56.4 Mobile telephone subscribers...............................................35 .....n...............93.5
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business....................................................10 .....n.................0.9
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
France
123
2: Country/Economy Profiles
France Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................44 .....n.................6.1 Cost of closing a business ....................................................20 .....n.................9.0 Time to start a business ........................................................11 .....n .................7.0 Time to register property ......................................................53 .....n...............98.0 Time to close a business ......................................................24 .....n .................1.9
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................27 .....n .................1.0 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................35 .....n ...............–1.6 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................35 .....n.................2.0 Financial strengths indicator....................................................6 .....n .................7.0 Aggregate measure of real estate bubbles...........................38 .....n.................4.0 Financial Stress Index ............................................................11 .....n .................1.6 Tier 1 capital ratio..................................................................30 .....n.................8.9 Output loss during banking crises.........................................34 .....n...............42.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator.....................................17 .....n.................5.5 Manageability of public debt ................................................50 .....n ...............77.0 Credit default swap spreads..................................................15 .....n...............86.3
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
124
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............121.3 Central bank assets to GDP ..................................................28 .....n.................0.9 Financial system deposits to GDP ........................................23 .....n...............68.3 M2 to GDP ............................................................................24 .....n...............86.2 Private credit to GDP.............................................................14 .....n .............106.7 Bank deposits to GDP ...........................................................25 .....n...............68.3 Money market instruments to GDP ......................................12 .....n.................2.5
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................33 .....n.................4.2 Bank overhead costs .............................................................32 .....n.................2.7 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets ...............................................9 .....n .................1.1 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................49 .....n.................0.0 Public credit registry coverage ................................................7 .....n...............32.5
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................14 .....n .................1.2 IPO proceeds amount ...........................................................47 .....n.................0.1 Share of world IPOs ..............................................................11 .....n.................2.2
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................3.6 M&A transaction value to GDP .............................................26 .....n.................4.6 Share of total number of M&A deals ....................................10 .....n.................3.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density .............................................................7 .....n .................7.3 Non–life insurance density ...................................................11 .....n.................3.3 Real growth of direct insurance premiums ...........................45 .....n ...............–0.1 Life insurance coverage ..........................................................7 .....n.................4.5 Non–life insurance coverage ...................................................9 .....n.................2.1 Relative value-added of insurance to GDP ............................34 .....n.................0.9
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................23 .....n .................1.7 Share of total number of securitization deals .........................8 .....n .................1.9
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
France
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ..............................................9 .....n.................2.0 Outright forward foreign exchange turnover .........................10 .....n .................1.8 Foreign exchange swap turnover ............................................8 .....n.................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 .....n.................5.6 Interest rate derivatives turnover: Swaps................................3 .....n.................9.0 Interest rate derivatives turnover: Options..............................4 .....n.................6.0 Foreign exchange derivatives turnover: Currency swaps ........5 .....n.................3.6 Foreign exchange derivatives turnover: Options .....................7 .....n.................2.2
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................12 .....n .............146.6 Stock market capitalization to GDP .......................................22 .....n .............112.3 Stock market value traded to GDP ........................................13 .....n .............159.0 Number of listed companies per 10,000 people...................21 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............10 .....n...............54.4 Public domestic bond market capitalization to GDP ...............6 .....n...............58.5 Private international bonds to GDP .........................................9 .....n ...............67.4 Public international bonds to GDP ........................................33 .....n .................1.9 Local currency corporate bond issuance to GDP ....................3 .....n.................3.4
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
125 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication ...............................................7 .....n.................6.2 Venture capital availability......................................................23 .....n.................3.2 Ease of access to credit........................................................50 .....n.................2.3 Financing through local equity market ....................................4 .....n.................4.8 Ease of access to loans ........................................................22 .....n.................3.4 Foreign direct investment to GDP.........................................25 .....n.................4.4 Retail access Market penetration of bank accounts ...................................29 .....n.........77,198.7 Commercial bank branches .....................................................5 .....n...............43.2 Total number of ATMs ...........................................................10 .....n .............105.3 Total number of point of sale (POS) devices...........................7 .....n..........2,456.9 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Germany Key indicators
Financial assets by major type, 2008 9.8%
Population (millions), 2009 .......................................................82.0
US$ bn
21.6%
GDP (US$ billions), 2009 ......................................................3,352.7
n n n n
GDP (current prices) per capita, 2009 ............................40,874.6 GDP (PPP) as share (%) of world total, 2009 ........................4.03 34.0%
Compound annual growth rate of real GDP (%), 2005–09 ..0.35
Public debt securities ....2,426.1 Private debt securities...3,895.9 Banking deposits ............3,822.4 Equity securities .............1,108.0 Total
34.6%
11,252.3
Total/GDP 306.3%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................13 4.5 1
2
3
4
5
6
7
Factors, policies, and institutions
126
1st pillar: Institutional environment ...........................................8
5.8
Financial sector liberalization ......................................................1 Corporate governance.................................................................11 Legal and regulatory issues .......................................................11 Contract enforcement....................................................................8
7.0 5.4 5.1 5.6
2nd pillar: Business environment .............................................12
5.5
Human capital ...............................................................................17 Taxes...............................................................................................16 Infrastructure ..................................................................................4 Cost of doing business ................................................................20
4.9 5.3 6.3 5.6
3rd pillar: Financial stability......................................................24
4.7
Currency stability..........................................................................21 Banking system stability..............................................................35 Risk of sovereign debt crisis ......................................................15
4.3 4.2 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......................................17
4.3
Size index .......................................................................................15 Efficiency index.............................................................................32 Financial information disclosure................................................11
3.8 5.0 4.0
5th pillar: Non-banking financial services .............................14
3.4
IPO activity.....................................................................................20 M&A activity....................................................................................8 Insurance .......................................................................................14 Securitization.................................................................................17
2.3 4.7 3.5 3.3
6th pillar: Financial markets......................................................10
4.3
Foreign exchange markets ...........................................................8 Derivatives markets .......................................................................8 Equity market development ........................................................24 Bond market development............................................................9
4.1 6.1 3.0 4.6 1
Financial access 7th pillar: Financial access........................................................29
3.3
Commercial access......................................................................45 Retail access.................................................................................16
3.2 3.5 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n...............73.5 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ................................9 .....n.................4.8 Efficacy of corporate boards ..................................................11 .....n.................5.2 Reliance on professional management .................................12 .....n.................5.7 Willingness to delegate...........................................................9 .....n.................5.0 Strength of auditing and reporting standards........................13 .....n.................5.6 Ethical behavior of firms ........................................................11 .....n.................6.0 Protection of minority shareholders’ interests ........................8 .....n.................5.2
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................33 .....n.................3.0 Centralization of economic policymaking ................................4 .....n.................4.8 Regulation of securities exchanges.......................................22 .....n.................4.9 Property rights.........................................................................7 .....n.................6.1 Intellectual property protection ...............................................6 .....n.................5.7 Diversion of public funds .......................................................11 .....n.................5.7 Public trust of politicians .......................................................16 .....n.................4.0 Corruption perceptions index.................................................11 .....n.................8.0 Strength of legal rights index ................................................19 .....n .................7.0 Central bank transparency.......................................................3 .....n................11.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................11 .....n.................5.0 Judicial independence .............................................................4 .....n.................6.4 Irregular payments in judicial decisions...................................9 .....n.................6.4 Time to enforce a contract ....................................................14 .....n.............394.0 Number of procedures to enforce a contract ........................11 .....n...............30.0 Strength of investor protection index....................................39 .....n.................5.0 Cost of enforcing contracts.....................................................9 .....n ...............14.4
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................22 .....n.................4.9 Quality of math and science education.................................22 .....n.................4.7 Extent of staff training.............................................................7 .....n.................5.2 Local availability of specialized research and training services ...............................................................2 .....n.................6.2 Brain drain and ease of hiring foreign labor ..........................22 .....n.................4.2 Tertiary enrollment ................................................................33 .....n...............43.6
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................13 .....n.................6.3 Distortive effect of taxes and subsidies on competition.......48 .....n.................3.7 Marginal tax variation ............................................................15 .....n................-6.2 Time to pay taxes..................................................................23 .....n .............196.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................8 .....n.................6.3 Quality of telephone infrastructure .......................................20 .....n.................6.5 Internet users .......................................................................11 .....n...............75.3 Broadband Internet subscribers ............................................13 .....n ...............27.5 Telephone lines........................................................................2 .....n...............62.5 Mobile telephone subscribers ...............................................11 .....n .............128.3
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................20 .....n.................4.7
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Germany
127
2: Country/Economy Profiles
Germany Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................42 .....n.................5.2 Cost of closing a business ....................................................17 .....n.................8.0 Time to start a business........................................................31 .....n...............18.0 Time to register property ......................................................33 .....n...............40.0 Time to close a business.......................................................15 .....n .................1.2
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................37 .....n.................0.4 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................13 .....n.................6.4 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................4 .....n ...............27.7
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................35 .....n.................2.0 Financial strengths indicator..................................................22 .....n.................5.0 Aggregate measure of real estate bubbles...........................18 .....n.................5.4 Financial Stress Index ...........................................................34 .....n ...............10.3 Tier 1 capital ratio..................................................................23 .....n ...............10.8 Output loss during banking crises.........................................31 .....n...............38.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator ....................................32 .....n.................4.9 Manageability of public debt ................................................49 .....n...............73.3 Credit default swap spreads ...................................................6 .....n...............42.5
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
128
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............121.3 Central bank assets to GDP ..................................................38 .....n.................0.2 Financial system deposits to GDP.........................................11 .....n .............103.6 M2 to GDP.............................................................................11 .....n .............125.3 Private credit to GDP.............................................................16 .....n .............102.2 Bank deposits to GDP ...........................................................12 .....n .............103.6 Money market instruments to GDP ......................................11 .....n.................2.7
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................40 .....n.................3.7 Bank overhead costs .............................................................49 .....n.................5.0 Public ownership of banks ....................................................29 .....n .................7.6 Bank operating costs to assets ...............................................3 .....n.................0.9 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................9 .....n...............98.3 Public credit registry coverage ..............................................23 .....n.................0.8
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................8 .....n.................2.4 IPO proceeds amount ...........................................................41 .....n.................0.1 Share of world IPOs ..............................................................15 .....n .................1.8
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................4.6 M&A transaction value to GDP .............................................27 .....n.................4.6 Share of total number of M&A deals ......................................7 .....n.................3.9
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................18 .....n.................3.3 Non–life insurance density .....................................................9 .....n.................3.8 Real growth of direct insurance premiums ...........................35 .....n.................0.0 Life insurance coverage .........................................................11 .....n.................2.7 Non–life insurance coverage ...................................................5 .....n.................3.1 Relative value-added of insurance to GDP ............................46 .....n.................0.6
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................24 .....n .................1.7 Share of total number of securitization deals .........................9 .....n .................1.4
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Germany
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover.............................................10 .....n .................1.9 Outright forward foreign exchange turnover ...........................5 .....n.................5.3 Foreign exchange swap turnover...........................................10 .....n.................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 .....n .................7.3 Interest rate derivatives turnover: Swaps................................4 .....n.................4.1 Interest rate derivatives turnover: Options..............................8 .....n.................0.7 Foreign exchange derivatives turnover: Currency swaps ......19 .....n.................0.5 Foreign exchange derivatives turnover: Options....................11 .....n .................1.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio .....................................................9 .....n .............169.0 Stock market capitalization to GDP .......................................33 .....n...............65.0 Stock market value traded to GDP ........................................18 .....n .............122.7 Number of listed companies per 10,000 people...................24 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............13 .....n ...............37.4 Public domestic bond market capitalization to GDP .............13 .....n...............43.8 Private international bonds to GDP .........................................8 .....n...............79.0 Public international bonds to GDP .........................................11 .....n.................8.8 Local currency corporate bond issuance to GDP ....................7 .....n.................3.0
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
129 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................15 .....n.................6.0 Venture capital availability......................................................34 .....n.................2.8 Ease of access to credit........................................................49 .....n.................2.4 Financing through local equity market ..................................34 .....n.................3.9 Ease of access to loans ........................................................40 .....n.................2.8 Foreign direct investment to GDP.........................................50 .....n.................0.7 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................27 .....n ...............15.9 Total number of ATMs.............................................................8 .....n .............112.2 Total number of point of sale (POS) devices .........................19 .....n.............836.5 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Hong Kong SAR Key indicators
Financial assets by major type, 2008 2.3% 8.6%
Population (millions), 2009 .........................................................7.1
US$ bn
GDP (US$ billions), 2009 .........................................................210.7
n n n n
37.7%
GDP (current prices) per capita, 2009 ............................29,825.5 GDP (PPP) as share (%) of world total, 2009 ........................0.43 Compound annual growth rate of real GDP (%), 2005–09 ..2.51
51.3%
Public debt securities .........29.2 Private debt securities......107.1 Banking deposits ...............638.1 Equity securities ................468.6 Total
1,243.0
Total/GDP 577.8%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index........................................................3 5.0 1
2
3
4
5
6
7
Factors, policies, and institutions
130
1st pillar: Institutional environment .........................................10
5.7
Financial sector liberalization ....................................................24 Corporate governance.................................................................15 Legal and regulatory issues .........................................................5 Contract enforcement....................................................................2
5.9 5.1 5.5 6.2
2nd pillar: Business environment ...............................................3
5.9
Human capital ...............................................................................19 Taxes.................................................................................................2 Infrastructure ..................................................................................1 Cost of doing business ................................................................14
4.8 6.4 6.5 5.9
3rd pillar: Financial stability........................................................2
5.7
Currency stability............................................................................9 Banking system stability................................................................6 Risk of sovereign debt crisis ........................................................3
5.3 5.6 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........................................3
5.3
Size index .........................................................................................6 Efficiency index...............................................................................5 Financial information disclosure................................................23
5.3 6.4 3.2
5th pillar: Non-banking financial services .............................17
3.2
IPO activity.....................................................................................11 M&A activity..................................................................................14 Insurance .......................................................................................15 Securitization.................................................................................30
3.4 3.7 3.4 2.2
6th pillar: Financial markets......................................................11
4.3
Foreign exchange markets ...........................................................6 Derivatives markets .....................................................................12 Equity market development ..........................................................4 Bond market development..........................................................30
4.8 5.1 5.7 2.0 1
Financial access 7th pillar: Financial access..........................................................2
5.1
Commercial access........................................................................1 Retail access ...............................................................................n/a
5.1 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.......33 .....n...............35.3 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ................................3 .....n.................5.1 Efficacy of corporate boards .................................................24 .....n.................4.8 Reliance on professional management .................................24 .....n.................5.0 Willingness to delegate.........................................................26 .....n.................4.1 Strength of auditing and reporting standards .........................7 .....n.................5.9 Ethical behavior of firms........................................................13 .....n.................6.0 Protection of minority shareholders’ interests ......................20 .....n.................4.9
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation ...........................................2 .....n.................5.1 Centralization of economic policymaking ..............................17 .....n.................3.7 Regulation of securities exchanges.........................................9 .....n.................5.4 Property rights.........................................................................4 .....n.................6.3 Intellectual property protection .............................................15 .....n.................5.4 Diversion of public funds.........................................................6 .....n.................6.0 Public trust of politicians........................................................10 .....n.................4.7 Corruption perceptions index ................................................10 .....n.................8.2 Strength of legal rights index ..................................................1 .....n ...............10.0 Central bank transparency....................................................n/a .........................n/a
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................22 .....n.................4.2 Judicial independence ...........................................................13 .....n.................6.1 Irregular payments in judicial decisions...................................6 .....n.................6.5 Time to enforce a contract ......................................................3 .....n.............280.0 Number of procedures to enforce a contract .........................3 .....n...............24.0 Strength of investor protection index......................................2 .....n.................9.0 Cost of enforcing contracts...................................................20 .....n ...............19.5
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools............................................19 .....n.................5.1 Quality of math and science education...................................7 .....n.................5.4 Extent of staff training...........................................................20 .....n.................4.7 Local availability of specialized research and training services .............................................................15 .....n.................5.4 Brain drain and ease of hiring foreign labor ............................5 .....n.................5.1 Tertiary enrollment ................................................................40 .....n...............33.8
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................7 .....n.................6.5 Distortive effect of taxes and subsidies on competition.........2 .....n.................5.7 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes....................................................................6 .....n...............80.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................2 .....n.................6.7 Quality of telephone infrastructure .........................................2 .....n.................6.9 Internet users .......................................................................18 .....n ...............67.0 Broadband Internet subscribers ............................................11 .....n...............28.1 Telephone lines........................................................................3 .....n...............58.7 Mobile telephone subscribers.................................................3 .....n .............165.9
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business....................................................13 .....n .................1.8
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Hong Kong SAR
131
2: Country/Economy Profiles
Hong Kong SAR Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................38 .....n.................5.0 Cost of closing a business ....................................................20 .....n.................9.0 Time to start a business..........................................................7 .....n.................6.0 Time to register property ......................................................39 .....n...............45.0 Time to close a business.......................................................11 .....n .................1.1
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................48 .....n ...............–2.0 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP.............................................7 .....n ...............12.3 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................1 .....n.............353.1
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises....................................................1 .....n.................0.0 Financial strengths indicator....................................................1 .....n.................9.0 Aggregate measure of real estate bubbles...........................42 .....n.................3.0 Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio..................................................................21 .....n................11.1 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................15 .....n ...............19.0 Foreign currency sovereign rating .........................................15 .....n ...............19.0 Aggregate macroprudential indicator.....................................11 .....n.................5.7 Manageability of public debt ................................................19 .....n ...............37.4 Credit default swap spreads ..................................................11 .....n ...............57.9
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
132
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............140.4 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ..........................................1 .....n.............285.2 M2 to GDP ..............................................................................1 .....n.............329.5 Private credit to GDP .............................................................10 .....n .............126.5 Bank deposits to GDP .............................................................1 .....n.............289.1 Money market instruments to GDP ......................................15 .....n .................1.1
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator.............................................14 .....n.................4.8 Bank overhead costs ...............................................................8 .....n .................1.3 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................14 .....n .................1.2 Non-performing bank loans to total loans ...............................5 .....n .................1.5
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage ..............................................18 .....n ...............71.9 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................20 .....n .................1.0 IPO proceeds amount .............................................................6 .....n.................0.8 Share of world IPOs ..............................................................15 .....n .................1.8
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.7 M&A transaction value to GDP ...............................................4 .....n................11.7 Share of total number of M&A deals ....................................16 .....n .................1.4
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density .............................................................4 .....n.................9.6 Non–life insurance density ...................................................42 .....n .................1.4 Real growth of direct insurance premiums ...........................44 .....n ...............–0.1 Life insurance coverage ........................................................24 .....n.................0.7 Non–life insurance coverage .................................................52 .....n.................0.1 Relative value-added of insurance to GDP ..............................2 .....n.................4.5
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................22 .....n .................1.7 Share of total number of securitization deals .......................32 .....n.................0.2
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Hong Kong SAR
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ..............................................7 .....n.................3.0 Outright forward foreign exchange turnover ...........................7 .....n.................3.5 Foreign exchange swap turnover ............................................3 .....n.................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 .....n.................0.2 Interest rate derivatives turnover: Swaps ..............................11 .....n .................1.0 Interest rate derivatives turnover: Options............................17 .....n.................0.2 Foreign exchange derivatives turnover: Currency swaps ......10 .....n .................1.6 Foreign exchange derivatives turnover: Options .....................6 .....n.................2.3
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................22 .....n...............78.9 Stock market capitalization to GDP .........................................1 .....n.............603.5 Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people.....................1 .....n .................1.3
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............27 .....n ...............14.2 Public domestic bond market capitalization to GDP .............33 .....n ...............21.8 Private international bonds to GDP .......................................16 .....n...............34.2 Public international bonds to GDP ........................................41 .....n.................0.8 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
133 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication ...............................................4 .....n.................6.4 Venture capital availability........................................................1 .....n.................4.4 Ease of access to credit........................................................21 .....n.................3.4 Financing through local equity market ....................................1 .....n.................5.2 Ease of access to loans ..........................................................7 .....n.................4.2 Foreign direct investment to GDP...........................................1 .....n...............29.9 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................18 .....n ...............21.2 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Hungary Key indicators
Financial assets by major type, 2008 8.3%
Population (millions), 2009 .......................................................10.0
US$ bn
GDP (US$ billions), 2009 .........................................................129.4 GDP (current prices) per capita, 2009 ............................12,926.5 47.7%
32.9%
GDP (PPP) as share (%) of world total, 2009 ........................0.27 Compound annual growth rate of real GDP (%), 2005–09–0.21
n n n n
Public debt securities .......106.3 Private debt securities........24.6 Banking deposits .................73.2 Equity securities ..................18.6 Total
222.8
11.1%
Total/GDP 143.3%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................45 3.0 1
2
3
4
5
6
7
Factors, policies, and institutions
134
1st pillar: Institutional environment .........................................24
4.6
Financial sector liberalization ....................................................21 Corporate governance.................................................................41 Legal and regulatory issues .......................................................31 Contract enforcement..................................................................27
6.1 4.1 3.6 4.5
2nd pillar: Business environment .............................................25
4.7
Human capital ...............................................................................24 Taxes...............................................................................................35 Infrastructure ................................................................................23 Cost of doing business ................................................................30
4.5 4.5 5.0 5.1
3rd pillar: Financial stability......................................................57
2.9
Currency stability..........................................................................51 Banking system stability..............................................................55 Risk of sovereign debt crisis ......................................................53
2.3 3.3 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......................................55
2.2
Size index .......................................................................................38 Efficiency index.............................................................................56 Financial information disclosure................................................49
2.0 2.9 1.3
5th pillar: Non-banking financial services .............................50
1.5
IPO activity.....................................................................................53 M&A activity..................................................................................33 Insurance .......................................................................................52 Securitization.................................................................................41
1.0 1.9 1.5 1.7
6th pillar: Financial markets......................................................29
2.2
Foreign exchange markets .........................................................33 Derivatives markets .....................................................................30 Equity market development ........................................................35 Bond market development..........................................................15
1.1 1.3 2.2 3.7 1
Financial access 7th pillar: Financial access........................................................37
3.1
Commercial access......................................................................49 Retail access.................................................................................21
2.9 3.2 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n ...............81.3 Domestic financial sector liberalization .................................39 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................36 .....n.................4.1 Efficacy of corporate boards .................................................34 .....n.................4.5 Reliance on professional management .................................39 .....n.................4.3 Willingness to delegate.........................................................54 .....n.................3.0 Strength of auditing and reporting standards .......................20 .....n.................5.4 Ethical behavior of firms........................................................50 .....n.................3.3 Protection of minority shareholders’ interests ......................40 .....n.................4.1
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................55 .....n.................2.2 Centralization of economic policymaking ..............................37 .....n.................2.9 Regulation of securities exchanges.......................................32 .....n.................4.5 Property rights.......................................................................37 .....n.................4.4 Intellectual property protection .............................................31 .....n.................4.0 Diversion of public funds.......................................................46 .....n.................2.7 Public trust of politicians .......................................................53 .....n .................1.8 Corruption perceptions index ................................................24 .....n.................5.1 Strength of legal rights index ................................................19 .....n .................7.0 Central bank transparency.......................................................3 .....n................11.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................46 .....n.................2.9 Judicial independence ...........................................................31 .....n.................4.0 Irregular payments in judicial decisions.................................30 .....n.................4.5 Time to enforce a contract ....................................................15 .....n.............395.0 Number of procedures to enforce a contract .......................24 .....n...............33.0 Strength of investor protection index....................................49 .....n.................4.3 Cost of enforcing contracts.....................................................7 .....n ...............13.0
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................42 .....n.................4.1 Quality of math and science education.................................16 .....n.................4.8 Extent of staff training...........................................................45 .....n.................3.7 Local availability of specialized research and training services .............................................................32 .....n.................4.4 Brain drain and ease of hiring foreign labor ..........................37 .....n.................3.9 Tertiary enrollment.................................................................11 .....n...............69.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................35 .....n.................4.9 Distortive effect of taxes and subsidies on competition.......53 .....n.................3.5 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes..................................................................40 .....n.............330.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................31 .....n.................4.8 Quality of telephone infrastructure........................................17 .....n.................6.6 Internet users .......................................................................22 .....n...............58.7 Broadband Internet subscribers ............................................23 .....n................17.5 Telephone lines......................................................................26 .....n...............30.9 Mobile telephone subscribers ...............................................16 .....n .............122.1
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................35 .....n.................8.0
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Hungary
135
2: Country/Economy Profiles
Hungary Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................55 .....n................11.0 Cost of closing a business ....................................................31 .....n ...............15.0 Time to start a business..........................................................3 .....n.................4.0 Time to register property ......................................................17 .....n................17.0 Time to close a business ......................................................25 .....n.................2.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................38 .....n.................0.1 External vulnerability indicator...............................................33 .....n .............201.4 Current account balance to GDP...........................................47 .....n ...............–4.5 Dollarization vulnerability indicator ........................................30 .....n...............25.2 External debt to GDP (developing economies) .....................34 .....n .............139.4 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................53 .....n.................3.3 Financial strengths indicator..................................................32 .....n.................4.0 Aggregate measure of real estate bubbles.............................6 .....n.................6.6 Financial Stress Index ...........................................................36 .....n ...............12.8 Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises.........................................45 .....n...............84.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................41 .....n................11.0 Foreign currency sovereign rating .........................................36 .....n................11.0 Aggregate macroprudential indicator ....................................52 .....n.................3.4 Manageability of public debt ................................................48 .....n ...............71.8 Credit default swap spreads .................................................47 .....n.............332.5
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
136
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............79.7 Central bank assets to GDP ..................................................32 .....n.................0.6 Financial system deposits to GDP ........................................39 .....n ...............47.2 M2 to GDP ............................................................................39 .....n...............55.2 Private credit to GDP.............................................................32 .....n...............64.2 Bank deposits to GDP ...........................................................40 .....n ...............47.1 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................54 .....n.................2.4 Bank overhead costs .............................................................56 .....n ...............16.6 Public ownership of banks ....................................................25 .....n.................3.9 Bank operating costs to assets .............................................56 .....n.................5.9 Non-performing bank loans to total loans .............................31 .....n.................5.9
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................41 .....n ...............10.3 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................52 .....n.................0.0 IPO proceeds amount ...........................................................52 .....n.................0.0 Share of world IPOs ..............................................................53 .....n.................0.0
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.2 M&A transaction value to GDP .............................................23 .....n.................4.9 Share of total number of M&A deals ....................................41 .....n.................0.2
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................32 .....n .................1.6 Non–life insurance density ...................................................40 .....n .................1.5 Real growth of direct insurance premiums ...........................46 .....n ...............–0.1 Life insurance coverage ........................................................41 .....n.................0.2 Non–life insurance coverage .................................................46 .....n.................0.2 Relative value-added of insurance to GDP ............................49 .....n.................0.5
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................35 .....n .................1.1 Share of total number of securitization deals .......................40 .....n.................0.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Hungary
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................30 .....n.................0.2 Outright forward foreign exchange turnover .........................38 .....n.................0.0 Foreign exchange swap turnover ..........................................28 .....n.................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 .....n.................0.2 Interest rate derivatives turnover: Swaps..............................27 .....n.................0.0 Interest rate derivatives turnover: Options...........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ......37 .....n.................0.0 Foreign exchange derivatives turnover: Options ...................25 .....n.................0.1
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................15 .....n .............136.7 Stock market capitalization to GDP .......................................45 .....n ...............31.9 Stock market value traded to GDP........................................27 .....n...............44.2 Number of listed companies per 10,000 people...................34 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............29 .....n.................8.0 Public domestic bond market capitalization to GDP ...............7 .....n...............54.9 Private international bonds to GDP .......................................25 .....n................11.7 Public international bonds to GDP ..........................................6 .....n ...............19.4 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
137 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................36 .....n.................4.6 Venture capital availability......................................................53 .....n.................2.2 Ease of access to credit........................................................53 .....n.................2.0 Financing through local equity market ..................................54 .....n.................2.6 Ease of access to loans ........................................................47 .....n.................2.5 Foreign direct investment to GDP .........................................19 .....n.................5.0 Retail access Market penetration of bank accounts .....................................9 .....n ......205,827.1 Commercial bank branches ...................................................23 .....n...............18.3 Total number of ATMs...........................................................22 .....n...............55.6 Total number of point of sale (POS) devices.........................20 .....n .............831.3 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
India Key indicators
Financial assets by major type, 2008
Population (millions), 2009 ..................................................1,199.1
US$ bn
29.7%
GDP (US$ billions), 2009 ......................................................1,236.0
30.5%
GDP (current prices) per capita, 2009 ..............................1,030.8 GDP (PPP) as share (%) of world total, 2009 ........................5.06 Compound annual growth rate of real GDP (%), 2005–09 ..6.38
5.3%
n n n n
Public debt securities .......663.0 Private debt securities......115.1 Banking deposits ...............748.6 Equity securities ................645.5 Total
2,172.2
34.5%
Total/GDP 180.0%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................37 3.2 1
2
3
4
5
6
7
Factors, policies, and institutions
138
1st pillar: Institutional environment .........................................51
3.2
Financial sector liberalization ....................................................54 Corporate governance.................................................................31 Legal and regulatory issues .......................................................34 Contract enforcement..................................................................52
1.7 4.4 3.5 3.3
2nd pillar: Business environment .............................................52
3.3
Human capital ...............................................................................39 Taxes...............................................................................................49 Infrastructure ................................................................................56 Cost of doing business ................................................................52
3.9 3.9 2.3 3.3
3rd pillar: Financial stability......................................................45
4.0
Currency stability..........................................................................15 Banking system stability..............................................................49 Risk of sovereign debt crisis ......................................................44
4.9 3.5 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......................................41
3.1
Size index .......................................................................................33 Efficiency index.............................................................................37 Financial information disclosure................................................50
2.4 4.6 1.3
5th pillar: Non-banking financial services .............................13
3.5
IPO activity.......................................................................................4 M&A activity..................................................................................21 Insurance .........................................................................................8 Securitization.................................................................................24
4.6 2.8 4.1 2.6
6th pillar: Financial markets......................................................24
2.8
Foreign exchange markets .........................................................13 Derivatives markets .....................................................................13 Equity market development ........................................................26 Bond market development..........................................................35
2.0 4.9 2.8 1.9 1
Financial access 7th pillar: Financial access........................................................49
2.7
Commercial access......................................................................19 Retail access.................................................................................43
3.8 1.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................49 .....n ...............–1.1 Commitments to WTO agreement on trade in services.......49 .....n.................6.2 Domestic financial sector liberalization .................................48 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................40 .....n.................4.1 Efficacy of corporate boards .................................................37 .....n.................4.5 Reliance on professional management .................................29 .....n.................4.7 Willingness to delegate.........................................................34 .....n.................3.9 Strength of auditing and reporting standards .......................27 .....n.................5.1 Ethical behavior of firms........................................................36 .....n.................3.9 Protection of minority shareholders’ interests ......................30 .....n.................4.5
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................35 .....n.................3.0 Centralization of economic policymaking ..............................22 .....n.................3.6 Regulation of securities exchanges .......................................12 .....n.................5.3 Property rights.......................................................................34 .....n.................4.5 Intellectual property protection .............................................38 .....n.................3.6 Diversion of public funds.......................................................35 .....n.................3.2 Public trust of politicians .......................................................39 .....n.................2.3 Corruption perceptions index ................................................41 .....n.................3.4 Strength of legal rights index ................................................12 .....n.................8.0 Central bank transparency.....................................................46 .....n.................2.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................21 .....n.................4.3 Judicial independence ...........................................................25 .....n.................4.8 Irregular payments in judicial decisions.................................31 .....n.................4.5 Time to enforce a contract ....................................................56 .....n..........1,420.0 Number of procedures to enforce a contract .......................53 .....n...............46.0 Strength of investor protection index....................................21 .....n.................6.0 Cost of enforcing contracts...................................................51 .....n...............39.6
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools............................................18 .....n.................5.1 Quality of math and science education.................................21 .....n.................4.7 Extent of staff training...........................................................35 .....n.................4.1 Local availability of specialized research and training services .............................................................36 .....n.................4.4 Brain drain and ease of hiring foreign labor ..........................29 .....n.................3.9 Tertiary enrollment ................................................................52 .....n ...............13.5
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................45 .....n.................3.9 Distortive effect of taxes and subsidies on competition.......37 .....n.................4.0 Marginal tax variation ............................................................36 .....n ...............15.8 Time to pay taxes..................................................................35 .....n .............271.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................45 .....n.................3.6 Quality of telephone infrastructure .......................................31 .....n.................6.3 Internet users .......................................................................56 .....n.................4.4 Broadband Internet subscribers ............................................53 .....n.................0.5 Telephone lines......................................................................54 .....n.................3.2 Mobile telephone subscribers...............................................56 .....n...............29.4
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................56 .....n...............66.1
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
India
139
2: Country/Economy Profiles
India Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................50 .....n .................7.4 Cost of closing a business ....................................................20 .....n.................9.0 Time to start a business........................................................42 .....n...............30.0 Time to register property ......................................................38 .....n...............44.0 Time to close a business ......................................................57 .....n .................7.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................40 .....n ...............–0.4 External vulnerability indicator...............................................15 .....n...............40.1 Current account balance to GDP...........................................36 .....n ...............–1.8 Dollarization vulnerability indicator ........................................27 .....n.................4.3 External debt to GDP (developing economies) .......................4 .....n ...............19.7 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................20 .....n .................1.3 Financial strengths indicator..................................................32 .....n.................4.0 Aggregate measure of real estate bubbles...........................43 .....n .................1.2 Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio..................................................................40 .....n.................6.8 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................41 .....n................11.0 Foreign currency sovereign rating .........................................36 .....n................11.0 Aggregate macroprudential indicator.....................................13 .....n.................5.6 Manageability of public debt ................................................43 .....n...............62.1 Credit default swap spreads.................................................n/a .........................n/a
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
140
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............65.0 Central bank assets to GDP ..................................................17 .....n.................2.1 Financial system deposits to GDP ........................................27 .....n...............63.3 M2 to GDP ............................................................................22 .....n ...............87.7 Private credit to GDP.............................................................36 .....n ...............47.9 Bank deposits to GDP ...........................................................30 .....n...............63.2 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................23 .....n.................4.5 Bank overhead costs .............................................................16 .....n .................1.6 Public ownership of banks ....................................................56 .....n ...............67.3 Bank operating costs to assets .............................................37 .....n.................2.6 Non-performing bank loans to total loans .............................12 .....n.................2.4
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................42 .....n ...............10.2 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................6 .....n.................3.9 IPO proceeds amount .............................................................9 .....n.................0.5 Share of world IPOs ................................................................7 .....n.................5.5
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n .................1.2 M&A transaction value to GDP .............................................34 .....n.................3.5 Share of total number of M&A deals ....................................11 .....n.................3.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................15 .....n.................4.6 Non–life insurance density ...................................................50 .....n.................0.6 Real growth of direct insurance premiums ...........................29 .....n.................0.0 Life insurance coverage ..........................................................1 .....n...............55.4 Non–life insurance coverage ...................................................3 .....n .................7.7 Relative value-added of insurance to GDP ............................32 .....n.................0.9
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................44 .....n.................0.6 Share of total number of securitization deals........................10 .....n .................1.4
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
India
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover.............................................14 .....n .................1.1 Outright forward foreign exchange turnover .........................12 .....n .................1.5 Foreign exchange swap turnover...........................................18 .....n.................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 .....n.................0.2 Interest rate derivatives turnover: Options...........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ......12 .....n .................1.3 Foreign exchange derivatives turnover: Options .....................9 .....n .................1.5
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................34 .....n...............45.8 Stock market capitalization to GDP .........................................7 .....n .............173.2 Stock market value traded to GDP ........................................17 .....n..............127.4 Number of listed companies per 10,000 people...................32 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............31 .....n.................4.5 Public domestic bond market capitalization to GDP .............18 .....n ...............37.0 Private international bonds to GDP .......................................38 .....n.................3.4 Public international bonds to GDP ........................................51 .....n.................0.0 Local currency corporate bond issuance to GDP ..................25 .....n.................0.7
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
141 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................26 .....n.................5.2 Venture capital availability......................................................22 .....n.................3.2 Ease of access to credit ........................................................16 .....n.................3.6 Financing through local equity market ....................................7 .....n.................4.7 Ease of access to loans ........................................................24 .....n.................3.3 Foreign direct investment to GDP.........................................34 .....n.................3.4 Retail access Market penetration of bank accounts ...................................30 .....n ........74,729.3 Commercial bank branches ...................................................39 .....n ...............10.1 Total number of ATMs...........................................................45 .....n .................7.3 Total number of point of sale (POS) devices.........................32 .....n ...............67.1 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................13 .....n.................4.8
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Indonesia Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .....................................................231.5
US$ bn
23.2%
GDP (US$ billions), 2009 .........................................................539.4
34.1%
GDP (current prices) per capita, 2009 ..............................2,329.4 GDP (PPP) as share (%) of world total, 2009 ........................1.38 Compound annual growth rate of real GDP (%), 2005–09 ..4.45
n n n n
Public debt securities .......144.8 Private debt securities........26.7 Banking deposits ...............154.7 Equity securities ..................98.8 Total
6.3%
424.9
36.4%
Total/GDP 83.1%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................51 2.9 1
2
3
4
5
6
7
Factors, policies, and institutions
142
1st pillar: Institutional environment .........................................46
3.5
Financial sector liberalization ....................................................48 Corporate governance.................................................................32 Legal and regulatory issues .......................................................33 Contract enforcement..................................................................46
2.8 4.3 3.6 3.5
2nd pillar: Business environment .............................................54
3.2
Human capital ...............................................................................38 Taxes...............................................................................................51 Infrastructure ................................................................................55 Cost of doing business ................................................................55
4.0 3.7 2.5 2.7
3rd pillar: Financial stability......................................................36
4.4
Currency stability............................................................................6 Banking system stability..............................................................48 Risk of sovereign debt crisis ......................................................39
5.5 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......................................51
2.6
Size index .......................................................................................43 Efficiency index.............................................................................49 Financial information disclosure................................................35
1.6 3.9 2.1
5th pillar: Non-banking financial services .............................36
2.1
IPO activity.....................................................................................19 M&A activity..................................................................................38 Insurance .......................................................................................48 Securitization.................................................................................28
2.3 1.6 1.9 2.4
6th pillar: Financial markets......................................................52
1.4
Foreign exchange markets .........................................................38 Derivatives markets .....................................................................32 Equity market development ........................................................37 Bond market development..........................................................45
1.1 1.3 2.0 1.3 1
Financial access 7th pillar: Financial access........................................................39
3.0
Commercial access......................................................................15 Retail access.................................................................................36
3.9 2.2 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................39 .....n .................1.2 Commitments to WTO agreement on trade in services.......45 .....n...............29.8 Domestic financial sector liberalization .................................52 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................26 .....n.................4.4 Efficacy of corporate boards .................................................26 .....n.................4.7 Reliance on professional management .................................34 .....n.................4.5 Willingness to delegate.........................................................25 .....n.................4.1 Strength of auditing and reporting standards .......................43 .....n.................4.6 Ethical behavior of firms........................................................48 .....n.................3.5 Protection of minority shareholders’ interests ......................29 .....n.................4.6
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................12 .....n.................3.7 Centralization of economic policymaking ................................7 .....n.................4.4 Regulation of securities exchanges.......................................31 .....n.................4.6 Property rights.......................................................................44 .....n.................4.0 Intellectual property protection .............................................34 .....n.................3.8 Diversion of public funds.......................................................31 .....n.................3.5 Public trust of politicians .......................................................27 .....n.................3.3 Corruption perceptions index ................................................47 .....n.................2.8 Strength of legal rights index ................................................50 .....n.................3.0 Central bank transparency.....................................................25 .....n.................8.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................32 .....n.................3.6 Judicial independence ...........................................................38 .....n.................3.8 Irregular payments in judicial decisions.................................42 .....n.................3.4 Time to enforce a contract ....................................................37 .....n.............570.0 Number of procedures to enforce a contract .......................43 .....n...............39.0 Strength of investor protection index....................................21 .....n.................6.0 Cost of enforcing contracts...................................................57 .....n .............122.7
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................32 .....n.................4.4 Quality of math and science education.................................27 .....n.................4.5 Extent of staff training...........................................................26 .....n.................4.4 Local availability of specialized research and training services .............................................................37 .....n.................4.4 Brain drain and ease of hiring foreign labor...........................19 .....n.................4.5 Tertiary enrollment ................................................................50 .....n................17.5
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................51 .....n.................3.4 Distortive effect of taxes and subsidies on competition.......26 .....n.................4.2 Marginal tax variation ............................................................38 .....n................17.4 Time to pay taxes..................................................................34 .....n.............266.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................44 .....n.................3.7 Quality of telephone infrastructure .......................................54 .....n.................5.0 Internet users .......................................................................54 .....n .................7.9 Broadband Internet subscribers ............................................54 .....n.................0.2 Telephone lines......................................................................47 .....n ...............13.4 Mobile telephone subscribers...............................................51 .....n ...............61.8
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................52 .....n...............26.0
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Indonesia
143
2: Country/Economy Profiles
Indonesia Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................54 .....n ...............10.7 Cost of closing a business ....................................................39 .....n...............18.0 Time to start a business........................................................55 .....n...............60.0 Time to register property ......................................................23 .....n...............22.0 Time to close a business ......................................................54 .....n.................5.5
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .......................2 .....n................11.6 External vulnerability indicator...............................................18 .....n...............54.3 Current account balance to GDP...........................................28 .....n .................1.5 Dollarization vulnerability indicator ........................................29 .....n ...............15.1 External debt to GDP (developing economies) .....................16 .....n...............32.4 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................27 .....n .................1.5 Financial strengths indicator..................................................41 .....n.................3.0 Aggregate measure of real estate bubbles ...........................14 .....n.................5.8 Financial Stress Index............................................................18 .....n.................4.2 Tier 1 capital ratio..................................................................41 .....n.................6.8 Output loss during banking crises.........................................51 .....n .............103.5
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................47 .....n ...............10.0 Foreign currency sovereign rating .........................................46 .....n.................9.3 Aggregate macroprudential indicator ....................................22 .....n.................5.3 Manageability of public debt ................................................14 .....n ...............27.4 Credit default swap spreads .................................................38 .....n .............179.7
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
144
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............30.2 Central bank assets to GDP ....................................................6 .....n.................6.3 Financial system deposits to GDP ........................................44 .....n...............33.6 M2 to GDP ............................................................................50 .....n...............38.1 Private credit to GDP.............................................................51 .....n...............22.8 Bank deposits to GDP ...........................................................46 .....n...............33.7 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................39 .....n.................3.8 Bank overhead costs .............................................................34 .....n.................2.9 Public ownership of banks ....................................................52 .....n...............56.5 Bank operating costs to assets .............................................48 .....n.................3.7 Non-performing bank loans to total loans .............................19 .....n.................3.8
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................49 .....n.................0.0 Public credit registry coverage ..............................................10 .....n...............22.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................18 .....n .................1.1 IPO proceeds amount ...........................................................20 .....n.................0.3 Share of world IPOs ..............................................................19 .....n .................1.5
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.4 M&A transaction value to GDP .............................................39 .....n.................2.7 Share of total number of M&A deals ....................................28 .....n.................0.6
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................36 .....n.................0.9 Non–life insurance density ...................................................54 .....n.................0.4 Real growth of direct insurance premiums ...........................43 .....n.................0.0 Life insurance coverage.........................................................12 .....n.................2.2 Non–life insurance coverage .................................................20 .....n .................1.0 Relative value-added of insurance to GDP ............................26 .....n .................1.1
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................31 .....n .................1.2 Share of total number of securitization deals .......................18 .....n.................0.7
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Indonesia
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................32 .....n.................0.1 Outright forward foreign exchange turnover .........................30 .....n.................0.1 Foreign exchange swap turnover ..........................................39 .....n.................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 .....n.................0.0 Interest rate derivatives turnover: Swaps..............................33 .....n.................0.0 Interest rate derivatives turnover: Options............................29 .....n.................0.0 Foreign exchange derivatives turnover: Currency swaps ......22 .....n.................0.3 Foreign exchange derivatives turnover: Options ...................28 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................20 .....n...............82.5 Stock market capitalization to GDP .......................................37 .....n...............55.3 Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people...................44 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............34 .....n .................1.6 Public domestic bond market capitalization to GDP .............37 .....n ...............14.7 Private international bonds to GDP .......................................42 .....n.................2.8 Public international bonds to GDP ........................................30 .....n.................2.6 Local currency corporate bond issuance to GDP ..................36 .....n.................0.1
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
145 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................38 .....n.................4.6 Venture capital availability........................................................7 .....n.................3.9 Ease of access to credit..........................................................1 .....n.................4.3 Financing through local equity market ..................................10 .....n.................4.6 Ease of access to loans.........................................................10 .....n.................4.0 Foreign direct investment to GDP.........................................45 .....n .................1.5 Retail access Market penetration of bank accounts ...................................32 .....n ........50,474.1 Commercial bank branches ...................................................43 .....n .................7.7 Total number of ATMs...........................................................43 .....n ...............14.4 Total number of point of sale (POS) devices.........................30 .....n ..............117.9 Microfinance institution (MFI) borrowers’ penetration rate .......................................................................5 .....n ...............19.7
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Ireland Key indicators
Financial assets by major type, 2008 5.0%
11.9%
Population (millions), 2009 .........................................................4.4
US$ bn
GDP (US$ billions), 2009 .........................................................227.8
n n n n
25.0%
GDP (current prices) per capita, 2009 ............................51,356.3 GDP (PPP) as share (%) of world total, 2009 ........................0.25 Compound annual growth rate of real GDP (%), 2005–09 ..0.12
Public debt securities .......117.8 Private debt securities......575.6 Banking deposits ...............247.8 Equity securities ..................49.4 Total
990.5
58.1%
Total/GDP 370.2%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................18 4.2 1
2
3
4
5
6
7
Factors, policies, and institutions
146
1st pillar: Institutional environment .........................................15
5.5
Financial sector liberalization ......................................................1 Corporate governance.................................................................25 Legal and regulatory issues .......................................................17 Contract enforcement....................................................................6
7.0 4.8 4.6 5.8
2nd pillar: Business environment .............................................18
5.4
Human capital ...............................................................................14 Taxes...............................................................................................13 Infrastructure ................................................................................21 Cost of doing business ................................................................17
5.0 5.5 5.2 5.7
3rd pillar: Financial stability......................................................53
3.6
Currency stability..........................................................................40 Banking system stability..............................................................56 Risk of sovereign debt crisis ......................................................36
3.3 3.0 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........................................6
5.1
Size index .........................................................................................2 Efficiency index.............................................................................33 Financial information disclosure..................................................3
5.9 4.8 4.0
5th pillar: Non-banking financial services .............................16
3.2
IPO activity.....................................................................................27 M&A activity..................................................................................28 Insurance .........................................................................................6 Securitization...................................................................................9
2.0 2.0 4.4 4.3
6th pillar: Financial markets......................................................23
2.8
Foreign exchange markets .........................................................24 Derivatives markets .....................................................................19 Equity market development ........................................................33 Bond market development............................................................8
1.2 2.6 2.2 4.7 1
Financial access 7th pillar: Financial access........................................................16
3.8
Commercial access......................................................................55 Retail access...................................................................................7
2.4 5.2 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n ...............71.3 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................12 .....n.................4.6 Efficacy of corporate boards .................................................41 .....n.................4.4 Reliance on professional management..................................11 .....n.................5.8 Willingness to delegate .........................................................19 .....n.................4.3 Strength of auditing and reporting standards .......................40 .....n.................4.7 Ethical behavior of firms........................................................20 .....n.................5.3 Protection of minority shareholders’ interests ......................31 .....n.................4.5
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................31 .....n.................3.1 Centralization of economic policymaking ..............................55 .....n .................1.8 Regulation of securities exchanges.......................................46 .....n.................3.8 Property rights .......................................................................11 .....n.................5.9 Intellectual property protection .............................................12 .....n.................5.6 Diversion of public funds.......................................................14 .....n.................5.3 Public trust of politicians .......................................................32 .....n.................3.0 Corruption perceptions index.................................................11 .....n.................8.0 Strength of legal rights index ................................................12 .....n.................8.0 Central bank transparency.......................................................3 .....n................11.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................24 .....n.................4.0 Judicial independence .............................................................8 .....n.................6.2 Irregular payments in judicial decisions.................................12 .....n.................6.4 Time to enforce a contract ....................................................32 .....n .............515.0 Number of procedures to enforce a contract .........................1 .....n...............20.0 Strength of investor protection index......................................4 .....n.................8.3 Cost of enforcing contracts...................................................36 .....n...............26.9
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................20 .....n.................5.0 Quality of math and science education.................................19 .....n.................4.7 Extent of staff training ...........................................................17 .....n.................4.7 Local availability of specialized research and training services .............................................................21 .....n.................5.0 Brain drain and ease of hiring foreign labor ............................6 .....n.................5.0 Tertiary enrollment.................................................................18 .....n ...............61.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................16 .....n.................6.1 Distortive effect of taxes and subsidies on competition .......16 .....n.................4.6 Marginal tax variation ............................................................22 .....n.................0.4 Time to pay taxes....................................................................4 .....n ...............76.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................36 .....n.................4.2 Quality of telephone infrastructure .......................................40 .....n.................6.1 Internet users .......................................................................21 .....n...............62.5 Broadband Internet subscribers ............................................21 .....n...............20.1 Telephone lines........................................................................8 .....n...............49.7 Mobile telephone subscribers ...............................................18 .....n .............120.7
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business .....................................................2 .....n.................0.3
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Ireland
147
2: Country/Economy Profiles
Ireland Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................46 .....n.................6.7 Cost of closing a business ....................................................20 .....n.................9.0 Time to start a business........................................................21 .....n ...............13.0 Time to register property ......................................................32 .....n...............38.0 Time to close a business ........................................................1 .....n.................0.4
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................22 .....n .................1.9 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................46 .....n ...............–4.5 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................16 .....n .............–64.9
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................35 .....n.................2.0 Financial strengths indicator..................................................48 .....n.................2.0 Aggregate measure of real estate bubbles.............................1 .....n.................6.8 Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio..................................................................37 .....n .................7.2 Output loss during banking crises.........................................57 .....n.............220.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................17 .....n...............18.0 Foreign currency sovereign rating .........................................17 .....n................17.7 Aggregate macroprudential indicator ....................................47 .....n.................3.9 Manageability of public debt ................................................45 .....n...............63.3 Credit default swap spreads .................................................45 .....n.............254.2
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
148
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n.............208.3 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................14 .....n...............96.9 M2 to GDP ............................................................................13 .....n .............121.1 Private credit to GDP...............................................................3 .....n.............205.8 Bank deposits to GDP ...........................................................15 .....n...............96.1 Money market instruments to GDP ........................................1 .....n...............43.6
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................45 .....n.................3.4 Bank overhead costs .............................................................23 .....n.................2.1 Public ownership of banks ....................................................46 .....n...............28.2 Bank operating costs to assets ...............................................1 .....n.................0.6 Non-performing bank loans to total loans .............................36 .....n .................7.5
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....n .............100.0 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................29 .....n.................0.6 IPO proceeds amount ...........................................................17 .....n.................0.4 Share of world IPOs ..............................................................38 .....n.................0.3
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.4 M&A transaction value to GDP .............................................21 .....n.................5.1 Share of total number of M&A deals ....................................32 .....n.................0.4
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density .............................................................1 .....n ...............15.6 Non–life insurance density .....................................................7 .....n.................4.0 Real growth of direct insurance premiums ..........................n/a .........................n/a Life insurance coverage ........................................................23 .....n.................0.7 Non–life insurance coverage .................................................45 .....n.................0.2 Relative value-added of insurance to GDP ..............................6 .....n.................2.9
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ..............................................................4 .....n.................4.5 Share of total number of securitization deals .......................22 .....n.................0.4
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Ireland
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................23 .....n.................0.3 Outright forward foreign exchange turnover .........................25 .....n.................0.2 Foreign exchange swap turnover ..........................................26 .....n.................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 .....n.................0.0 Interest rate derivatives turnover: Swaps..............................15 .....n.................0.4 Interest rate derivatives turnover: Options............................23 .....n.................0.1 Foreign exchange derivatives turnover: Currency swaps ......14 .....n .................1.0 Foreign exchange derivatives turnover: Options ...................20 .....n.................0.2
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ..................................................n/a .........................n/a Stock market capitalization to GDP .......................................35 .....n...............58.2 Stock market value traded to GDP........................................21 .....n...............82.9 Number of listed companies per 10,000 people ..................n/a .........................n/a
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............19 .....n...............22.4 Public domestic bond market capitalization to GDP .............16 .....n...............39.5 Private international bonds to GDP .........................................1 .....n .............215.3 Public international bonds to GDP ..........................................4 .....n...............25.6 Local currency corporate bond issuance to GDP ..................22 .....n.................0.9
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
149 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................30 .....n.................5.0 Venture capital availability......................................................46 .....n.................2.3 Ease of access to credit........................................................56 .....n .................1.5 Financing through local equity market ..................................50 .....n.................2.8 Ease of access to loans ........................................................52 .....n.................2.1 Foreign direct investment to GDP.........................................57 .....n ...............–8.8 Retail access Market penetration of bank accounts .....................................7 .....n ......218,184.5 Commercial bank branches .....................................................1 .....n ...............57.3 Total number of ATMs ...........................................................14 .....n...............95.7 Total number of point of sale (POS) devices .........................10 .....n..........2,258.0 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Israel Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .........................................................7.3
US$ bn
28.5%
GDP (US$ billions), 2009 .........................................................194.8
32.3%
GDP (current prices) per capita, 2009 ............................26,796.7 GDP (PPP) as share (%) of world total, 2009 ........................0.30 Compound annual growth rate of real GDP (%), 2005–09 ..3.02
2.3%
n n n n
Public debt securities .......152.3 Private debt securities........10.7 Banking deposits ...............174.5 Equity securities ................134.5 Total
472.0
37.0%
Total/GDP 233.5%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................27 3.9 1
2
3
4
5
6
7
Factors, policies, and institutions
150
1st pillar: Institutional environment .........................................19
5.1
Financial sector liberalization ....................................................25 Corporate governance.................................................................22 Legal and regulatory issues .......................................................19 Contract enforcement..................................................................18
5.9 4.9 4.5 5.2
2nd pillar: Business environment .............................................33
4.4
Human capital ...............................................................................25 Taxes...............................................................................................39 Infrastructure ................................................................................16 Cost of doing business ................................................................51
4.5 4.4 5.4 3.5
3rd pillar: Financial stability......................................................32
4.5
Currency stability..........................................................................25 Banking system stability..............................................................33 Risk of sovereign debt crisis ......................................................30
4.2 4.3 5.0 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......................................21
4.1
Size index .......................................................................................27 Efficiency index.............................................................................19 Financial information disclosure................................................16
2.9 5.6 3.7
5th pillar: Non-banking financial services .............................31
2.2
IPO activity.....................................................................................14 M&A activity..................................................................................37 Insurance .......................................................................................20 Securitization.................................................................................55
3.2 1.6 3.1 1.0
6th pillar: Financial markets......................................................22
2.8
Foreign exchange markets .........................................................25 Derivatives markets....................................................................n/a Equity market development ........................................................13 Bond market development ........................................................n/a
1.2 n/a 3.9 n/a 1
Financial access 7th pillar: Financial access........................................................17
3.7
Commercial access......................................................................16 Retail access.................................................................................14
3.8 3.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.......34 .....n...............28.6 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................25 .....n.................4.4 Efficacy of corporate boards .................................................30 .....n.................4.6 Reliance on professional management .................................18 .....n.................5.3 Willingness to delegate.........................................................22 .....n.................4.2 Strength of auditing and reporting standards........................19 .....n.................5.5 Ethical behavior of firms........................................................19 .....n.................5.3 Protection of minority shareholders’ interests ......................15 .....n.................5.0
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................29 .....n.................3.1 Centralization of economic policymaking ..............................19 .....n.................3.7 Regulation of securities exchanges.......................................21 .....n.................5.0 Property rights.......................................................................29 .....n.................4.7 Intellectual property protection .............................................26 .....n.................4.2 Diversion of public funds.......................................................16 .....n.................5.3 Public trust of politicians .......................................................21 .....n.................3.7 Corruption perceptions index ................................................21 .....n.................6.1 Strength of legal rights index ..................................................4 .....n.................9.0 Central bank transparency.....................................................18 .....n.................9.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................20 .....n.................4.3 Judicial independence ...........................................................12 .....n.................6.2 Irregular payments in judicial decisions.................................10 .....n.................6.4 Time to enforce a contract ....................................................51 .....n.............890.0 Number of procedures to enforce a contract .......................30 .....n...............35.0 Strength of investor protection index......................................4 .....n.................8.3 Cost of enforcing contracts...................................................31 .....n...............25.3
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................28 .....n.................4.6 Quality of math and science education.................................43 .....n.................3.5 Extent of staff training...........................................................18 .....n.................4.7 Local availability of specialized research and training services .............................................................24 .....n.................4.9 Brain drain and ease of hiring foreign labor ..........................40 .....n.................3.8 Tertiary enrollment.................................................................19 .....n...............60.4
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................21 .....n.................6.0 Distortive effect of taxes and subsidies on competition.......22 .....n.................4.4 Marginal tax variation ............................................................41 .....n...............20.7 Time to pay taxes..................................................................29 .....n.............230.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................30 .....n.................4.9 Quality of telephone infrastructure .........................................3 .....n.................6.9 Internet users .......................................................................27 .....n...............49.6 Broadband Internet subscribers ............................................15 .....n...............23.9 Telephone lines......................................................................10 .....n...............45.7 Mobile telephone subscribers ...............................................12 .....n..............127.4
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business....................................................19 .....n.................4.2
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Israel
151
2: Country/Economy Profiles
Israel Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................38 .....n.................5.0 Cost of closing a business ....................................................52 .....n...............23.0 Time to start a business........................................................47 .....n...............34.0 Time to register property ......................................................54 .....n .............144.0 Time to close a business ......................................................43 .....n.................4.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................14 .....n.................2.8 External vulnerability indicator...............................................21 .....n...............68.6 Current account balance to GDP...........................................23 .....n.................2.4 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................26 .....n...............46.6 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises ..................................................11 .....n.................0.5 Financial strengths indicator..................................................22 .....n.................5.0 Aggregate measure of real estate bubbles...........................22 .....n.................5.2 Financial Stress Index ...........................................................27 .....n.................6.1 Tier 1 capital ratio..................................................................43 .....n.................6.4 Output loss during banking crises.........................................32 .....n...............38.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................21 .....n................17.0 Foreign currency sovereign rating .........................................26 .....n ...............15.0 Aggregate macroprudential indicator ....................................24 .....n.................5.3 Manageability of public debt ................................................51 .....n...............78.4 Credit default swap spreads .................................................23 .....n .............119.7
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
152
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............95.5 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................16 .....n...............86.9 M2 to GDP ............................................................................41 .....n...............53.7 Private credit to GDP.............................................................25 .....n...............86.6 Bank deposits to GDP ...........................................................17 .....n...............86.9 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................29 .....n.................4.4 Bank overhead costs .............................................................26 .....n.................2.2 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................47 .....n.................3.3 Non-performing bank loans to total loans ...............................5 .....n .................1.5
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage ..............................................11 .....n...............89.8 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................26 .....n.................0.8 IPO proceeds amount .............................................................8 .....n.................0.7 Share of world IPOs ..............................................................14 .....n.................2.0
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.2 M&A transaction value to GDP .............................................32 .....n.................3.7 Share of total number of M&A deals ....................................36 .....n.................0.3
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................26 .....n.................2.5 Non–life insurance density ...................................................20 .....n.................2.5 Real growth of direct insurance premiums ...........................21 .....n.................0.0 Life insurance coverage ........................................................39 .....n.................0.2 Non–life insurance coverage .................................................43 .....n.................0.2 Relative value-added of insurance to GDP ..............................7 .....n.................2.8
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................54 .....n.................0.1 Share of total number of securitization deals .......................52 .....n.................0.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Israel
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................24 .....n.................0.3 Outright forward foreign exchange turnover ........................n/a .........................n/a Foreign exchange swap turnover ..........................................27 .....n.................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 .....n.................0.2
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................37 .....n...............44.5 Stock market capitalization to GDP .......................................10 .....n..............157.8 Stock market value traded to GDP........................................22 .....n...............79.5 Number of listed companies per 10,000 people.....................5 .....n .................1.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................32 .....n.................5.6 Public international bonds to GDP ........................................24 .....n.................4.3 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
153 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................19 .....n.................5.8 Venture capital availability........................................................8 .....n.................3.9 Ease of access to credit........................................................29 .....n.................3.1 Financing through local equity market ..................................26 .....n.................4.0 Ease of access to loans ........................................................35 .....n.................2.9 Foreign direct investment to GDP.........................................20 .....n.................4.9 Retail access Market penetration of bank accounts ...................................22 .....n ......105,570.8 Commercial bank branches ...................................................21 .....n ...............19.8 Total number of ATMs ...........................................................11 .....n .............104.3 Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Italy Key indicators
Financial assets by major type, 2008 7.0%
Population (millions), 2009 .......................................................59.8
US$ bn
GDP (US$ billions), 2009 ......................................................2,118.3
21.0%
33.1%
GDP (current prices) per capita, 2009 ............................35,435.1 GDP (PPP) as share (%) of world total, 2009 ........................2.51 Compound annual growth rate of real GDP (%), 2005–09–0.60
n n n n
Public debt securities ....2,448.5 Private debt securities...2,872.7 Banking deposits ............1,550.9 Equity securities ................520.9 Total
7,392.9
38.9%
Total/GDP 320.4%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................25 4.0 1
2
3
4
5
6
7
Factors, policies, and institutions
154
1st pillar: Institutional environment .........................................30
4.3
Financial sector liberalization ......................................................1 Corporate governance.................................................................53 Legal and regulatory issues .......................................................37 Contract enforcement..................................................................53
7.0 3.6 3.4 3.2
2nd pillar: Business environment .............................................24
4.8
Human capital ...............................................................................30 Taxes...............................................................................................23 Infrastructure ................................................................................26 Cost of doing business ................................................................32
4.3 4.9 4.8 5.0
3rd pillar: Financial stability......................................................38
4.3
Currency stability..........................................................................36 Banking system stability..............................................................17 Risk of sovereign debt crisis ......................................................45
3.5 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......................................22
4.1
Size index .......................................................................................21 Efficiency index.............................................................................29 Financial information disclosure................................................13
3.2 5.2 3.9
5th pillar: Non-banking financial services .............................21
2.7
IPO activity.....................................................................................30 M&A activity..................................................................................15 Insurance .......................................................................................25 Securitization.................................................................................26
1.9 3.6 2.8 2.5
6th pillar: Financial markets......................................................15
3.9
Foreign exchange markets .........................................................17 Derivatives markets .....................................................................10 Equity market development ........................................................19 Bond market development............................................................7
1.7 5.4 3.5 4.8 1
Financial access 7th pillar: Financial access........................................................22
3.6
Commercial access......................................................................54 Retail access.................................................................................11
2.7 4.4 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n...............72.8 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................49 .....n.................3.8 Efficacy of corporate boards .................................................56 .....n.................3.9 Reliance on professional management .................................56 .....n.................3.5 Willingness to delegate.........................................................51 .....n.................3.2 Strength of auditing and reporting standards .......................51 .....n.................4.0 Ethical behavior of firms........................................................40 .....n.................3.7 Protection of minority shareholders’ interests ......................54 .....n.................3.4
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................54 .....n.................2.2 Centralization of economic policymaking ..............................23 .....n.................3.5 Regulation of securities exchanges.......................................37 .....n.................4.1 Property rights.......................................................................38 .....n.................4.3 Intellectual property protection .............................................37 .....n.................3.7 Diversion of public funds.......................................................38 .....n.................3.1 Public trust of politicians .......................................................45 .....n.................2.0 Corruption perceptions index ................................................33 .....n.................4.3 Strength of legal rights index ................................................50 .....n.................3.0 Central bank transparency.......................................................3 .....n................11.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................43 .....n.................3.0 Judicial independence ...........................................................44 .....n.................3.5 Irregular payments in judicial decisions.................................35 .....n.................4.0 Time to enforce a contract ....................................................54 .....n ...........1210.0 Number of procedures to enforce a contract .......................46 .....n...............40.0 Strength of investor protection index....................................27 .....n.................5.7 Cost of enforcing contracts...................................................42 .....n...............29.9
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................25 .....n.................4.7 Quality of math and science education.................................39 .....n.................3.6 Extent of staff training...........................................................56 .....n.................3.2 Local availability of specialized research and training services .............................................................28 .....n.................4.7 Brain drain and ease of hiring foreign labor ..........................44 .....n.................3.6 Tertiary enrollment.................................................................13 .....n...............68.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................42 .....n.................4.1 Distortive effect of taxes and subsidies on competition.......44 .....n.................3.8 Marginal tax variation ..............................................................7 .....n .............–15.9 Time to pay taxes..................................................................41 .....n.............334.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................40 .....n.................4.0 Quality of telephone infrastructure .......................................50 .....n.................5.5 Internet users .......................................................................29 .....n ...............41.9 Broadband Internet subscribers ............................................22 .....n...............18.9 Telephone lines......................................................................21 .....n...............35.7 Mobile telephone subscribers.................................................4 .....n .............151.6
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................48 .....n................17.9
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Italy
155
2: Country/Economy Profiles
Italy Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................35 .....n.................4.6 Cost of closing a business ....................................................47 .....n...............22.0 Time to start a business........................................................15 .....n ...............10.0 Time to register property ......................................................25 .....n ...............27.0 Time to close a business ......................................................21 .....n .................1.8
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................31 .....n.................0.6 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................41 .....n ...............–3.1 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies) ...........................................................11 .....n .............–19.2
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises....................................................1 .....n.................0.0 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles...........................21 .....n.................5.2 Financial Stress Index............................................................19 .....n.................4.6 Tier 1 capital ratio..................................................................34 .....n .................7.9 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................24 .....n ...............16.0 Foreign currency sovereign rating .........................................22 .....n ...............16.0 Aggregate macroprudential indicator ....................................49 .....n.................3.7 Manageability of public debt ................................................56 .....n .............115.8 Credit default swap spreads .................................................36 .....n .............173.2
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
156
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n..............127.1 Central bank assets to GDP ..................................................12 .....n.................4.5 Financial system deposits to GDP ........................................24 .....n...............68.1 M2 to GDP ............................................................................23 .....n ...............87.1 Private credit to GDP.............................................................15 .....n .............103.3 Bank deposits to GDP ...........................................................27 .....n ...............67.3 Money market instruments to GDP ......................................25 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................44 .....n.................3.4 Bank overhead costs .............................................................19 .....n.................2.0 Public ownership of banks ....................................................32 .....n.................8.1 Bank operating costs to assets .............................................22 .....n .................1.6 Non-performing bank loans to total loans .............................32 .....n.................6.2
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage ..............................................14 .....n ...............77.5 Public credit registry coverage ..............................................13 .....n ...............12.2
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................12 .....n .................1.4 IPO proceeds amount ...........................................................42 .....n.................0.1 Share of world IPOs ..............................................................18 .....n .................1.5
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................3.0 M&A transaction value to GDP .............................................24 .....n.................4.7 Share of total number of M&A deals ....................................15 .....n .................1.9
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density............................................................11 .....n.................5.4 Non–life insurance density ...................................................19 .....n.................2.6 Real growth of direct insurance premiums ...........................47 .....n ...............–0.1 Life insurance coverage ..........................................................9 .....n.................3.3 Non–life insurance coverage .................................................12 .....n .................1.5 Relative value-added of insurance to GDP ............................42 .....n.................0.6
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................34 .....n .................1.1 Share of total number of securitization deals........................16 .....n.................0.9
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Italy
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover.............................................16 .....n.................0.9 Outright forward foreign exchange turnover .........................16 .....n.................0.6 Foreign exchange swap turnover...........................................15 .....n .................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 .....n.................0.7 Interest rate derivatives turnover: Swaps................................9 .....n .................1.6 Interest rate derivatives turnover: Options..............................7 .....n .................1.0 Foreign exchange derivatives turnover: Currency swaps ......21 .....n.................0.3 Foreign exchange derivatives turnover: Options ...................12 .....n.................0.7
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio .....................................................1 .....n.............348.2 Stock market capitalization to GDP .......................................41 .....n...............50.6 Stock market value traded to GDP ........................................12 .....n..............167.0 Number of listed companies per 10,000 people...................31 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ..............4 .....n...............75.7 Public domestic bond market capitalization to GDP ...............2 .....n...............89.3 Private international bonds to GDP........................................11 .....n ...............51.6 Public international bonds to GDP.........................................10 .....n................11.0 Local currency corporate bond issuance to GDP ..................18 .....n .................1.5
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
157 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................44 .....n.................4.4 Venture capital availability......................................................52 .....n.................2.2 Ease of access to credit........................................................33 .....n.................2.8 Financing through local equity market ..................................46 .....n.................3.5 Ease of access to loans ........................................................50 .....n.................2.2 Foreign direct investment to GDP.........................................49 .....n.................0.8 Retail access Market penetration of bank accounts ...................................28 .....n ........77,499.2 Commercial bank branches .....................................................2 .....n...............52.0 Total number of ATMs ...........................................................13 .....n ...............97.8 Total number of point of sale (POS) devices .........................13 .....n ..........2,091.0 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Japan Key indicators
Financial assets by major type, 2008 13.1%
Population (millions), 2009 .....................................................127.6
US$ bn
GDP (US$ billions), 2009 ......................................................5,068.1
34.2%
GDP (current prices) per capita, 2009 ............................39,731.0 GDP (PPP) as share (%) of world total, 2009 ........................6.00 Compound annual growth rate of real GDP (%), 2005–09–0.44
n n n n
43.6%
Public debt securities ....8,411.6 Private debt securities...2,262.6 Banking deposits ..........10,719.9 Equity securities .............3,220.5 Total
9.2%
24,614.5
Total/GDP 503.7%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index........................................................9 4.7 1
2
3
4
5
6
7
Factors, policies, and institutions
158
1st pillar: Institutional environment .........................................16
5.5
Financial sector liberalization ....................................................14 Corporate governance.................................................................14 Legal and regulatory issues .......................................................18 Contract enforcement..................................................................10
6.9 5.1 4.6 5.6
2nd pillar: Business environment .............................................20
5.1
Human capital ...............................................................................16 Taxes...............................................................................................37 Infrastructure ................................................................................17 Cost of doing business ................................................................15
4.9 4.4 5.4 5.8
3rd pillar: Financial stability......................................................33
4.5
Currency stability..........................................................................19 Banking system stability..............................................................39 Risk of sovereign debt crisis ......................................................28
4.4 4.0 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........................................5
5.2
Size index .........................................................................................4 Efficiency index.............................................................................12 Financial information disclosure................................................22
5.4 5.9 3.3
5th pillar: Non-banking financial services ...............................7
4.1
IPO activity.....................................................................................16 M&A activity....................................................................................4 Insurance .........................................................................................2 Securitization.................................................................................16
3.1 5.3 4.8 3.3
6th pillar: Financial markets........................................................5
4.8
Foreign exchange markets ...........................................................3 Derivatives markets .......................................................................4 Equity market development ........................................................16 Bond market development..........................................................18
6.7 6.9 3.7 3.3 1
Financial access 7th pillar: Financial access........................................................28
3.4
Commercial access......................................................................36 Retail access ...............................................................................n/a
3.4 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services .......16 .....n...............62.5 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................28 .....n.................4.3 Efficacy of corporate boards..................................................15 .....n.................5.1 Reliance on professional management .................................14 .....n.................5.6 Willingness to delegate .........................................................11 .....n.................4.8 Strength of auditing and reporting standards .......................22 .....n.................5.4 Ethical behavior of firms........................................................15 .....n.................5.6 Protection of minority shareholders’ interests ......................17 .....n.................5.0
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................23 .....n.................3.3 Centralization of economic policymaking ..............................48 .....n.................2.4 Regulation of securities exchanges.......................................24 .....n.................4.8 Property rights .......................................................................17 .....n.................5.6 Intellectual property protection .............................................17 .....n.................5.2 Diversion of public funds.......................................................19 .....n.................5.2 Public trust of politicians .......................................................30 .....n.................3.1 Corruption perceptions index ................................................14 .....n .................7.7 Strength of legal rights index ................................................19 .....n .................7.0 Central bank transparency.....................................................15 .....n ...............10.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................19 .....n.................4.4 Judicial independence ...........................................................15 .....n.................5.7 Irregular payments in judicial decisions .................................11 .....n.................6.4 Time to enforce a contract ....................................................10 .....n.............360.0 Number of procedures to enforce a contract ........................11 .....n...............30.0 Strength of investor protection index....................................12 .....n .................7.0 Cost of enforcing contracts...................................................24 .....n...............22.7
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................41 .....n.................4.2 Quality of math and science education.................................15 .....n.................4.9 Extent of staff training.............................................................5 .....n.................5.4 Local availability of specialized research and training services .............................................................13 .....n.................5.6 Brain drain and ease of hiring foreign labor ..........................25 .....n.................4.1 Tertiary enrollment ................................................................24 .....n...............58.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection.......................................11 .....n.................6.3 Distortive effect of taxes and subsidies on competition.......30 .....n.................4.1 Marginal tax variation ............................................................35 .....n ...............13.5 Time to pay taxes..................................................................42 .....n.............355.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................13 .....n.................6.0 Quality of telephone infrastructure .........................................6 .....n.................6.8 Internet users .......................................................................10 .....n...............75.4 Broadband Internet subscribers ............................................16 .....n...............23.7 Telephone lines......................................................................20 .....n...............38.0 Mobile telephone subscribers...............................................42 .....n...............86.7
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................33 .....n .................7.5
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Japan
159
2: Country/Economy Profiles
Japan Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................38 .....n.................5.0 Cost of closing a business ......................................................5 .....n.................4.0 Time to start a business........................................................37 .....n...............23.0 Time to register property ......................................................12 .....n ...............14.0 Time to close a business ........................................................2 .....n.................0.6
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................35 .....n.................0.5 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................19 .....n.................3.6 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................3 .....n...............55.3
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................27 .....n .................1.5 Financial strengths indicator..................................................22 .....n.................5.0 Aggregate measure of real estate bubbles...........................23 .....n.................5.1 Financial Stress Index............................................................17 .....n.................4.0 Tier 1 capital ratio..................................................................38 .....n .................7.1 Output loss during banking crises.........................................41 .....n ...............67.5
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................17 .....n...............18.0 Foreign currency sovereign rating .........................................17 .....n................17.7 Aggregate macroprudential indicator.....................................16 .....n.................5.5 Manageability of public debt ................................................57 .....n.............189.2 Credit default swap spreads..................................................19 .....n...............96.0
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
160
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............150.9 Central bank assets to GDP ....................................................3 .....n ...............12.3 Financial system deposits to GDP ..........................................2 .....n.............182.7 M2 to GDP ..............................................................................4 .....n .............159.1 Private credit to GDP.............................................................19 .....n...............94.9 Bank deposits to GDP .............................................................2 .....n.............183.1 Money market instruments to GDP ......................................21 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................48 .....n.................3.1 Bank overhead costs ...............................................................9 .....n .................1.3 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets ...............................................6 .....n.................0.9 Non-performing bank loans to total loans ...............................8 .....n .................1.8
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage ..............................................16 .....n ...............76.2 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share...................................................................10 .....n .................1.6 IPO proceeds amount ...........................................................49 .....n.................0.1 Share of world IPOs ................................................................4 .....n.................6.4
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................4.2 M&A transaction value to GDP .............................................37 .....n.................3.0 Share of total number of M&A deals ......................................2 .....n.................8.8
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density .............................................................5 .....n .................7.9 Non–life insurance density ...................................................25 .....n.................2.1 Real growth of direct insurance premiums ...........................16 .....n.................0.1 Life insurance coverage ..........................................................4 .....n ...............10.0 Non–life insurance coverage ...................................................7 .....n.................2.7 Relative value-added of insurance to GDP ............................15 .....n .................1.8
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................39 .....n.................0.8 Share of total number of securitization deals .........................7 .....n.................2.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Japan
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ..............................................4 .....n .................7.9 Outright forward foreign exchange turnover ...........................3 .....n.................6.0 Foreign exchange swap turnover ............................................6 .....n.................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 .....n .................1.0 Interest rate derivatives turnover: Swaps................................7 .....n.................3.2 Interest rate derivatives turnover: Options..............................3 .....n.................8.8 Foreign exchange derivatives turnover: Currency swaps ........8 .....n.................2.7 Foreign exchange derivatives turnover: Options .....................4 .....n.................4.3
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................11 .....n .............159.7 Stock market capitalization to GDP .......................................24 .....n .............102.3 Stock market value traded to GDP ........................................14 .....n .............153.7 Number of listed companies per 10,000 people ...................14 .....n.................0.3
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............12 .....n ...............37.4 Public domestic bond market capitalization to GDP ...............1 .....n.............184.6 Private international bonds to GDP .......................................28 .....n .................7.8 Public international bonds to GDP ........................................49 .....n.................0.1 Local currency corporate bond issuance to GDP ..................16 .....n .................1.5
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
161 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................28 .....n.................5.1 Venture capital availability......................................................32 .....n.................2.8 Ease of access to credit ........................................................15 .....n.................3.6 Financing through local equity market ..................................16 .....n.................4.4 Ease of access to loans ........................................................30 .....n.................3.1 Foreign direct investment to GDP.........................................52 .....n.................0.5 Retail access Market penetration of bank accounts .....................................1 .....n .......717,241.6 Commercial bank branches ...................................................33 .....n ...............12.5 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Jordan Key indicators
Financial assets by major type, 2008 17.8%
Population (millions), 2009 .........................................................6.0 GDP (US$ billions), 2009 ...........................................................22.9 GDP (current prices) per capita, 2009 ..............................3,828.6 GDP (PPP) as share (%) of world total, 2009 ........................0.05
51.6%
Compound annual growth rate of real GDP (%), 2005–09 ..5.42
30.6%
US$ bn
n n n n
Public debt securities .........12.4 Private debt securities.........n/a Banking deposits .................21.3 Equity securities ..................35.8 Total
69.5
Total/GDP 327.6%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................29 3.6 1
2
3
4
5
6
7
Factors, policies, and institutions
162
1st pillar: Institutional environment .........................................25
4.5
Financial sector liberalization ....................................................22 Corporate governance.................................................................36 Legal and regulatory issues .......................................................30 Contract enforcement..................................................................40
6.0 4.3 3.7 3.9
2nd pillar: Business environment .............................................43
4.0
Human capital ...............................................................................40 Taxes...............................................................................................33 Infrastructure ................................................................................43 Cost of doing business ................................................................48
3.9 4.5 3.4 4.0
3rd pillar: Financial stability......................................................41
4.2
Currency stability..........................................................................39 Banking system stability..............................................................19 Risk of sovereign debt crisis ......................................................46
3.4 5.0 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......................................26
4.0
Size index .......................................................................................10 Efficiency index.............................................................................21 Financial information disclosure................................................54
4.0 5.6 1.0
5th pillar: Non-banking financial services .............................29
2.3
IPO activity.....................................................................................25 M&A activity..................................................................................35 Insurance .......................................................................................47 Securitization.................................................................................14
2.1 1.7 2.1 3.4
6th pillar: Financial markets......................................................19
3.3
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................21 Bond market development ........................................................n/a
n/a n/a 3.3 n/a 1
Financial access 7th pillar: Financial access........................................................34
3.2
Commercial access......................................................................20 Retail access.................................................................................31
3.7 2.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.......21 .....n...............49.4 Domestic financial sector liberalization ................................n/a .........................n/a
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................54 .....n.................3.4 Efficacy of corporate boards .................................................39 .....n.................4.4 Reliance on professional management .................................50 .....n.................3.9 Willingness to delegate.........................................................43 .....n.................3.6 Strength of auditing and reporting standards .......................25 .....n.................5.3 Ethical behavior of firms........................................................26 .....n.................4.5 Protection of minority shareholders’ interests ......................19 .....n.................4.9
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................19 .....n.................3.5 Centralization of economic policymaking ..............................45 .....n.................2.6 Regulation of securities exchanges .......................................19 .....n.................5.0 Property rights.......................................................................21 .....n.................5.4 Intellectual property protection .............................................24 .....n.................4.4 Diversion of public funds.......................................................24 .....n.................4.3 Public trust of politicians .......................................................23 .....n.................3.5 Corruption perceptions index ................................................26 .....n.................5.0 Strength of legal rights index ................................................40 .....n.................4.0 Central bank transparency.....................................................46 .....n.................2.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................44 .....n.................2.9 Judicial independence ...........................................................27 .....n.................4.6 Irregular payments in judicial decisions.................................26 .....n.................5.1 Time to enforce a contract ....................................................48 .....n.............689.0 Number of procedures to enforce a contract .......................39 .....n...............38.0 Strength of investor protection index....................................49 .....n.................4.3 Cost of enforcing contracts...................................................44 .....n ...............31.2
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................45 .....n.................3.9 Quality of math and science education.................................31 .....n.................4.4 Extent of staff training...........................................................52 .....n.................3.6 Local availability of specialized research and training services .............................................................33 .....n.................4.4 Brain drain and ease of hiring foreign labor ..........................48 .....n.................3.4 Tertiary enrollment ................................................................35 .....n...............39.9
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................36 .....n.................4.7 Distortive effect of taxes and subsidies on competition.......28 .....n.................4.2 Marginal tax variation ............................................................33 .....n ...............12.6 Time to pay taxes....................................................................9 .....n..............101.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................24 .....n.................5.2 Quality of telephone infrastructure........................................19 .....n.................6.6 Internet users .......................................................................41 .....n...............26.0 Broadband Internet subscribers ............................................46 .....n.................2.2 Telephone lines......................................................................52 .....n.................8.5 Mobile telephone subscribers...............................................43 .....n...............86.6
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................55 .....n...............49.5
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Jordan
163
2: Country/Economy Profiles
Jordan Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................51 .....n .................7.5 Cost of closing a business ....................................................20 .....n.................9.0 Time to start a business........................................................21 .....n ...............13.0 Time to register property ......................................................22 .....n ...............21.0 Time to close a business ......................................................50 .....n.................4.3
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) ....................n/a .........................n/a External vulnerability indicator...............................................24 .....n ...............81.2 Current account balance to GDP...........................................57 .....n..............–11.1 Dollarization vulnerability indicator ........................................33 .....n...............34.3 External debt to GDP (developing economies) .....................30 .....n...............63.1 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................16 .....n .................1.0 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles ...........................11 .....n.................6.1 Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio....................................................................1 .....n ...............16.8 Output loss during banking crises.........................................52 .....n .............106.4
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................41 .....n................11.0 Foreign currency sovereign rating .........................................48 .....n.................9.0 Aggregate macroprudential indicator ......................................9 .....n.................5.8 Manageability of public debt ................................................41 .....n...............59.4 Credit default swap spreads.................................................n/a .........................n/a
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
164
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............119.8 Central bank assets to GDP ..................................................13 .....n.................4.0 Financial system deposits to GDP.........................................10 .....n .............108.2 M2 to GDP ..............................................................................8 .....n .............145.5 Private credit to GDP.............................................................20 .....n...............94.2 Bank deposits to GDP ...........................................................11 .....n .............108.1 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................31 .....n.................4.3 Bank overhead costs .............................................................22 .....n.................2.1 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................25 .....n .................1.7 Non-performing bank loans to total loans .............................33 .....n.................6.4
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................49 .....n.................0.0 Public credit registry coverage ..............................................21 .....n .................1.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................49 .....n.................0.1 IPO proceeds amount............................................................11 .....n.................0.5 Share of world IPOs ..............................................................46 .....n.................0.2
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.0 M&A transaction value to GDP .............................................25 .....n.................4.7 Share of total number of M&A deals ....................................53 .....n.................0.0
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................49 .....n.................0.2 Non–life insurance density ...................................................27 .....n.................2.0 Real growth of direct insurance premiums ...........................42 .....n.................0.0 Life insurance coverage ........................................................54 .....n.................0.0 Non–life insurance coverage .................................................48 .....n.................0.1 Relative value-added of insurance to GDP ............................17 .....n .................1.7
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ..............................................................5 .....n.................3.7 Share of total number of securitization deals .......................52 .....n.................0.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Jordan
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 ...................................................43 .....n...............24.0 Stock market capitalization to GDP .........................................4 .....n.............208.8 Stock market value traded to GDP........................................20 .....n...............83.0 Number of listed companies per 10,000 people ...................10 .....n.................0.4
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................54 .....n.................0.0 Public international bonds to GDP ........................................44 .....n.................0.6 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
165 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................35 .....n.................4.7 Venture capital availability......................................................35 .....n.................2.7 Ease of access to credit........................................................30 .....n.................3.0 Financing through local equity market ..................................23 .....n.................4.1 Ease of access to loans ........................................................34 .....n.................3.0 Foreign direct investment to GDP .........................................13 .....n.................8.5 Retail access Market penetration of bank accounts ...................................24 .....n........89,880.9 Commercial bank branches ...................................................24 .....n................17.8 Total number of ATMs...........................................................40 .....n...............26.3 Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .......................................................................8 .....n ...............12.4
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Kazakhstan Key indicators
Financial assets by major type, 2008 10.1%
Population (millions), 2009 .......................................................15.6
US$ bn
26.9%
GDP (US$ billions), 2009 .........................................................109.3 GDP (current prices) per capita, 2009 ..............................7,019.0
30.0%
GDP (PPP) as share (%) of world total, 2009 ........................0.25 Compound annual growth rate of real GDP (%), 2005–09 ..4.71
n n n n
Public debt securities .........11.7 Private debt securities........34.7 Banking deposits .................38.0 Equity securities ..................31.1 Total
115.4
32.9%
Total/GDP 85.1%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................49 3.0 1
2
3
4
5
6
7
Factors, policies, and institutions
166
1st pillar: Institutional environment .........................................50
3.2
Financial sector liberalization ....................................................52 Corporate governance.................................................................49 Legal and regulatory issues .......................................................47 Contract enforcement..................................................................37
2.0 3.8 3.1 4.1
2nd pillar: Business environment .............................................39
4.2
Human capital ...............................................................................46 Taxes...............................................................................................45 Infrastructure ................................................................................46 Cost of doing business ................................................................16
3.7 4.0 3.2 5.8
3rd pillar: Financial stability......................................................49
3.8
Currency stability..........................................................................47 Banking system stability..............................................................42 Risk of sovereign debt crisis ......................................................34
2.7 3.9 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......................................44
2.9
Size index .......................................................................................44 Efficiency index.............................................................................40 Financial information disclosure................................................40
1.6 4.6 1.9
5th pillar: Non-banking financial services .............................22
2.5
IPO activity.....................................................................................12 M&A activity..................................................................................24 Insurance .......................................................................................57 Securitization.................................................................................13
3.3 2.4 1.1 3.5
6th pillar: Financial markets......................................................43
1.7
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................49 Bond market development..........................................................34
n/a n/a 1.5 2.0 1
Financial access 7th pillar: Financial access........................................................53
2.5
Commercial access......................................................................37 Retail access.................................................................................42
3.4 1.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................49 .....n ...............–1.1 Commitments to WTO agreement on trade in services ......n/a .........................n/a Domestic financial sector liberalization .................................49 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................42 .....n.................4.0 Efficacy of corporate boards .................................................43 .....n.................4.4 Reliance on professional management .................................55 .....n.................3.5 Willingness to delegate.........................................................49 .....n.................3.2 Strength of auditing and reporting standards .......................48 .....n.................4.2 Ethical behavior of firms........................................................42 .....n.................3.6 Protection of minority shareholders’ interests ......................50 .....n.................3.6
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................25 .....n.................3.2 Centralization of economic policymaking ..............................25 .....n.................3.3 Regulation of securities exchanges.......................................56 .....n.................3.3 Property rights.......................................................................51 .....n.................3.5 Intellectual property protection .............................................48 .....n.................2.8 Diversion of public funds.......................................................44 .....n.................2.8 Public trust of politicians .......................................................25 .....n.................3.4 Corruption perceptions index ................................................49 .....n.................2.7 Strength of legal rights index ................................................37 .....n.................5.0 Central bank transparency.....................................................38 .....n.................5.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................29 .....n.................3.7 Judicial independence ...........................................................50 .....n.................2.9 Irregular payments in judicial decisions.................................52 .....n.................2.9 Time to enforce a contract ....................................................13 .....n.............390.0 Number of procedures to enforce a contract .......................39 .....n...............38.0 Strength of investor protection index....................................27 .....n.................5.7 Cost of enforcing contracts...................................................22 .....n...............22.0
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................51 .....n.................3.6 Quality of math and science education.................................38 .....n.................3.8 Extent of staff training...........................................................50 .....n.................3.6 Local availability of specialized research and training services .............................................................48 .....n.................4.0 Brain drain and ease of hiring foreign labor ..........................49 .....n.................3.4 Tertiary enrollment ................................................................34 .....n ...............41.0
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................46 .....n.................3.9 Distortive effect of taxes and subsidies on competition.......45 .....n.................3.8 Marginal tax variation ............................................................31 .....n ...............10.4 Time to pay taxes..................................................................35 .....n .............271.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................41 .....n.................4.0 Quality of telephone infrastructure .......................................52 .....n.................5.3 Internet users .......................................................................50 .....n................11.0 Broadband Internet subscribers ............................................40 .....n.................4.3 Telephone lines......................................................................35 .....n...............22.3 Mobile telephone subscribers...............................................33 .....n...............96.1
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................21 .....n.................4.8
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Kazakhstan
167
2: Country/Economy Profiles
Kazakhstan Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ....................................................2 .....n.................0.1 Cost of closing a business ....................................................31 .....n ...............15.0 Time to start a business........................................................32 .....n...............20.0 Time to register property ......................................................33 .....n...............40.0 Time to close a business.......................................................16 .....n .................1.5
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) ....................n/a .........................n/a External vulnerability indicator...............................................29 .....n .............126.8 Current account balance to GDP...........................................38 .....n ...............–2.1 Dollarization vulnerability indicator ........................................36 .....n...............43.2 External debt to GDP (developing economies) .....................33 .....n...............94.7 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................35 .....n.................2.0 Financial strengths indicator..................................................53 .....n .................1.0 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio..................................................................27 .....n.................9.7 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................40 .....n ...............12.0 Foreign currency sovereign rating .........................................36 .....n................11.0 Aggregate macroprudential indicator ....................................27 .....n.................5.2 Manageability of public debt ..................................................5 .....n ...............13.7 Credit default swap spreads .................................................42 .....n .............227.3
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
168
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............66.2 Central bank assets to GDP ..................................................39 .....n.................0.1 Financial system deposits to GDP ........................................45 .....n ...............31.9 M2 to GDP ............................................................................45 .....n ...............47.5 Private credit to GDP.............................................................33 .....n...............64.2 Bank deposits to GDP ...........................................................47 .....n...............32.3 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................38 .....n.................3.9 Bank overhead costs .............................................................35 .....n.................3.0 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................21 .....n .................1.5 Non-performing bank loans to total loans .............................40 .....n ...............21.2
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................34 .....n...............29.5 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................25 .....n.................0.8 IPO proceeds amount .............................................................1 .....n .................1.1 Share of world IPOs ..............................................................40 .....n.................0.2
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.3 M&A transaction value to GDP .............................................15 .....n .................7.8 Share of total number of M&A deals ....................................46 .....n.................0.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................56 .....n.................0.1 Non–life insurance density ...................................................49 .....n.................0.6 Real growth of direct insurance premiums ...........................49 .....n ...............–0.2 Life insurance coverage ........................................................55 .....n.................0.0 Non–life insurance coverage .................................................51 .....n.................0.1 Relative value-added of insurance to GDP ...........................n/a .........................n/a
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ..............................................................8 .....n.................3.2 Share of total number of securitization deals .......................21 .....n.................0.4
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Kazakhstan
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 ..................................................n/a .........................n/a Stock market capitalization to GDP .......................................38 .....n...............52.2 Stock market value traded to GDP........................................37 .....n ...............14.7 Number of listed companies per 10,000 people...................25 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................17 .....n...............32.5 Public international bonds to GDP ........................................51 .....n.................0.0 Local currency corporate bond issuance to GDP ..................23 .....n.................0.7
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
169 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................53 .....n.................3.6 Venture capital availability......................................................45 .....n.................2.4 Ease of access to credit........................................................47 .....n.................2.4 Financing through local equity market ..................................51 .....n.................2.8 Ease of access to loans ........................................................54 .....n.................2.1 Foreign direct investment to GDP...........................................2 .....n ...............13.3 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................48 .....n.................2.8 Total number of ATMs...........................................................27 .....n...............52.1 Total number of point of sale (POS) devices.........................29 .....n .............170.9 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................15 .....n.................3.4
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Korea, Rep. Key indicators
Financial assets by major type, 2008 16.6%
Population (millions), 2009 .......................................................48.8 GDP (US$ billions), 2009 .........................................................832.5
US$ bn
36.1% 9.0%
GDP (current prices) per capita, 2009 ............................17,074.3 GDP (PPP) as share (%) of world total, 2009 ........................1.94 Compound annual growth rate of real GDP (%), 2005–09 ..2.53
n n n n
Public debt securities .......227.1 Private debt securities......122.6 Banking deposits ...............525.2 Equity securities ................494.6 Total
1,369.5
38.3%
Total/GDP 147.0%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................24 4.0 1
2
3
4
5
6
7
Factors, policies, and institutions
170
1st pillar: Institutional environment .........................................34
4.1
Financial sector liberalization ....................................................35 Corporate governance.................................................................42 Legal and regulatory issues .......................................................29 Contract enforcement..................................................................26
3.9 4.1 3.8 4.6
2nd pillar: Business environment .............................................19
5.3
Human capital ...............................................................................15 Taxes...............................................................................................25 Infrastructure ..................................................................................8 Cost of doing business ................................................................18
5.0 4.8 5.8 5.7
3rd pillar: Financial stability......................................................43
4.1
Currency stability..........................................................................43 Banking system stability..............................................................47 Risk of sovereign debt crisis ......................................................14
3.3 3.6 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......................................28
4.0
Size index .......................................................................................31 Efficiency index.............................................................................28 Financial information disclosure................................................14
2.7 5.3 3.8
5th pillar: Non-banking financial services ...............................6
4.2
IPO activity.....................................................................................17 M&A activity..................................................................................18 Insurance .........................................................................................7 Securitization...................................................................................3
3.0 3.4 4.2 6.0
6th pillar: Financial markets......................................................18
3.5
Foreign exchange markets .........................................................15 Derivatives markets .....................................................................18 Equity market development ........................................................10 Bond market development ........................................................n/a
1.9 3.3 4.6 n/a 1
Financial access 7th pillar: Financial access........................................................46
2.9
Commercial access......................................................................51 Retail access ...............................................................................n/a
2.9 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................37 .....n.................0.2 Commitments to WTO agreement on trade in services ......n/a .........................n/a Domestic financial sector liberalization .................................38 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................37 .....n.................4.1 Efficacy of corporate boards .................................................47 .....n.................4.2 Reliance on professional management .................................27 .....n.................4.9 Willingness to delegate.........................................................48 .....n.................3.3 Strength of auditing and reporting standards .......................46 .....n.................4.3 Ethical behavior of firms........................................................32 .....n.................4.1 Protection of minority shareholders’ interests ......................49 .....n.................3.8
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................39 .....n.................2.8 Centralization of economic policymaking ..............................36 .....n.................2.9 Regulation of securities exchanges.......................................39 .....n.................4.1 Property rights.......................................................................31 .....n.................4.7 Intellectual property protection .............................................27 .....n.................4.1 Diversion of public funds.......................................................29 .....n.................3.7 Public trust of politicians .......................................................44 .....n.................2.1 Corruption perceptions index ................................................23 .....n.................5.5 Strength of legal rights index ................................................19 .....n .................7.0 Central bank transparency.....................................................23 .....n.................9.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................54 .....n.................2.2 Judicial independence ...........................................................32 .....n.................4.0 Irregular payments in judicial decisions.................................34 .....n.................4.2 Time to enforce a contract ......................................................2 .....n.............230.0 Number of procedures to enforce a contract .......................30 .....n...............35.0 Strength of investor protection index....................................35 .....n.................5.3 Cost of enforcing contracts.....................................................2 .....n ...............10.3
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................29 .....n.................4.5 Quality of math and science education...................................9 .....n.................5.1 Extent of staff training...........................................................28 .....n.................4.4 Local availability of specialized research and training services .............................................................29 .....n.................4.6 Brain drain and ease of hiring foreign labor ..........................23 .....n.................4.2 Tertiary enrollment ..................................................................1 .....n...............94.7
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................34 .....n.................4.9 Distortive effect of taxes and subsidies on competition.......40 .....n.................3.9 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes..................................................................31 .....n.............250.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure..............................................11 .....n.................6.0 Quality of telephone infrastructure........................................14 .....n.................6.7 Internet users .........................................................................7 .....n ...............76.5 Broadband Internet subscribers ..............................................6 .....n...............32.1 Telephone lines......................................................................14 .....n...............44.3 Mobile telephone subscribers...............................................34 .....n...............94.7
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................44 .....n ...............14.7
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Korea, Rep.
171
2: Country/Economy Profiles
Korea, Rep. Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................41 .....n.................5.1 Cost of closing a business ......................................................5 .....n.................4.0 Time to start a business........................................................25 .....n ...............14.0 Time to register property.......................................................10 .....n................11.0 Time to close a business.......................................................16 .....n .................1.5
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................49 .....n ...............–3.2 External vulnerability indicator...............................................19 .....n...............66.8 Current account balance to GDP...........................................26 .....n .................1.7 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................18 .....n...............36.5 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................27 .....n .................1.5 Financial strengths indicator..................................................22 .....n.................5.0 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index ...........................................................25 .....n.................5.6 Tier 1 capital ratio..................................................................35 .....n .................7.7 Output loss during banking crises.........................................47 .....n...............86.4
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................24 .....n ...............16.0 Foreign currency sovereign rating .........................................26 .....n ...............15.0 Aggregate macroprudential indicator ......................................8 .....n.................5.8 Manageability of public debt ................................................11 .....n...............23.5 Credit default swap spreads .................................................25 .....n .............126.2
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
172
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............114.3 Central bank assets to GDP ..................................................21 .....n .................1.7 Financial system deposits to GDP ........................................31 .....n...............55.8 M2 to GDP ............................................................................30 .....n...............72.7 Private credit to GDP.............................................................24 .....n...............89.8 Bank deposits to GDP ...........................................................32 .....n...............60.9 Money market instruments to GDP ......................................16 .....n.................0.8
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................24 .....n.................4.5 Bank overhead costs .............................................................10 .....n .................1.4 Public ownership of banks ....................................................41 .....n ...............21.0 Bank operating costs to assets .............................................31 .....n.................2.2 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage ..............................................10 .....n...............93.8 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................19 .....n .................1.0 IPO proceeds amount ...........................................................33 .....n.................0.2 Share of world IPOs ................................................................6 .....n.................5.8
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n .................1.5 M&A transaction value to GDP .............................................20 .....n.................5.3 Share of total number of M&A deals ......................................9 .....n.................3.5
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density .............................................................8 .....n.................6.9 Non–life insurance density .....................................................5 .....n.................4.1 Real growth of direct insurance premiums ...........................34 .....n.................0.0 Life insurance coverage ..........................................................8 .....n.................3.4 Non–life insurance coverage..................................................10 .....n.................2.0 Relative value-added of insurance to GDP ............................13 .....n .................1.9
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ..............................................................9 .....n.................3.0 Share of total number of securitization deals .........................2 .....n.................5.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Korea, Rep.
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover.............................................11 .....n .................1.4 Outright forward foreign exchange turnover .........................14 .....n .................1.2 Foreign exchange swap turnover...........................................19 .....n.................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 .....n.................0.1 Interest rate derivatives turnover: Swaps..............................17 .....n.................0.3 Interest rate derivatives turnover: Options............................18 .....n.................0.2 Foreign exchange derivatives turnover: Currency swaps ........6 .....n.................3.2 Foreign exchange derivatives turnover: Options ...................19 .....n.................0.3
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio .....................................................5 .....n .............194.4 Stock market capitalization to GDP .......................................20 .....n .............118.4 Stock market value traded to GDP..........................................6 .....n .............276.0 Number of listed companies per 10,000 people ...................12 .....n.................0.4
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................24 .....n ...............13.8 Public international bonds to GDP ........................................43 .....n.................0.7 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
173 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................45 .....n.................4.2 Venture capital availability......................................................50 .....n.................2.2 Ease of access to credit........................................................23 .....n.................3.3 Financing through local equity market ..................................39 .....n.................3.8 Ease of access to loans ........................................................53 .....n.................2.1 Foreign direct investment to GDP.........................................48 .....n.................0.9 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................34 .....n ...............12.3 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .....................................................................27 .....n.................0.1
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Kuwait Key indicators
Financial assets by major type, 2008 5.7% 1.6%
Population (millions), 2009 .........................................................3.5
US$ bn
GDP (US$ billions), 2009 .........................................................111.3 GDP (current prices) per capita, 2009 ............................31,482.0 GDP (PPP) as share (%) of world total, 2009 ........................0.20
50.5%
42.3%
Compound annual growth rate of real GDP (%), 2005–09 ..2.22
n n n n
Public debt securities .........12.0 Private debt securities..........3.3 Banking deposits .................89.8 Equity securities ................107.2 Total
212.3
Total/GDP 134.2%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................28 3.7 1
2
3
4
5
6
7
Factors, policies, and institutions
174
1st pillar: Institutional environment .........................................37
3.9
Financial sector liberalization ....................................................39 Corporate governance.................................................................39 Legal and regulatory issues .......................................................43 Contract enforcement..................................................................32
3.7 4.2 3.3 4.3
2nd pillar: Business environment .............................................32
4.5
Human capital ...............................................................................51 Taxes...............................................................................................10 Infrastructure ................................................................................41 Cost of doing business ................................................................26
3.5 5.8 3.5 5.2
3rd pillar: Financial stability......................................................18
4.9
Currency stability..........................................................................11 Banking system stability..............................................................37 Risk of sovereign debt crisis ......................................................18
5.1 4.2 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......................................30
3.7
Size index .......................................................................................32 Efficiency index.............................................................................15 Financial information disclosure................................................39
2.5 5.9 1.9
5th pillar: Non-banking financial services .............................52
1.4
IPO activity.....................................................................................43 M&A activity..................................................................................45 Insurance .......................................................................................55 Securitization.................................................................................36
1.4 1.3 1.2 1.9
6th pillar: Financial markets........................................................9
4.4
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................12 Bond market development ........................................................n/a
n/a n/a 4.4 n/a 1
Financial access 7th pillar: Financial access........................................................41
3.0
Commercial access......................................................................44 Retail access.................................................................................28
3.2 2.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................33 .....n .................1.2 Commitments to WTO agreement on trade in services.......41 .....n ...............27.7 Domestic financial sector liberalization .................................41 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................30 .....n.................4.3 Efficacy of corporate boards .................................................53 .....n.................4.1 Reliance on professional management .................................53 .....n.................3.8 Willingness to delegate.........................................................21 .....n.................4.2 Strength of auditing and reporting standards .......................38 .....n.................4.8 Ethical behavior of firms........................................................28 .....n.................4.4 Protection of minority shareholders’ interests ......................44 .....n.................4.0
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................43 .....n.................2.7 Centralization of economic policymaking ..............................49 .....n.................2.4 Regulation of securities exchanges.......................................41 .....n.................4.0 Property rights.......................................................................28 .....n.................4.9 Intellectual property protection .............................................28 .....n.................4.1 Diversion of public funds.......................................................30 .....n.................3.6 Public trust of politicians .......................................................24 .....n.................3.4 Corruption perceptions index ................................................35 .....n.................4.1 Strength of legal rights index ................................................40 .....n.................4.0 Central bank transparency.....................................................46 .....n.................2.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................37 .....n.................3.3 Judicial independence ...........................................................22 .....n.................4.9 Irregular payments in judicial decisions.................................24 .....n.................5.3 Time to enforce a contract ....................................................36 .....n.............566.0 Number of procedures to enforce a contract .......................57 .....n...............50.0 Strength of investor protection index....................................18 .....n.................6.3 Cost of enforcing contracts ...................................................18 .....n...............18.8
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................48 .....n.................3.7 Quality of math and science education.................................40 .....n.................3.5 Extent of staff training...........................................................49 .....n.................3.6 Local availability of specialized research and training services .............................................................47 .....n.................4.0 Brain drain and ease of hiring foreign labor ..........................20 .....n.................4.5 Tertiary enrollment ................................................................49 .....n................17.6
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................24 .....n.................5.6 Distortive effect of taxes and subsidies on competition .......10 .....n.................4.9 Marginal tax variation ............................................................10 .....n .............–10.7 Time to pay taxes ..................................................................12 .....n .............118.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................28 .....n.................4.9 Quality of telephone infrastructure .......................................51 .....n.................5.4 Internet users .......................................................................33 .....n...............34.3 Broadband Internet subscribers ............................................49 .....n .................1.4 Telephone lines......................................................................41 .....n...............18.5 Mobile telephone subscribers...............................................31 .....n...............99.6
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business....................................................12 .....n .................1.0
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Kuwait
175
2: Country/Economy Profiles
Kuwait Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ....................................................6 .....n.................0.5 Cost of closing a business ......................................................1 .....n .................1.0 Time to start a business........................................................48 .....n...............35.0 Time to register property ......................................................45 .....n...............55.0 Time to close a business ......................................................48 .....n.................4.2
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................20 .....n.................2.2 External vulnerability indicator...............................................25 .....n...............83.5 Current account balance to GDP.............................................1 .....n ...............37.1 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .......................5 .....n...............20.7 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................14 .....n.................0.8 Financial strengths indicator..................................................22 .....n.................5.0 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio ..................................................................10 .....n ...............12.4 Output loss during banking crises.........................................54 .....n..............107.6
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................21 .....n................17.0 Foreign currency sovereign rating .........................................20 .....n................17.0 Aggregate macroprudential indicator ....................................40 .....n.................4.6 Manageability of public debt ..................................................3 .....n.................9.5 Credit default swap spreads.................................................n/a .........................n/a
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
176
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............70.4 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................30 .....n...............58.9 M2 to GDP ............................................................................27 .....n ...............77.2 Private credit to GDP.............................................................30 .....n ...............74.2 Bank deposits to GDP ...........................................................34 .....n...............60.3 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................5 .....n.................6.1 Bank overhead costs .............................................................21 .....n.................2.1 Public ownership of banks ....................................................44 .....n...............26.7 Bank operating costs to assets .............................................20 .....n .................1.5 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................32 .....n...............30.4 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................44 .....n.................0.2 IPO proceeds amount ...........................................................31 .....n.................0.2 Share of world IPOs ..............................................................51 .....n.................0.1
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.1 M&A transaction value to GDP .............................................40 .....n.................2.5 Share of total number of M&A deals ....................................50 .....n.................0.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................54 .....n.................0.1 Non–life insurance density ...................................................56 .....n.................0.3 Real growth of direct insurance premiums ..........................n/a .........................n/a Life insurance coverage ........................................................57 .....n.................0.0 Non–life insurance coverage .................................................57 .....n.................0.0 Relative value-added of insurance to GDP ............................38 .....n.................0.9
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................26 .....n .................1.4 Share of total number of securitization deals .......................44 .....n.................0.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Kuwait
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 ...................................................19 .....n...............95.7 Stock market capitalization to GDP ......................................n/a .........................n/a Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people.....................8 .....n.................0.7
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................40 .....n.................3.0 Public international bonds to GDP ........................................51 .....n.................0.0 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
177 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................40 .....n.................4.5 Venture capital availability......................................................17 .....n.................3.4 Ease of access to credit........................................................36 .....n.................2.7 Financing through local equity market ..................................29 .....n.................3.9 Ease of access to loans.........................................................18 .....n.................3.6 Foreign direct investment to GDP.........................................53 .....n.................0.1 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................26 .....n ...............16.5 Total number of ATMs...........................................................24 .....n...............53.4 Total number of point of sale (POS) devices .........................17 .....n..........1,040.1 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Malaysia Key indicators
Financial assets by major type, 2008 14.2%
Population (millions), 2009 .......................................................27.8
US$ bn
28.9%
GDP (US$ billions), 2009 .........................................................191.5 GDP (current prices) per capita, 2009 ..............................6,896.7
19.8%
GDP (PPP) as share (%) of world total, 2009 ........................0.54 Compound annual growth rate of real GDP (%), 2005–09 ..2.94
n n n n
Public debt securities .........91.7 Private debt securities......127.8 Banking deposits ...............239.7 Equity securities ................187.1 Total
646.2
37.1%
Total/GDP 291.6%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................17 4.2 1
2
3
4
5
6
7
Factors, policies, and institutions
178
1st pillar: Institutional environment .........................................20
5.1
Financial sector liberalization ....................................................26 Corporate governance.................................................................18 Legal and regulatory issues .......................................................21 Contract enforcement..................................................................19
5.8 5.0 4.4 5.1
2nd pillar: Business environment .............................................30
4.6
Human capital ...............................................................................28 Taxes...............................................................................................18 Infrastructure ................................................................................30 Cost of doing business ................................................................41
4.4 5.2 4.1 4.6
3rd pillar: Financial stability........................................................3
5.7
Currency stability............................................................................1 Banking system stability..............................................................13 Risk of sovereign debt crisis ......................................................23
6.5 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......................................12
4.7
Size index .......................................................................................17 Efficiency index.............................................................................30 Financial information disclosure..................................................1
3.7 5.1 5.8
5th pillar: Non-banking financial services .............................18
3.2
IPO activity.....................................................................................10 M&A activity..................................................................................13 Insurance .......................................................................................22 Securitization.................................................................................23
3.4 3.7 2.9 2.6
6th pillar: Financial markets......................................................25
2.6
Foreign exchange markets .........................................................37 Derivatives markets .....................................................................34 Equity market development ........................................................15 Bond market development..........................................................16
1.1 1.1 3.8 3.5 1
Financial access 7th pillar: Financial access........................................................20
3.6
Commercial access........................................................................9 Retail access.................................................................................25
4.2 3.0 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................31 .....n .................1.2 Commitments to WTO agreement on trade in services.......24 .....n...............44.6 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................10 .....n.................4.7 Efficacy of corporate boards..................................................13 .....n.................5.2 Reliance on professional management .................................19 .....n.................5.3 Willingness to delegate .........................................................14 .....n.................4.6 Strength of auditing and reporting standards .......................21 .....n.................5.4 Ethical behavior of firms........................................................25 .....n.................4.7 Protection of minority shareholders’ interests ......................16 .....n.................5.0
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation ...........................................7 .....n.................4.0 Centralization of economic policymaking ..............................21 .....n.................3.6 Regulation of securities exchanges .......................................14 .....n.................5.2 Property rights.......................................................................25 .....n.................5.1 Intellectual property protection .............................................23 .....n.................4.7 Diversion of public funds.......................................................26 .....n.................4.1 Public trust of politicians .......................................................20 .....n.................3.8 Corruption perceptions index ................................................30 .....n.................4.5 Strength of legal rights index ..................................................1 .....n ...............10.0 Central bank transparency.....................................................36 .....n.................6.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................12 .....n.................4.6 Judicial independence ...........................................................28 .....n.................4.3 Irregular payments in judicial decisions.................................32 .....n.................4.4 Time to enforce a contract ....................................................39 .....n.............585.0 Number of procedures to enforce a contract ........................11 .....n...............30.0 Strength of investor protection index......................................3 .....n.................8.7 Cost of enforcing contracts...................................................37 .....n ...............27.5
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................24 .....n.................4.7 Quality of math and science education .................................17 .....n.................4.8 Extent of staff training...........................................................12 .....n.................5.0 Local availability of specialized research and training services .............................................................22 .....n.................5.0 Brain drain and ease of hiring foreign labor ..........................21 .....n.................4.3 Tertiary enrollment ................................................................42 .....n...............30.2
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................33 .....n.................5.0 Distortive effect of taxes and subsidies on competition.......29 .....n.................4.1 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes ..................................................................17 .....n .............145.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................20 .....n.................5.5 Quality of telephone infrastructure .......................................41 .....n.................6.0 Internet users .......................................................................25 .....n...............55.8 Broadband Internet subscribers ............................................38 .....n.................4.9 Telephone lines......................................................................44 .....n ...............15.9 Mobile telephone subscribers...............................................29 .....n .............102.6
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................40 .....n................11.9
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Malaysia
179
2: Country/Economy Profiles
Malaysia Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................22 .....n.................2.6 Cost of closing a business ....................................................31 .....n ...............15.0 Time to start a business........................................................18 .....n................11.0 Time to register property ......................................................54 .....n .............144.0 Time to close a business ......................................................29 .....n.................2.3
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .......................4 .....n.................9.1 External vulnerability indicator.................................................8 .....n...............29.6 Current account balance to GDP.............................................5 .....n ...............16.6 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies)......................17 .....n...............34.9 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................27 .....n .................1.5 Financial strengths indicator..................................................22 .....n.................5.0 Aggregate measure of real estate bubbles.............................4 .....n.................6.7 Financial Stress Index .............................................................7 .....n.................0.6 Tier 1 capital ratio ..................................................................17 .....n................11.4 Output loss during banking crises.........................................36 .....n ...............47.2
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................24 .....n ...............16.0 Foreign currency sovereign rating .........................................30 .....n ...............14.0 Aggregate macroprudential indicator ......................................6 .....n.................5.8 Manageability of public debt ................................................38 .....n...............53.7 Credit default swap spreads .................................................21 .....n .............100.1
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
180
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............102.6 Central bank assets to GDP ..................................................30 .....n.................0.8 Financial system deposits to GDP ..........................................9 .....n .............109.4 M2 to GDP ..............................................................................6 .....n .............146.7 Private credit to GDP.............................................................18 .....n...............96.4 Bank deposits to GDP ...........................................................10 .....n .............109.4 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................21 .....n.................4.6 Bank overhead costs .............................................................17 .....n .................1.7 Public ownership of banks ....................................................50 .....n...............39.9 Bank operating costs to assets .............................................26 .....n .................1.7 Non-performing bank loans to total loans .............................19 .....n.................3.8
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage ..............................................13 .....n...............82.0 Public credit registry coverage ................................................3 .....n...............48.5
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................21 .....n.................0.9 IPO proceeds amount .............................................................7 .....n.................0.8 Share of world IPOs ..............................................................12 .....n.................2.2
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.7 M&A transaction value to GDP ...............................................5 .....n................11.4 Share of total number of M&A deals ....................................13 .....n.................2.0
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................21 .....n.................3.0 Non–life insurance density ...................................................36 .....n .................1.6 Real growth of direct insurance premiums ...........................23 .....n.................0.0 Life insurance coverage.........................................................19 .....n.................0.8 Non–life insurance coverage .................................................31 .....n.................0.5 Relative value-added of insurance to GDP ..............................8 .....n.................2.6
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................18 .....n.................2.0 Share of total number of securitization deals .......................25 .....n.................0.4
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Malaysia
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................33 .....n.................0.1 Outright forward foreign exchange turnover .........................34 .....n.................0.1 Foreign exchange swap turnover ..........................................34 .....n.................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 .....n.................0.0 Interest rate derivatives turnover: Swaps..............................31 .....n.................0.0 Interest rate derivatives turnover: Options............................29 .....n.................0.0 Foreign exchange derivatives turnover: Currency swaps ......30 .....n.................0.1 Foreign exchange derivatives turnover: Options ...................36 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................24 .....n...............78.3 Stock market capitalization to GDP .........................................5 .....n.............180.3 Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people ...................11 .....n.................0.4
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............11 .....n...............50.4 Public domestic bond market capitalization to GDP .............14 .....n...............43.2 Private international bonds to GDP .......................................23 .....n ...............16.2 Public international bonds to GDP ........................................37 .....n .................1.3 Local currency corporate bond issuance to GDP ....................9 .....n.................2.4
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
181 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................24 .....n.................5.4 Venture capital availability........................................................6 .....n.................3.9 Ease of access to credit..........................................................3 .....n.................4.2 Financing through local equity market ....................................8 .....n.................4.7 Ease of access to loans ..........................................................8 .....n.................4.2 Foreign direct investment to GDP.........................................26 .....n.................4.2 Retail access Market penetration of bank accounts .....................................8 .....n......206,332.8 Commercial bank branches ...................................................36 .....n................11.4 Total number of ATMs...........................................................23 .....n...............54.0 Total number of point of sale (POS) devices .........................16 .....n..........1,063.1 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................10 .....n .................7.8
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Mexico Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .....................................................107.6
US$ bn
22.5%
GDP (US$ billions), 2009 .........................................................874.9
37.7%
GDP (current prices) per capita, 2009 ..............................8,134.7 GDP (PPP) as share (%) of world total, 2009 ........................2.09 Compound annual growth rate of real GDP (%), 2005–09 ..0.57
19.7%
n n n n
Public debt securities .......389.2 Private debt securities......208.4 Banking deposits ...............203.3 Equity securities ................232.6 Total
1,033.4
20.2%
Total/GDP 94.8%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................43 3.1 1
2
3
4
5
6
7
Factors, policies, and institutions
182
1st pillar: Institutional environment .........................................48
3.5
Financial sector liberalization ....................................................42 Corporate governance.................................................................47 Legal and regulatory issues .......................................................49 Contract enforcement..................................................................42
3.3 3.9 3.1 3.8
2nd pillar: Business environment .............................................46
3.9
Human capital ...............................................................................50 Taxes...............................................................................................43 Infrastructure ................................................................................45 Cost of doing business ................................................................36
3.5 4.0 3.2 4.9
3rd pillar: Financial stability......................................................15
5.0
Currency stability..........................................................................17 Banking system stability..............................................................12 Risk of sovereign debt crisis ......................................................33
4.6 5.3 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......................................52
2.6
Size index .......................................................................................53 Efficiency index.............................................................................50 Financial information disclosure................................................21
1.0 3.8 3.3
5th pillar: Non-banking financial services .............................39
2.0
IPO activity.....................................................................................39 M&A activity..................................................................................43 Insurance .......................................................................................45 Securitization.................................................................................19
1.5 1.4 2.1 2.9
6th pillar: Financial markets......................................................47
1.6
Foreign exchange markets .........................................................23 Derivatives markets .....................................................................29 Equity market development ........................................................47 Bond market development..........................................................32
1.3 1.5 1.5 2.0 1
Financial access 7th pillar: Financial access........................................................42
3.0
Commercial access......................................................................52 Retail access.................................................................................23
2.8 3.1 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................36 .....n .................1.2 Commitments to WTO agreement on trade in services.......47 .....n ...............16.7 Domestic financial sector liberalization .................................33 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................51 .....n.................3.6 Efficacy of corporate boards .................................................51 .....n.................4.1 Reliance on professional management .................................52 .....n.................3.8 Willingness to delegate.........................................................47 .....n.................3.3 Strength of auditing and reporting standards .......................39 .....n.................4.7 Ethical behavior of firms........................................................46 .....n.................3.6 Protection of minority shareholders’ interests ......................43 .....n.................4.1
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................42 .....n.................2.7 Centralization of economic policymaking ..............................32 .....n.................3.0 Regulation of securities exchanges.......................................47 .....n.................3.8 Property rights.......................................................................45 .....n.................3.9 Intellectual property protection .............................................43 .....n.................3.1 Diversion of public funds.......................................................45 .....n.................2.8 Public trust of politicians .......................................................41 .....n.................2.2 Corruption perceptions index ................................................44 .....n.................3.3 Strength of legal rights index ................................................40 .....n.................4.0 Central bank transparency.....................................................33 .....n .................7.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................50 .....n.................2.5 Judicial independence ...........................................................48 .....n.................3.2 Irregular payments in judicial decisions.................................51 .....n.................3.0 Time to enforce a contract ....................................................20 .....n .............415.0 Number of procedures to enforce a contract .......................39 .....n...............38.0 Strength of investor protection index....................................21 .....n.................6.0 Cost of enforcing contracts...................................................46 .....n...............32.0
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................31 .....n.................4.5 Quality of math and science education.................................54 .....n.................2.6 Extent of staff training...........................................................42 .....n.................3.8 Local availability of specialized research and training services .............................................................38 .....n.................4.3 Brain drain and ease of hiring foreign labor ..........................46 .....n.................3.5 Tertiary enrollment ................................................................46 .....n...............26.9
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................37 .....n.................4.6 Distortive effect of taxes and subsidies on competition.......47 .....n.................3.7 Marginal tax variation ............................................................23 .....n .................1.3 Time to pay taxes..................................................................50 .....n..............517.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................42 .....n.................3.9 Quality of telephone infrastructure .......................................38 .....n.................6.1 Internet users .......................................................................47 .....n ...............21.7 Broadband Internet subscribers ............................................33 .....n .................7.0 Telephone lines......................................................................40 .....n ...............19.0 Mobile telephone subscribers...............................................49 .....n...............69.4
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................39 .....n................11.7
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Mexico
183
2: Country/Economy Profiles
Mexico Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................42 .....n.................5.2 Cost of closing a business ....................................................39 .....n...............18.0 Time to start a business........................................................21 .....n ...............13.0 Time to register property ......................................................48 .....n ...............74.0 Time to close a business ......................................................21 .....n .................1.8
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................43 .....n ...............–1.2 External vulnerability indicator...............................................14 .....n...............40.0 Current account balance to GDP...........................................33 .....n ...............–1.0 Dollarization vulnerability indicator ........................................28 .....n................11.4 External debt to GDP (developing economies) .......................6 .....n...............22.1 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................35 .....n.................2.0 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles.............................7 .....n.................6.3 Financial Stress Index ...........................................................21 .....n.................4.8 Tier 1 capital ratio....................................................................5 .....n ...............13.5 Output loss during banking crises.........................................30 .....n ...............37.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................31 .....n ...............15.0 Foreign currency sovereign rating .........................................34 .....n ...............12.0 Aggregate macroprudential indicator ....................................31 .....n.................5.0 Manageability of public debt ................................................22 .....n...............39.1 Credit default swap spreads .................................................30 .....n .............134.3
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
184
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............33.5 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................50 .....n...............22.1 M2 to GDP ............................................................................56 .....n...............30.5 Private credit to GDP.............................................................50 .....n...............23.5 Bank deposits to GDP ...........................................................53 .....n ...............21.9 Money market instruments to GDP ......................................24 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................57 .....n .................1.3 Bank overhead costs .............................................................57 .....n...............20.9 Public ownership of banks ....................................................24 .....n.................3.3 Bank operating costs to assets .............................................44 .....n.................3.1 Non-performing bank loans to total loans .............................18 .....n.................3.4
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage ..............................................14 .....n ...............77.5 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................24 .....n.................0.9 IPO proceeds amount ...........................................................39 .....n.................0.1 Share of world IPOs ..............................................................40 .....n.................0.2
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.5 M&A transaction value to GDP .............................................49 .....n .................1.6 Share of total number of M&A deals ....................................31 .....n.................0.4
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................38 .....n.................0.9 Non–life insurance density ...................................................43 .....n .................1.1 Real growth of direct insurance premiums ...........................18 .....n.................0.0 Life insurance coverage.........................................................17 .....n.................0.9 Non–life insurance coverage .................................................16 .....n .................1.2 Relative value-added of insurance to GDP ............................54 .....n.................0.3
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................28 .....n .................1.3 Share of total number of securitization deals........................11 .....n .................1.3
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Mexico
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................22 .....n.................0.4 Outright forward foreign exchange turnover .........................32 .....n.................0.1 Foreign exchange swap turnover ..........................................21 .....n.................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 .....n.................0.1 Interest rate derivatives turnover: Swaps..............................20 .....n.................0.2 Interest rate derivatives turnover: Options............................21 .....n.................0.1 Foreign exchange derivatives turnover: Currency swaps ......34 .....n.................0.0 Foreign exchange derivatives turnover: Options ...................26 .....n.................0.1
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................39 .....n ...............37.5 Stock market capitalization to GDP .......................................39 .....n ...............51.5 Stock market value traded to GDP........................................36 .....n................17.2 Number of listed companies per 10,000 people...................50 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............23 .....n................17.7 Public domestic bond market capitalization to GDP .............32 .....n...............22.8 Private international bonds to GDP .......................................30 .....n.................6.1 Public international bonds to GDP ........................................22 .....n.................5.0 Local currency corporate bond issuance to GDP ..................27 .....n.................0.5
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
185 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................37 .....n.................4.6 Venture capital availability......................................................48 .....n.................2.3 Ease of access to credit........................................................46 .....n.................2.5 Financing through local equity market ..................................49 .....n.................3.0 Ease of access to loans ........................................................48 .....n.................2.4 Foreign direct investment to GDP.........................................42 .....n.................2.5 Retail access Market penetration of bank accounts ...................................20 .....n ......109,676.3 Commercial bank branches ...................................................29 .....n ...............14.7 Total number of ATMs...........................................................31 .....n...............44.8 Total number of point of sale (POS) devices.........................23 .....n.............592.1 Microfinance institution (MFI) borrowers’ penetration rate .......................................................................4 .....n ...............21.0
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Morocco Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .......................................................31.7
US$ bn
26.7%
GDP (US$ billions), 2009 ...........................................................90.8
n n n n
34.8%
GDP (current prices) per capita, 2009 ..............................2,864.5 GDP (PPP) as share (%) of world total, 2009 ........................0.21 Compound annual growth rate of real GDP (%), 2005–09 ..4.22
Public debt securities .........50.5 Private debt securities.........n/a Banking deposits .................72.8 Equity securities ..................65.7 Total
189.0
38.5%
Total/GDP 212.7%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................41 3.2 1
2
3
4
5
6
7
Factors, policies, and institutions
186
1st pillar: Institutional environment .........................................49
3.4
Financial sector liberalization ....................................................50 Corporate governance.................................................................46 Legal and regulatory issues .......................................................40 Contract enforcement..................................................................47
2.7 4.0 3.4 3.5
2nd pillar: Business environment .............................................41
4.0
Human capital ...............................................................................49 Taxes...............................................................................................47 Infrastructure ................................................................................37 Cost of doing business ................................................................33
3.6 3.9 3.6 5.0
3rd pillar: Financial stability......................................................16
5.0
Currency stability..........................................................................14 Banking system stability..............................................................10 Risk of sovereign debt crisis ......................................................38
4.9 5.4 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......................................32
3.6
Size index .......................................................................................26 Efficiency index.............................................................................22 Financial information disclosure................................................46
2.9 5.4 1.4
5th pillar: Non-banking financial services .............................42
1.9
IPO activity.....................................................................................21 M&A activity..................................................................................47 Insurance .......................................................................................32 Securitization.................................................................................44
2.3 1.3 2.7 1.4
6th pillar: Financial markets......................................................45
1.6
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................36 Bond market development..........................................................46
n/a n/a 2.1 1.2 1
Financial access 7th pillar: Financial access........................................................45
2.9
Commercial access......................................................................33 Retail access.................................................................................33
3.5 2.3 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................49 .....n ...............–1.1 Commitments to WTO agreement on trade in services.......42 .....n...............39.5 Domestic financial sector liberalization .................................36 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................45 .....n.................4.0 Efficacy of corporate boards .................................................32 .....n.................4.6 Reliance on professional management .................................54 .....n.................3.7 Willingness to delegate.........................................................50 .....n.................3.2 Strength of auditing and reporting standards .......................49 .....n.................4.2 Ethical behavior of firms........................................................38 .....n.................3.8 Protection of minority shareholders’ interests ......................32 .....n.................4.5
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................22 .....n.................3.4 Centralization of economic policymaking ..............................33 .....n.................3.0 Regulation of securities exchanges.......................................27 .....n.................4.7 Property rights.......................................................................35 .....n.................4.4 Intellectual property protection .............................................40 .....n.................3.4 Diversion of public funds.......................................................32 .....n.................3.4 Public trust of politicians .......................................................31 .....n.................3.1 Corruption perceptions index ................................................44 .....n.................3.3 Strength of legal rights index ................................................50 .....n.................3.0 Central bank transparency....................................................n/a .........................n/a
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................30 .....n.................3.7 Judicial independence ...........................................................42 .....n.................3.5 Irregular payments in judicial decisions.................................43 .....n.................3.3 Time to enforce a contract ....................................................43 .....n .............615.0 Number of procedures to enforce a contract .......................46 .....n...............40.0 Strength of investor protection index....................................54 .....n.................3.0 Cost of enforcing contracts...................................................30 .....n...............25.2
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................30 .....n.................4.5 Quality of math and science education.................................37 .....n.................4.0 Extent of staff training...........................................................44 .....n.................3.7 Local availability of specialized research and training services .............................................................40 .....n.................4.2 Brain drain and ease of hiring foreign labor ..........................39 .....n.................3.8 Tertiary enrollment ................................................................53 .....n ...............12.3
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................49 .....n.................3.6 Distortive effect of taxes and subsidies on competition.......34 .....n.................4.0 Marginal tax variation ............................................................29 .....n .................7.8 Time to pay taxes..................................................................43 .....n.............358.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................38 .....n.................4.1 Quality of telephone infrastructure .......................................33 .....n.................6.3 Internet users .......................................................................34 .....n...............33.0 Broadband Internet subscribers ............................................47 .....n .................1.5 Telephone lines......................................................................50 .....n.................9.5 Mobile telephone subscribers ...............................................15 .....n .............124.8
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................46 .....n ...............16.1
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Morocco
187
2: Country/Economy Profiles
Morocco Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................36 .....n.................4.9 Cost of closing a business ....................................................39 .....n...............18.0 Time to start a business........................................................19 .....n ...............12.0 Time to register property ......................................................40 .....n ...............47.0 Time to close a business ......................................................21 .....n .................1.8
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................32 .....n.................0.6 External vulnerability indicator.................................................7 .....n ...............27.8 Current account balance to GDP...........................................42 .....n ...............–3.4 Dollarization vulnerability indicator ........................................26 .....n.................3.6 External debt to GDP (developing economies) .....................13 .....n...............26.8 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises ..................................................11 .....n.................0.5 Financial strengths indicator..................................................32 .....n.................4.0 Aggregate measure of real estate bubbles...........................33 .....n.................4.6 Financial Stress Index .............................................................5 .....n.................0.4 Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises.........................................26 .....n................11.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................35 .....n ...............13.0 Foreign currency sovereign rating .........................................36 .....n................11.0 Aggregate macroprudential indicator ....................................30 .....n.................5.0 Manageability of public debt ................................................39 .....n ...............57.2 Credit default swap spreads .................................................24 .....n .............124.6
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
188
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n ...............81.4 Central bank assets to GDP ..................................................18 .....n.................2.0 Financial system deposits to GDP.........................................17 .....n...............85.9 M2 to GDP ............................................................................17 .....n .............102.1 Private credit to GDP.............................................................31 .....n...............69.8 Bank deposits to GDP ...........................................................18 .....n...............85.2 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................28 .....n.................4.4 Bank overhead costs .............................................................11 .....n .................1.4 Public ownership of banks ....................................................33 .....n.................9.4 Bank operating costs to assets .............................................33 .....n.................2.3 Non-performing bank loans to total loans .............................28 .....n.................5.5
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................39 .....n ...............14.0 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................37 .....n.................0.3 IPO proceeds amount ...........................................................10 .....n.................0.5 Share of world IPOs ..............................................................26 .....n.................0.5
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.1 M&A transaction value to GDP .............................................43 .....n.................2.2 Share of total number of M&A deals ....................................53 .....n.................0.0
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................37 .....n.................0.9 Non–life insurance density ...................................................30 .....n .................1.9 Real growth of direct insurance premiums ...........................14 .....n.................0.1 Life insurance coverage ........................................................34 .....n.................0.3 Non–life insurance coverage .................................................28 .....n.................0.6 Relative value-added of insurance to GDP ............................16 .....n .................1.7
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................42 .....n.................0.7 Share of total number of securitization deals .......................52 .....n.................0.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Morocco
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 ...................................................36 .....n...............45.1 Stock market capitalization to GDP .......................................19 .....n .............124.0 Stock market value traded to GDP........................................32 .....n...............35.9 Number of listed companies per 10,000 people...................40 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................54 .....n.................0.0 Public international bonds to GDP ........................................42 .....n.................0.8 Local currency corporate bond issuance to GDP ..................32 .....n.................0.2
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
189 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................41 .....n.................4.5 Venture capital availability......................................................27 .....n.................3.0 Ease of access to credit ........................................................13 .....n.................3.7 Financing through local equity market ..................................21 .....n.................4.2 Ease of access to loans ........................................................29 .....n.................3.1 Foreign direct investment to GDP.........................................41 .....n.................2.6 Retail access Market penetration of bank accounts ...................................37 .....n ........26,527.9 Commercial bank branches ...................................................40 .....n.................9.9 Total number of ATMs...........................................................42 .....n...............18.6 Total number of point of sale (POS) devices.........................31 .....n...............89.9 Microfinance institution (MFI) borrowers’ penetration rate .......................................................................3 .....n...............22.6
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Netherlands Key indicators
Financial assets by major type, 2008 10.2%
Population (millions), 2009 .......................................................16.5
13.4% US$ bn
GDP (US$ billions), 2009 .........................................................794.8
n n n n
GDP (current prices) per capita, 2009 ............................48,222.9 27.6%
GDP (PPP) as share (%) of world total, 2009 ........................0.95 Compound annual growth rate of real GDP (%), 2005–09 ..0.96
Public debt securities .......510.2 Private debt securities...1,864.8 Banking deposits ............1,051.0 Equity securities ................387.9 Total
48.9%
3,814.0
Total/GDP 434.9%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index........................................................7 4.7 1
2
3
4
5
6
7
Factors, policies, and institutions
190
1st pillar: Institutional environment ...........................................9
5.8
Financial sector liberalization ......................................................1 Corporate governance...................................................................7 Legal and regulatory issues .........................................................9 Contract enforcement..................................................................17
7.0 5.5 5.2 5.4
2nd pillar: Business environment ...............................................8
5.7
Human capital .................................................................................9 Taxes.................................................................................................9 Infrastructure ................................................................................13 Cost of doing business ................................................................11
5.3 5.8 5.5 6.0
3rd pillar: Financial stability......................................................31
4.5
Currency stability..........................................................................22 Banking system stability..............................................................45 Risk of sovereign debt crisis ......................................................17
4.3 3.8 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........................................2
5.3
Size index .........................................................................................3 Efficiency index...............................................................................9 Financial information disclosure................................................18
5.6 6.0 3.5
5th pillar: Non-banking financial services ...............................9
3.6
IPO activity.....................................................................................40 M&A activity....................................................................................7 Insurance .......................................................................................12 Securitization...................................................................................6
1.4 4.9 3.5 4.7
6th pillar: Financial markets........................................................8
4.5
Foreign exchange markets .........................................................18 Derivatives markets .....................................................................16 Equity market development ..........................................................1 Bond market development............................................................2
1.7 4.0 5.9 5.3 1
Financial access 7th pillar: Financial access........................................................19
3.7
Commercial access......................................................................35 Retail access.................................................................................13
3.4 4.0 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n ...............74.6 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................17 .....n.................4.5 Efficacy of corporate boards ...................................................8 .....n.................5.3 Reliance on professional management ...................................5 .....n.................6.0 Willingness to delegate...........................................................4 .....n.................5.7 Strength of auditing and reporting standards .........................9 .....n.................5.8 Ethical behavior of firms..........................................................8 .....n.................6.3 Protection of minority shareholders’ interests ......................11 .....n.................5.1
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................26 .....n.................3.1 Centralization of economic policymaking ..............................14 .....n.................3.9 Regulation of securities exchanges .......................................15 .....n.................5.2 Property rights .......................................................................13 .....n.................5.8 Intellectual property protection ...............................................7 .....n.................5.7 Diversion of public funds.........................................................8 .....n.................5.9 Public trust of politicians .........................................................9 .....n.................5.0 Corruption perceptions index ..................................................5 .....n.................8.9 Strength of legal rights index ................................................30 .....n.................6.0 Central bank transparency.......................................................3 .....n................11.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................14 .....n.................4.6 Judicial independence ...........................................................10 .....n.................6.2 Irregular payments in judicial decisions.................................14 .....n.................6.3 Time to enforce a contract ....................................................31 .....n .............514.0 Number of procedures to enforce a contract .........................4 .....n...............25.0 Strength of investor protection index....................................44 .....n.................4.7 Cost of enforcing contracts...................................................29 .....n...............24.4
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools............................................10 .....n.................5.5 Quality of math and science education...................................8 .....n.................5.2 Extent of staff training ...........................................................10 .....n.................5.1 Local availability of specialized research and training services ...............................................................4 .....n.................6.0 Brain drain and ease of hiring foreign labor ............................8 .....n.................4.9 Tertiary enrollment ................................................................20 .....n...............60.3
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................14 .....n.................6.2 Distortive effect of taxes and subsidies on competition .......13 .....n.................4.8 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes ..................................................................19 .....n .............164.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................14 .....n.................5.9 Quality of telephone infrastructure........................................16 .....n.................6.6 Internet users .........................................................................2 .....n...............86.6 Broadband Internet subscribers ..............................................3 .....n...............35.1 Telephone lines......................................................................15 .....n...............44.3 Mobile telephone subscribers...............................................55 .....n ...............41.7
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................25 .....n.................5.6
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Netherlands
191
2: Country/Economy Profiles
Netherlands Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................45 .....n.................6.2 Cost of closing a business ......................................................5 .....n.................4.0 Time to start a business........................................................15 .....n ...............10.0 Time to register property ........................................................5 .....n.................5.0 Time to close a business.......................................................11 .....n .................1.1
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................30 .....n.................0.7 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................14 .....n.................6.2 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................5 .....n...............18.6
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................35 .....n.................2.0 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles ...........................10 .....n.................6.2 Financial Stress Index ...........................................................37 .....n ...............13.5 Tier 1 capital ratio..................................................................36 .....n .................7.6 Output loss during banking crises.........................................38 .....n...............50.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator ....................................44 .....n.................4.4 Manageability of public debt ................................................42 .....n ...............61.0 Credit default swap spreads ...................................................8 .....n ...............47.3
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
192
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n.............200.8 Central bank assets to GDP ..................................................37 .....n.................0.2 Financial system deposits to GDP ..........................................6 .....n .............122.8 M2 to GDP ............................................................................10 .....n .............139.1 Private credit to GDP...............................................................4 .....n .............192.6 Bank deposits to GDP .............................................................7 .....n .............122.0 Money market instruments to GDP ........................................2 .....n................11.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................1 .....n.................6.5 Bank overhead costs .............................................................50 .....n.................5.3 Public ownership of banks ....................................................21 .....n.................2.3 Bank operating costs to assets .............................................12 .....n .................1.1 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage ..............................................12 .....n...............83.5 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................27 .....n.................0.7 IPO proceeds amount ...........................................................38 .....n.................0.1 Share of world IPOs ..............................................................33 .....n.................0.3
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................3.4 M&A transaction value to GDP ...............................................1 .....n ...............14.2 Share of total number of M&A deals ....................................17 .....n .................1.3
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................16 .....n.................4.2 Non–life insurance density .....................................................1 .....n.................9.4 Real growth of direct insurance premiums ...........................30 .....n.................0.0 Life insurance coverage ........................................................22 .....n.................0.7 Non–life insurance coverage..................................................11 .....n .................1.5 Relative value-added of insurance to GDP ............................18 .....n .................1.6
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ..............................................................3 .....n.................5.0 Share of total number of securitization deals........................17 .....n.................0.8
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Netherlands
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................27 .....n.................0.2 Outright forward foreign exchange turnover .........................13 .....n .................1.3 Foreign exchange swap turnover...........................................17 .....n.................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 .....n.................0.3 Interest rate derivatives turnover: Swaps................................8 .....n .................1.6 Interest rate derivatives turnover: Options............................16 .....n.................0.2 Foreign exchange derivatives turnover: Currency swaps ......13 .....n .................1.0 Foreign exchange derivatives turnover: Options ...................18 .....n.................0.3
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio .....................................................3 .....n.............252.2 Stock market capitalization to GDP .......................................16 .....n .............129.9 Stock market value traded to GDP..........................................3 .....n.............344.4 Number of listed companies per 10,000 people ..................n/a .........................n/a
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ..............5 .....n...............75.0 Public domestic bond market capitalization to GDP ...............8 .....n...............48.1 Private international bonds to GDP .........................................2 .....n .............149.3 Public international bonds to GDP ........................................26 .....n.................3.3 Local currency corporate bond issuance to GDP ....................6 .....n.................3.0
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
193 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................12 .....n.................6.1 Venture capital availability......................................................13 .....n.................3.7 Ease of access to credit........................................................52 .....n.................2.1 Financing through local equity market ..................................41 .....n.................3.7 Ease of access to loans.........................................................14 .....n.................3.7 Foreign direct investment to GDP.........................................55 .....n ...............–0.4 Retail access Market penetration of bank accounts ...................................12 .....n ......176,579.2 Commercial bank branches ...................................................15 .....n...............25.4 Total number of ATMs ...........................................................19 .....n...............64.1 Total number of point of sale (POS) devices...........................8 .....n..........2,343.4 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Nigeria Key indicators
Financial assets by major type, 2008 13.7%
Population (millions), 2009 .....................................................151.9
US$ bn
0.4%
GDP (US$ billions), 2009 .........................................................173.4
n n n n
38.3%
GDP (current prices) per capita, 2009 ..............................1,141.9 GDP (PPP) as share (%) of world total, 2009 ........................0.48 Compound annual growth rate of real GDP (%), 2005–09 ..4.93
Public debt securities .........17.8 Private debt securities..........0.5 Banking deposits .................62.0 Equity securities ..................49.8 Total
47.6%
130.1
Total/GDP 62.8%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................57 2.4 1
2
3
4
5
6
7
Factors, policies, and institutions
194
1st pillar: Institutional environment .........................................43
3.6
Financial sector liberalization ....................................................34 Corporate governance.................................................................52 Legal and regulatory issues .......................................................51 Contract enforcement..................................................................39
3.9 3.8 3.0 3.9
2nd pillar: Business environment .............................................56
2.8
Human capital ...............................................................................55 Taxes...............................................................................................57 Infrastructure ................................................................................54 Cost of doing business ................................................................54
3.2 2.3 2.8 3.0
3rd pillar: Financial stability......................................................56
3.1
Currency stability........................................................................n/a Banking system stability............................................................n/a Risk of sovereign debt crisis ......................................................51
n/a n/a 3.1 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......................................53
2.4
Size index .......................................................................................50 Efficiency index.............................................................................41 Financial information disclosure................................................56
1.2 4.4 1.0
5th pillar: Non-banking financial services .............................55
1.3
IPO activity.....................................................................................35 M&A activity..................................................................................56 Insurance .......................................................................................56 Securitization.................................................................................49
1.6 1.0 1.2 1.2
6th pillar: Financial markets......................................................55
1.2
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................52 Bond market development ........................................................n/a
n/a n/a 1.2 n/a 1
Financial access 7th pillar: Financial access........................................................52
2.6
Commercial access......................................................................31 Retail access.................................................................................45
3.5 1.6 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................47 .....n ...............–0.5 Commitments to WTO agreement on trade in services.......30 .....n ...............51.1 Domestic financial sector liberalization .................................28 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................50 .....n.................3.7 Efficacy of corporate boards .................................................50 .....n.................4.1 Reliance on professional management .................................40 .....n.................4.3 Willingness to delegate.........................................................30 .....n.................4.0 Strength of auditing and reporting standards .......................57 .....n.................3.4 Ethical behavior of firms........................................................54 .....n.................3.1 Protection of minority shareholders’ interests ......................51 .....n.................3.6
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................30 .....n.................3.1 Centralization of economic policymaking ..............................42 .....n.................2.8 Regulation of securities exchanges.......................................43 .....n.................4.0 Property rights.......................................................................53 .....n.................3.3 Intellectual property protection .............................................47 .....n.................2.9 Diversion of public funds.......................................................53 .....n.................2.2 Public trust of politicians .......................................................51 .....n .................1.8 Corruption perceptions index ................................................51 .....n.................2.5 Strength of legal rights index ................................................12 .....n.................8.0 Central bank transparency.....................................................40 .....n.................4.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................36 .....n.................3.3 Judicial independence ...........................................................43 .....n.................3.5 Irregular payments in judicial decisions.................................41 .....n.................3.5 Time to enforce a contract ....................................................24 .....n .............457.0 Number of procedures to enforce a contract .......................43 .....n...............39.0 Strength of investor protection index....................................27 .....n.................5.7 Cost of enforcing contracts...................................................46 .....n...............32.0
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................50 .....n.................3.7 Quality of math and science education.................................50 .....n.................2.9 Extent of staff training...........................................................38 .....n.................3.9 Local availability of specialized research and training services .............................................................52 .....n.................3.7 Brain drain and ease of hiring foreign labor ..........................35 .....n.................3.9 Tertiary enrollment ................................................................54 .....n ...............10.2
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................54 .....n.................3.0 Distortive effect of taxes and subsidies on competition.......43 .....n.................3.9 Marginal tax variation ............................................................40 .....n...............20.3 Time to pay taxes..................................................................55 .....n.............938.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................56 .....n.................2.4 Quality of telephone infrastructure .......................................37 .....n.................6.1 Internet users .......................................................................49 .....n ...............15.9 Broadband Internet subscribers ............................................56 .....n.................0.0 Telephone lines......................................................................56 .....n.................0.9 Mobile telephone subscribers...............................................27 .....n .............110.2
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................57 .....n ...............76.7
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Nigeria
195
2: Country/Economy Profiles
Nigeria Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................57 .....n...............20.9 Cost of closing a business ....................................................47 .....n...............22.0 Time to start a business........................................................44 .....n ...............31.0 Time to register property ......................................................51 .....n...............82.0 Time to close a business ......................................................25 .....n.................2.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) ....................n/a .........................n/a External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP.............................................4 .....n ...............16.9 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
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................20 .....n .................1.3 Financial strengths indicator.................................................n/a .........................n/a Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................53 .....n .................7.0 Foreign currency sovereign rating .........................................53 .....n .................7.0 Aggregate macroprudential indicator ....................................46 .....n.................4.0 Manageability of public debt ..................................................4 .....n ...............13.1 Credit default swap spreads.................................................n/a .........................n/a
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
196
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............33.1 Central bank assets to GDP ..................................................24 .....n .................1.3 Financial system deposits to GDP ........................................52 .....n...............20.3 M2 to GDP ............................................................................48 .....n...............39.8 Private credit to GDP.............................................................49 .....n...............24.6 Bank deposits to GDP ...........................................................55 .....n...............20.8 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator.............................................15 .....n.................4.7 Bank overhead costs .............................................................40 .....n.................3.6 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................55 .....n.................5.8 Non-performing bank loans to total loans .............................34 .....n.................6.6
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................49 .....n.................0.0 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................36 .....n.................0.3 IPO proceeds amount ...........................................................27 .....n.................0.3 Share of world IPOs ..............................................................33 .....n.................0.3
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.0 M&A transaction value to GDP .............................................56 .....n.................0.9 Share of total number of M&A deals ....................................52 .....n.................0.0
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................53 .....n.................0.1 Non–life insurance density ...................................................53 .....n.................0.5 Real growth of direct insurance premiums ..........................n/a .........................n/a Life insurance coverage ........................................................44 .....n.................0.1 Non–life insurance coverage .................................................26 .....n.................0.7 Relative value-added of insurance to GDP ............................53 .....n.................0.4
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................49 .....n.................0.4 Share of total number of securitization deals .......................44 .....n.................0.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Nigeria
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 ...................................................44 .....n ...............19.4 Stock market capitalization to GDP ......................................n/a .........................n/a Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people...................48 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................52 .....n.................0.3 Public international bonds to GDP ........................................51 .....n.................0.0 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
197 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................47 .....n.................4.0 Venture capital availability......................................................55 .....n.................2.0 Ease of access to credit........................................................41 .....n.................2.6 Financing through local equity market ..................................28 .....n.................4.0 Ease of access to loans ........................................................55 .....n.................2.0 Foreign direct investment to GDP...........................................5 .....n................11.7 Retail access Market penetration of bank accounts ...................................34 .....n ........46,121.0 Commercial bank branches ...................................................45 .....n.................6.4 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .....................................................................16 .....n.................3.0
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Norway Key indicators
Financial assets by major type, 2008 14.0%
Population (millions), 2009 .........................................................4.8
US$ bn
28.2%
GDP (US$ billions), 2009 .........................................................383.0
n n n n
GDP (current prices) per capita, 2009 ............................79,085.0 20.8%
GDP (PPP) as share (%) of world total, 2009 ........................0.37 Compound annual growth rate of real GDP (%), 2005–09 ..1.05
Public debt securities .......253.0 Private debt securities......332.0 Banking deposits ...............187.2 Equity securities ................125.9 Total
898.0
37.0%
Total/GDP 199.2%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................15 4.3 1
2
3
4
5
6
7
Factors, policies, and institutions
198
1st pillar: Institutional environment ...........................................3
5.9
Financial sector liberalization ....................................................17 Corporate governance...................................................................2 Legal and regulatory issues .......................................................10 Contract enforcement....................................................................3
6.7 5.8 5.1 6.0
2nd pillar: Business environment ...............................................9
5.6
Human capital ...............................................................................10 Taxes...............................................................................................17 Infrastructure ................................................................................19 Cost of doing business ..................................................................2
5.3 5.2 5.3 6.7
3rd pillar: Financial stability........................................................8
5.4
Currency stability........................................................................n/a Banking system stability..............................................................24 Risk of sovereign debt crisis ........................................................8
n/a 4.8 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......................................16
4.3
Size index .......................................................................................30 Efficiency index...............................................................................6 Financial information disclosure..................................................3
2.7 6.1 4.0
5th pillar: Non-banking financial services .............................34
2.1
IPO activity.....................................................................................36 M&A activity..................................................................................19 Insurance .......................................................................................42 Securitization.................................................................................39
1.6 3.0 2.2 1.7
6th pillar: Financial markets......................................................26
2.6
Foreign exchange markets .........................................................19 Derivatives markets .....................................................................21 Equity market development ........................................................17 Bond market development..........................................................27
1.7 2.5 3.7 2.2 1
Financial access 7th pillar: Financial access........................................................11
4.3
Commercial access......................................................................14 Retail access...................................................................................9
3.9 4.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services .......19 .....n...............60.1 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................31 .....n.................4.3 Efficacy of corporate boards ...................................................5 .....n.................5.5 Reliance on professional management ...................................2 .....n.................6.3 Willingness to delegate...........................................................2 .....n.................5.9 Strength of auditing and reporting standards .........................6 .....n.................6.1 Ethical behavior of firms..........................................................6 .....n.................6.4 Protection of minority shareholders’ interests ........................3 .....n.................5.8
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................20 .....n.................3.4 Centralization of economic policymaking ..............................30 .....n.................3.1 Regulation of securities exchanges.........................................4 .....n.................5.7 Property rights.........................................................................8 .....n.................6.1 Intellectual property protection .............................................13 .....n.................5.6 Diversion of public funds.........................................................7 .....n.................5.9 Public trust of politicians .........................................................3 .....n.................5.6 Corruption perceptions index ..................................................9 .....n.................8.6 Strength of legal rights index ................................................19 .....n .................7.0 Central bank transparency.....................................................25 .....n.................8.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ........................................6 .....n.................5.2 Judicial independence ...........................................................11 .....n.................6.2 Irregular payments in judicial decisions...................................5 .....n.................6.5 Time to enforce a contract ......................................................3 .....n.............280.0 Number of procedures to enforce a contract .......................24 .....n...............33.0 Strength of investor protection index....................................15 .....n.................6.7 Cost of enforcing contracts.....................................................1 .....n.................9.9
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools............................................16 .....n.................5.2 Quality of math and science education.................................35 .....n.................4.1 Extent of staff training.............................................................3 .....n.................5.5 Local availability of specialized research and training services .............................................................14 .....n.................5.5 Brain drain and ease of hiring foreign labor...........................13 .....n.................4.7 Tertiary enrollment ..................................................................7 .....n ...............76.2
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................5 .....n.................6.6 Distortive effect of taxes and subsidies on competition .......14 .....n.................4.8 Marginal tax variation ............................................................32 .....n ...............12.1 Time to pay taxes....................................................................8 .....n ...............87.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................26 .....n.................5.1 Quality of telephone infrastructure .........................................1 .....n .................7.0 Internet users .........................................................................5 .....n...............82.6 Broadband Internet subscribers ..............................................5 .....n...............33.3 Telephone lines......................................................................18 .....n...............39.8 Mobile telephone subscribers...............................................53 .....n...............49.7
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business....................................................14 .....n .................1.9
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Norway
199
2: Country/Economy Profiles
Norway Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................21 .....n.................2.5 Cost of closing a business ......................................................1 .....n .................1.0 Time to start a business ........................................................11 .....n .................7.0 Time to register property ........................................................4 .....n.................3.0 Time to close a business ........................................................5 .....n.................0.9
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................12 .....n.................3.3 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP.............................................6 .....n ...............15.5 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................20 .....n .................1.3 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio..................................................................31 .....n.................8.9 Output loss during banking crises.........................................24 .....n.................6.4
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator ....................................33 .....n.................4.9 Manageability of public debt ................................................33 .....n...............49.2 Credit default swap spreads ...................................................1 .....n...............25.9
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
200
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............83.3 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................36 .....n...............50.6 M2 to GDP ............................................................................35 .....n...............63.5 Private credit to GDP .............................................................17 .....n .............102.0 Bank deposits to GDP ..........................................................n/a .........................n/a Money market instruments to GDP ......................................13 .....n .................1.9
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................35 .....n.................4.1 Bank overhead costs ...............................................................6 .....n .................1.1 Public ownership of banks ....................................................31 .....n .................7.9 Bank operating costs to assets ...............................................7 .....n.................0.9 Non-performing bank loans to total loans ...............................1 .....n .................1.1
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....n .............100.0 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................31 .....n.................0.5 IPO proceeds amount ...........................................................30 .....n.................0.2 Share of world IPOs ..............................................................24 .....n.................0.5
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n .................1.0 M&A transaction value to GDP .............................................12 .....n.................8.4 Share of total number of M&A deals ....................................22 .....n.................0.8
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................24 .....n.................2.6 Non–life insurance density ...................................................26 .....n.................2.1 Real growth of direct insurance premiums ...........................37 .....n.................0.0 Life insurance coverage ........................................................45 .....n.................0.1 Non–life insurance coverage .................................................50 .....n.................0.1 Relative value-added of insurance to GDP ............................35 .....n.................0.9
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................37 .....n .................1.0 Share of total number of securitization deals .......................34 .....n.................0.2
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Norway
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................25 .....n.................0.3 Outright forward foreign exchange turnover .........................17 .....n.................0.6 Foreign exchange swap turnover...........................................14 .....n .................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 .....n .................1.6 Interest rate derivatives turnover: Swaps..............................25 .....n.................0.1 Interest rate derivatives turnover: Options............................25 .....n.................0.0 Foreign exchange derivatives turnover: Currency swaps ......26 .....n.................0.1 Foreign exchange derivatives turnover: Options ...................29 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................14 .....n .............139.0 Stock market capitalization to GDP .......................................26 .....n .............100.1 Stock market value traded to GDP ........................................16 .....n .............146.8 Number of listed companies per 10,000 people ..................n/a .........................n/a
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............14 .....n...............30.3 Public domestic bond market capitalization to GDP .............34 .....n ...............19.0 Private international bonds to GDP .......................................13 .....n ...............47.0 Public international bonds to GDP ........................................51 .....n.................0.0 Local currency corporate bond issuance to GDP ..................30 .....n.................0.3
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
201 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication ...............................................8 .....n.................6.1 Venture capital availability........................................................2 .....n.................4.3 Ease of access to credit........................................................32 .....n.................2.8 Financing through local equity market ..................................12 .....n.................4.6 Ease of access to loans ..........................................................5 .....n.................4.4 Foreign direct investment to GDP.........................................54 .....n.................0.0 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches .....................................................9 .....n...............34.5 Total number of ATMs...........................................................21 .....n...............56.8 Total number of point of sale (POS) devices...........................5 .....n ..........3,014.5 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Pakistan Key indicators
Financial assets by major type, 2008 14.8%
Population (millions), 2009 .....................................................163.8
US$ bn
GDP (US$ billions), 2009 .........................................................166.5 GDP (current prices) per capita, 2009 ..............................1,016.7 GDP (PPP) as share (%) of world total, 2009 ........................0.63
55.5% 29.3%
Compound annual growth rate of real GDP (%), 2005–09 ..3.13
n n n n
Public debt securities .........88.4 Private debt securities..........0.6 Banking deposits .................46.7 Equity securities ..................23.5 Total
159.1
0.4%
Total/GDP 96.7%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................54 2.6 1
2
3
4
5
6
7
Factors, policies, and institutions
202
1st pillar: Institutional environment .........................................54
2.9
Financial sector liberalization ....................................................55 Corporate governance.................................................................50 Legal and regulatory issues .......................................................50 Contract enforcement..................................................................50
1.6 3.8 3.0 3.3
2nd pillar: Business environment .............................................50
3.6
Human capital ...............................................................................56 Taxes...............................................................................................54 Infrastructure ................................................................................52 Cost of doing business ................................................................31
3.2 3.4 2.8 5.0
3rd pillar: Financial stability......................................................52
3.7
Currency stability..........................................................................27 Banking system stability..............................................................23 Risk of sovereign debt crisis ......................................................57
4.0 4.9 1.7 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......................................48
2.7
Size index .......................................................................................41 Efficiency index.............................................................................43 Financial information disclosure................................................48
1.7 4.3 1.3
5th pillar: Non-banking financial services .............................56
1.2
IPO activity.....................................................................................51 M&A activity..................................................................................53 Insurance .......................................................................................53 Securitization.................................................................................43
1.1 1.1 1.3 1.6
6th pillar: Financial markets......................................................36
1.9
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................40 Bond market development..........................................................36
n/a n/a 1.9 1.9 1
Financial access 7th pillar: Financial access........................................................55
2.3
Commercial access......................................................................39 Retail access.................................................................................47
3.3 1.3 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................49 .....n ...............–1.1 Commitments to WTO agreement on trade in services.......49 .....n.................6.6 Domestic financial sector liberalization .................................50 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................53 .....n.................3.5 Efficacy of corporate boards .................................................54 .....n.................4.1 Reliance on professional management .................................47 .....n.................4.0 Willingness to delegate.........................................................46 .....n.................3.3 Strength of auditing and reporting standards .......................47 .....n.................4.2 Ethical behavior of firms........................................................49 .....n.................3.4 Protection of minority shareholders’ interests ......................47 .....n.................3.9
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................24 .....n.................3.2 Centralization of economic policymaking ..............................27 .....n.................3.2 Regulation of securities exchanges.......................................40 .....n.................4.0 Property rights.......................................................................50 .....n.................3.6 Intellectual property protection .............................................44 .....n.................3.1 Diversion of public funds.......................................................43 .....n.................3.0 Public trust of politicians .......................................................40 .....n.................2.3 Corruption perceptions index ................................................52 .....n.................2.4 Strength of legal rights index ................................................30 .....n.................6.0 Central bank transparency.....................................................42 .....n.................3.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................45 .....n.................2.9 Judicial independence ...........................................................39 .....n.................3.6 Irregular payments in judicial decisions.................................46 .....n.................3.2 Time to enforce a contract ....................................................52 .....n .............976.0 Number of procedures to enforce a contract .......................54 .....n ...............47.0 Strength of investor protection index....................................18 .....n.................6.3 Cost of enforcing contracts...................................................27 .....n...............23.8
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................44 .....n.................4.0 Quality of math and science education.................................41 .....n.................3.5 Extent of staff training...........................................................55 .....n.................3.3 Local availability of specialized research and training services .............................................................54 .....n.................3.5 Brain drain and ease of hiring foreign labor ..........................41 .....n.................3.7 Tertiary enrollment ................................................................57 .....n.................5.2
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................55 .....n.................2.8 Distortive effect of taxes and subsidies on competition.......38 .....n.................4.0 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes..................................................................51 .....n.............560.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................49 .....n.................3.5 Quality of telephone infrastructure .......................................49 .....n.................5.5 Internet users .......................................................................52 .....n ...............10.5 Broadband Internet subscribers ............................................55 .....n.................0.1 Telephone lines......................................................................55 .....n.................2.5 Mobile telephone subscribers...............................................23 .....n .............115.2
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................26 .....n.................5.8
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Pakistan
203
2: Country/Economy Profiles
Pakistan Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................48 .....n .................7.2 Cost of closing a business ......................................................5 .....n.................4.0 Time to start a business........................................................32 .....n...............20.0 Time to register property ......................................................43 .....n...............50.0 Time to close a business ......................................................33 .....n.................2.8
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................29 .....n.................0.7 External vulnerability indicator...............................................12 .....n...............33.7 Current account balance to GDP...........................................52 .....n ...............–6.3 Dollarization vulnerability indicator ........................................34 .....n ...............37.8 External debt to GDP (developing economies) .....................15 .....n ...............31.5 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises....................................................1 .....n.................0.0 Financial strengths indicator..................................................48 .....n.................2.0 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index ...........................................................28 .....n.................6.2 Tier 1 capital ratio ..................................................................15 .....n................11.5 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................55 .....n.................5.0 Foreign currency sovereign rating .........................................55 .....n.................5.0 Aggregate macroprudential indicator ....................................55 .....n.................2.9 Manageability of public debt ................................................31 .....n...............48.0 Credit default swap spreads .................................................50 .....n.............718.1
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
204
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............39.9 Central bank assets to GDP ....................................................9 .....n.................6.0 Financial system deposits to GDP ........................................43 .....n...............36.0 M2 to GDP ............................................................................46 .....n...............40.6 Private credit to GDP.............................................................46 .....n ...............27.6 Bank deposits to GDP ...........................................................45 .....n...............35.3 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................50 .....n.................3.0 Bank overhead costs .............................................................24 .....n.................2.1 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................42 .....n.................2.8 Non-performing bank loans to total loans .............................37 .....n ...............12.2
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................48 .....n .................1.5 Public credit registry coverage ..............................................16 .....n.................5.6
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................51 .....n.................0.0 IPO proceeds amount ...........................................................53 .....n.................0.0 Share of world IPOs ..............................................................33 .....n.................0.3
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.0 M&A transaction value to GDP .............................................52 .....n .................1.1 Share of total number of M&A deals ....................................48 .....n.................0.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................47 .....n.................0.3 Non–life insurance density ...................................................55 .....n.................0.4 Real growth of direct insurance premiums ..........................n/a .........................n/a Life insurance coverage ........................................................28 .....n.................0.5 Non–life insurance coverage .................................................27 .....n.................0.6 Relative value-added of insurance to GDP ............................45 .....n.................0.6
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................43 .....n.................0.7 Share of total number of securitization deals .......................31 .....n.................0.2
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Pakistan
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 ...................................................23 .....n...............78.4 Stock market capitalization to GDP .......................................42 .....n...............45.1 Stock market value traded to GDP........................................26 .....n...............46.3 Number of listed companies per 10,000 people...................36 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............39 .....n.................0.0 Public domestic bond market capitalization to GDP .............27 .....n ...............27.6 Private international bonds to GDP .......................................51 .....n.................0.4 Public international bonds to GDP ........................................40 .....n .................1.1 Local currency corporate bond issuance to GDP ..................20 .....n .................1.4
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
205 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................49 .....n.................3.9 Venture capital availability......................................................33 .....n.................2.8 Ease of access to credit........................................................22 .....n.................3.4 Financing through local equity market ..................................30 .....n.................3.9 Ease of access to loans ........................................................25 .....n.................3.3 Foreign direct investment to GDP.........................................36 .....n.................3.3 Retail access Market penetration of bank accounts ...................................38 .....n........22,949.3 Commercial bank branches ...................................................41 .....n.................8.7 Total number of ATMs...........................................................46 .....n.................4.1 Total number of point of sale (POS) devices.........................35 .....n...............49.0 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................17 .....n.................2.6
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Panama Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .........................................................3.5
17.8%
US$ bn
28.1%
GDP (US$ billions), 2009 ...........................................................24.7 GDP (current prices) per capita, 2009 ..............................7,132.7 GDP (PPP) as share (%) of world total, 2009 ........................0.06
3.1%
Compound annual growth rate of real GDP (%), 2005–09 ..6.65
n n n n
Public debt securities .........10.3 Private debt securities..........1.1 Banking deposits .................18.8 Equity securities ....................6.6 Total
36.8
51.0%
Total/GDP 158.8%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................39 3.2 1
2
3
4
5
6
7
Factors, policies, and institutions
206
1st pillar: Institutional environment .........................................32
4.3
Financial sector liberalization ....................................................19 Corporate governance.................................................................29 Legal and regulatory issues .......................................................38 Contract enforcement..................................................................55
6.2 4.4 3.4 3.1
2nd pillar: Business environment .............................................40
4.1
Human capital ...............................................................................42 Taxes...............................................................................................42 Infrastructure ................................................................................44 Cost of doing business ................................................................24
3.7 4.2 3.3 5.3
3rd pillar: Financial stability......................................................44
4.1
Currency stability..........................................................................30 Banking system stability..............................................................46 Risk of sovereign debt crisis ......................................................35
3.9 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......................................25
4.0
Size index .......................................................................................18 Efficiency index.............................................................................27 Financial information disclosure................................................31
3.6 5.3 2.4
5th pillar: Non-banking financial services .............................46
1.7
IPO activity...................................................................................n/a M&A activity..................................................................................51 Insurance .......................................................................................31 Securitization.................................................................................50
n/a 1.1 2.7 1.2
6th pillar: Financial markets......................................................56
1.1
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................54 Bond market development ........................................................n/a
n/a n/a 1.1 n/a 1
Financial access 7th pillar: Financial access........................................................32
3.3
Commercial access........................................................................5 Retail access.................................................................................39
4.5 2.0 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................25 .....n.................2.5 Commitments to WTO agreement on trade in services.......23 .....n...............53.0 Domestic financial sector liberalization .................................23 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................35 .....n.................4.2 Efficacy of corporate boards .................................................31 .....n.................4.6 Reliance on professional management .................................44 .....n.................4.1 Willingness to delegate.........................................................27 .....n.................4.0 Strength of auditing and reporting standards .......................30 .....n.................5.0 Ethical behavior of firms........................................................31 .....n.................4.2 Protection of minority shareholders’ interests ......................27 .....n.................4.6
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................14 .....n.................3.6 Centralization of economic policymaking ..............................51 .....n.................2.2 Regulation of securities exchanges.......................................42 .....n.................4.0 Property rights.......................................................................30 .....n.................4.7 Intellectual property protection .............................................29 .....n.................4.0 Diversion of public funds.......................................................36 .....n.................3.2 Public trust of politicians .......................................................43 .....n.................2.1 Corruption perceptions index ................................................41 .....n.................3.4 Strength of legal rights index ................................................30 .....n.................6.0 Central bank transparency....................................................n/a .........................n/a
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................51 .....n.................2.4 Judicial independence ...........................................................55 .....n.................2.5 Irregular payments in judicial decisions.................................47 .....n.................3.2 Time to enforce a contract ....................................................47 .....n.............686.0 Number of procedures to enforce a contract........................19 .....n ...............31.0 Strength of investor protection index....................................44 .....n.................4.7 Cost of enforcing contracts...................................................54 .....n...............50.0
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................55 .....n.................3.5 Quality of math and science education.................................55 .....n.................2.6 Extent of staff training...........................................................30 .....n.................4.2 Local availability of specialized research and training services .............................................................41 .....n.................4.2 Brain drain and ease of hiring foreign labor ..........................36 .....n.................3.9 Tertiary enrollment ................................................................32 .....n...............45.0
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................38 .....n.................4.5 Distortive effect of taxes and subsidies on competition.......35 .....n.................4.0 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes..................................................................48 .....n.............482.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................34 .....n.................4.3 Quality of telephone infrastructure .......................................30 .....n.................6.4 Internet users .......................................................................40 .....n ...............27.5 Broadband Internet subscribers ............................................36 .....n.................5.8 Telephone lines......................................................................45 .....n ...............15.4 Mobile telephone subscribers...............................................47 .....n...............72.7
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................37 .....n ...............10.3
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Panama
207
2: Country/Economy Profiles
Panama Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................20 .....n.................2.4 Cost of closing a business ....................................................39 .....n...............18.0 Time to start a business........................................................19 .....n ...............12.0 Time to register property ......................................................29 .....n...............32.0 Time to close a business ......................................................30 .....n.................2.5
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................28 .....n.................0.9 External vulnerability indicator.................................................9 .....n...............30.1 Current account balance to GDP...........................................53 .....n ...............–6.3 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................27 .....n...............49.1 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................16 .....n .................1.0 Financial strengths indicator..................................................41 .....n.................3.0 Aggregate measure of real estate bubbles.............................3 .....n.................6.7 Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio..................................................................39 .....n.................6.9 Output loss during banking crises.........................................46 .....n...............85.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................41 .....n................11.0 Foreign currency sovereign rating .........................................36 .....n................11.0 Aggregate macroprudential indicator ......................................1 .....n.................6.0 Manageability of public debt ................................................26 .....n...............44.4 Credit default swap spreads .................................................27 .....n .............130.1
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
208
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............83.9 Central bank assets to GDP ....................................................4 .....n ...............12.0 Financial system deposits to GDP ........................................19 .....n...............82.9 M2 to GDP ............................................................................20 .....n...............88.2 Private credit to GDP.............................................................27 .....n...............80.6 Bank deposits to GDP ...........................................................20 .....n...............83.0 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator.............................................10 .....n.................5.1 Bank overhead costs .............................................................47 .....n.................4.7 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................49 .....n.................3.7 Non-performing bank loans to total loans ...............................4 .....n .................1.4
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................23 .....n...............45.9 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share .................................................................n/a .........................n/a IPO proceeds amount ..........................................................n/a .........................n/a Share of world IPOs .............................................................n/a .........................n/a
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 ................................................................56 .....n.................0.0 M&A transaction value to GDP .............................................50 .....n .................1.6 Share of total number of M&A deals ....................................56 .....n.................0.0
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................35 .....n .................1.0 Non–life insurance density ...................................................21 .....n.................2.5 Real growth of direct insurance premiums .............................4 .....n.................0.2 Life insurance coverage ........................................................51 .....n.................0.0 Non–life insurance coverage .................................................55 .....n.................0.1 Relative value-added of insurance to GDP ............................39 .....n.................0.8
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................48 .....n.................0.4 Share of total number of securitization deals .......................55 .....n.................0.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Panama
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 ...................................................49 .....n .................1.4 Stock market capitalization to GDP .......................................47 .....n...............28.9 Stock market value traded to GDP........................................43 .....n.................0.4 Number of listed companies per 10,000 people...................29 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................36 .....n.................4.6 Public international bonds to GDP ..........................................1 .....n...............34.1 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
209 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................16 .....n.................6.0 Venture capital availability......................................................20 .....n.................3.3 Ease of access to credit..........................................................6 .....n.................4.1 Financing through local equity market ..................................20 .....n.................4.2 Ease of access to loans.........................................................11 .....n.................4.0 Foreign direct investment to GDP...........................................9 .....n.................9.7 Retail access Market penetration of bank accounts ...................................35 .....n ........41,192.2 Commercial bank branches ...................................................22 .....n...............18.5 Total number of ATMs...........................................................33 .....n...............40.6 Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .....................................................................19 .....n .................1.6
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Peru Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .......................................................29.1
US$ bn
23.6%
GDP (US$ billions), 2009 .........................................................126.8 GDP (current prices) per capita, 2009 ..............................4,356.0
42.9%
GDP (PPP) as share (%) of world total, 2009 ........................0.36
7.1%
Compound annual growth rate of real GDP (%), 2005–09 ..5.38
n n n n
Public debt securities .........30.6 Private debt securities..........9.2 Banking deposits .................34.3 Equity securities ..................55.6 Total
129.8
26.4%
Total/GDP 101.9%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................48 3.0 1
2
3
4
5
6
7
Factors, policies, and institutions
210
1st pillar: Institutional environment .........................................41
3.7
Financial sector liberalization ....................................................36 Corporate governance.................................................................38 Legal and regulatory issues .......................................................44 Contract enforcement..................................................................48
3.8 4.2 3.2 3.4
2nd pillar: Business environment .............................................47
3.8
Human capital ...............................................................................45 Taxes...............................................................................................46 Infrastructure ................................................................................48 Cost of doing business ................................................................42
3.7 4.0 3.0 4.6
3rd pillar: Financial stability......................................................20
4.8
Currency stability..........................................................................26 Banking system stability..............................................................18 Risk of sovereign debt crisis ......................................................27
4.1 5.1 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......................................47
2.7
Size index .......................................................................................52 Efficiency index.............................................................................46 Financial information disclosure................................................24
1.1 4.2 3.1
5th pillar: Non-banking financial services .............................48
1.6
IPO activity.....................................................................................45 M&A activity..................................................................................49 Insurance .......................................................................................46 Securitization.................................................................................33
1.2 1.2 2.1 2.0
6th pillar: Financial markets......................................................51
1.4
Foreign exchange markets .........................................................43 Derivatives markets....................................................................n/a Equity market development ........................................................44 Bond market development..........................................................42
1.0 n/a 1.7 1.5 1
Financial access 7th pillar: Financial access........................................................44
2.9
Commercial access......................................................................27 Retail access.................................................................................35
3.6 2.2 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................32 .....n.................2.5 Commitments to WTO agreement on trade in services.......46 .....n...............26.5 Domestic financial sector liberalization .................................35 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................46 .....n.................4.0 Efficacy of corporate boards .................................................27 .....n.................4.7 Reliance on professional management .................................36 .....n.................4.5 Willingness to delegate.........................................................40 .....n.................3.6 Strength of auditing and reporting standards .......................35 .....n.................4.8 Ethical behavior of firms........................................................41 .....n.................3.6 Protection of minority shareholders’ interests ......................34 .....n.................4.4
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................45 .....n.................2.7 Centralization of economic policymaking ..............................26 .....n.................3.3 Regulation of securities exchanges.......................................54 .....n.................3.4 Property rights.......................................................................48 .....n.................3.8 Intellectual property protection .............................................55 .....n.................2.6 Diversion of public funds.......................................................42 .....n.................3.1 Public trust of politicians .......................................................48 .....n .................1.9 Corruption perceptions index ................................................37 .....n.................3.7 Strength of legal rights index ................................................19 .....n .................7.0 Central bank transparency.....................................................25 .....n.................8.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................56 .....n .................1.9 Judicial independence ...........................................................53 .....n.................2.6 Irregular payments in judicial decisions.................................55 .....n.................2.4 Time to enforce a contract ....................................................23 .....n.............428.0 Number of procedures to enforce a contract .......................48 .....n ...............41.0 Strength of investor protection index....................................15 .....n.................6.7 Cost of enforcing contracts...................................................50 .....n...............35.7
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................26 .....n.................4.6 Quality of math and science education.................................56 .....n.................2.5 Extent of staff training...........................................................40 .....n.................3.8 Local availability of specialized research and training services .............................................................46 .....n.................4.0 Brain drain and ease of hiring foreign labor ..........................27 .....n.................4.1 Tertiary enrollment ................................................................38 .....n...............35.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................28 .....n.................5.3 Distortive effect of taxes and subsidies on competition .......19 .....n.................4.5 Marginal tax variation ............................................................39 .....n ...............19.0 Time to pay taxes..................................................................44 .....n.............380.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................46 .....n.................3.6 Quality of telephone infrastructure .......................................29 .....n.................6.4 Internet users .......................................................................43 .....n...............24.7 Broadband Internet subscribers ............................................44 .....n.................2.5 Telephone lines......................................................................49 .....n ...............10.0 Mobile telephone subscribers...............................................46 .....n...............75.4
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................51 .....n...............24.5
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Peru
211
2: Country/Economy Profiles
Peru Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................30 .....n.................3.3 Cost of closing a business ....................................................15 .....n .................7.0 Time to start a business........................................................50 .....n ...............41.0 Time to register property ......................................................12 .....n ...............14.0 Time to close a business ......................................................39 .....n.................3.1
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................25 .....n .................1.2 External vulnerability indicator.................................................4 .....n...............22.4 Current account balance to GDP...........................................32 .....n ...............–0.8 Dollarization vulnerability indicator ........................................38 .....n...............50.8 External debt to GDP (developing economies) .....................14 .....n...............28.1 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................14 .....n.................0.8 Financial strengths indicator..................................................32 .....n.................4.0 Aggregate measure of real estate bubbles.............................2 .....n.................6.7 Financial Stress Index ...........................................................24 .....n.................5.4 Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises.........................................33 .....n ...............41.4
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................35 .....n ...............13.0 Foreign currency sovereign rating .........................................36 .....n................11.0 Aggregate macroprudential indicator ......................................7 .....n.................5.8 Manageability of public debt ................................................13 .....n...............25.0 Credit default swap spreads .................................................29 .....n .............133.6
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
212
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............20.5 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................49 .....n...............24.3 M2 to GDP ............................................................................53 .....n...............34.4 Private credit to GDP.............................................................52 .....n ...............19.8 Bank deposits to GDP ...........................................................52 .....n...............24.3 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................51 .....n.................2.7 Bank overhead costs .............................................................45 .....n.................4.4 Public ownership of banks ....................................................28 .....n.................6.6 Bank operating costs to assets .............................................52 .....n.................4.2 Non-performing bank loans to total loans .............................14 .....n.................2.7
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................31 .....n ...............31.8 Public credit registry coverage ................................................9 .....n...............23.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................46 .....n.................0.1 IPO proceeds amount ...........................................................36 .....n.................0.1 Share of world IPOs ..............................................................48 .....n.................0.1
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.1 M&A transaction value to GDP .............................................48 .....n .................1.7 Share of total number of M&A deals ....................................43 .....n.................0.2
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................43 .....n.................0.5 Non–life insurance density ...................................................48 .....n.................0.8 Real growth of direct insurance premiums ...........................10 .....n.................0.1 Life insurance coverage ........................................................42 .....n.................0.2 Non–life insurance coverage .................................................40 .....n.................0.2 Relative value-added of insurance to GDP ............................36 .....n.................0.9
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................38 .....n .................1.0 Share of total number of securitization deals........................19 .....n.................0.5
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Peru
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................43 .....n.................0.0 Outright forward foreign exchange turnover .........................36 .....n.................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.............................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 ...................................................46 .....n.................6.5 Stock market capitalization to GDP .......................................23 .....n .............109.8 Stock market value traded to GDP........................................38 .....n ...............10.0 Number of listed companies per 10,000 people...................27 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............32 .....n.................4.1 Public domestic bond market capitalization to GDP .............38 .....n ...............12.4 Private international bonds to GDP .......................................43 .....n.................2.6 Public international bonds to GDP.........................................17 .....n .................7.3 Local currency corporate bond issuance to GDP ..................35 .....n.................0.2
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
213 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................32 .....n.................4.8 Venture capital availability......................................................29 .....n.................2.9 Ease of access to credit..........................................................7 .....n.................4.0 Financing through local equity market ..................................42 .....n.................3.7 Ease of access to loans ........................................................23 .....n.................3.3 Foreign direct investment to GDP.........................................30 .....n.................3.8 Retail access Market penetration of bank accounts ...................................26 .....n........78,336.7 Commercial bank branches ...................................................44 .....n .................7.3 Total number of ATMs...........................................................41 .....n...............22.3 Total number of point of sale (POS) devices.........................34 .....n...............54.0 Microfinance institution (MFI) borrowers’ penetration rate .......................................................................6 .....n................17.6
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Philippines Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .......................................................92.2
22.8%
US$ bn
GDP (US$ billions), 2009 .........................................................161.0 GDP (current prices) per capita, 2009 ..............................1,745.6
41.7%
GDP (PPP) as share (%) of world total, 2009 ........................0.47 Compound annual growth rate of real GDP (%), 2005–09 ..3.40
n n n n
Public debt securities .........95.4 Private debt securities........12.9 Banking deposits .................68.5 Equity securities ..................52.1 Total
29.9%
228.9
5.7%
Total/GDP 136.7%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................50 3.0 1
2
3
4
5
6
7
Factors, policies, and institutions
214
1st pillar: Institutional environment .........................................42
3.6
Financial sector liberalization ....................................................31 Corporate governance.................................................................40 Legal and regulatory issues .......................................................53 Contract enforcement..................................................................54
4.4 4.2 2.8 3.1
2nd pillar: Business environment .............................................53
3.3
Human capital ...............................................................................48 Taxes...............................................................................................40 Infrastructure ................................................................................53 Cost of doing business ................................................................56
3.6 4.3 2.8 2.7
3rd pillar: Financial stability......................................................37
4.4
Currency stability..........................................................................16 Banking system stability..............................................................34 Risk of sovereign debt crisis ......................................................43
4.8 4.3 4.1 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......................................46
2.7
Size index .......................................................................................39 Efficiency index.............................................................................45 Financial information disclosure................................................51
2.0 4.3 1.2
5th pillar: Non-banking financial services .............................32
2.2
IPO activity.....................................................................................32 M&A activity..................................................................................25 Insurance .......................................................................................51 Securitization.................................................................................20
1.8 2.4 1.6 2.9
6th pillar: Financial markets......................................................37
1.9
Foreign exchange markets .........................................................41 Derivatives markets .....................................................................36 Equity market development ........................................................38 Bond market development..........................................................20
1.0 1.0 1.9 3.0 1
Financial access 7th pillar: Financial access........................................................50
2.6
Commercial access......................................................................46 Retail access.................................................................................38
3.2 2.1 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................43 .....n.................0.1 Commitments to WTO agreement on trade in services.......26 .....n ...............61.5 Domestic financial sector liberalization .................................29 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................38 .....n.................4.1 Efficacy of corporate boards .................................................28 .....n.................4.7 Reliance on professional management .................................28 .....n.................4.7 Willingness to delegate.........................................................28 .....n.................4.0 Strength of auditing and reporting standards .......................41 .....n.................4.6 Ethical behavior of firms........................................................56 .....n.................3.0 Protection of minority shareholders’ interests ......................42 .....n.................4.1
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................52 .....n.................2.5 Centralization of economic policymaking ..............................39 .....n.................2.8 Regulation of securities exchanges.......................................38 .....n.................4.1 Property rights.......................................................................49 .....n.................3.7 Intellectual property protection .............................................49 .....n.................2.8 Diversion of public funds.......................................................56 .....n.................2.0 Public trust of politicians .......................................................55 .....n .................1.6 Corruption perceptions index ................................................52 .....n.................2.4 Strength of legal rights index ................................................50 .....n.................3.0 Central bank transparency.....................................................18 .....n.................9.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................49 .....n.................2.5 Judicial independence ...........................................................51 .....n.................2.8 Irregular payments in judicial decisions.................................54 .....n.................2.6 Time to enforce a contract ....................................................50 .....n.............842.0 Number of procedures to enforce a contract .......................37 .....n ...............37.0 Strength of investor protection index....................................52 .....n.................4.0 Cost of enforcing contracts...................................................33 .....n...............26.0
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................38 .....n.................4.3 Quality of math and science education.................................47 .....n.................3.1 Extent of staff training...........................................................29 .....n.................4.3 Local availability of specialized research and training services .............................................................49 .....n.................4.0 Brain drain and ease of hiring foreign labor ..........................52 .....n.................3.3 Tertiary enrollment ................................................................45 .....n...............28.5
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................56 .....n.................2.6 Distortive effect of taxes and subsidies on competition.......33 .....n.................4.1 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes..................................................................22 .....n .............195.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................52 .....n.................3.2 Quality of telephone infrastructure .......................................47 .....n.................5.6 Internet users .......................................................................55 .....n.................6.2 Broadband Internet subscribers ............................................50 .....n .................1.2 Telephone lines......................................................................53 .....n.................4.5 Mobile telephone subscribers...............................................22 .....n .............115.3
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................53 .....n...............28.2
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Philippines
215
2: Country/Economy Profiles
Philippines Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................33 .....n.................4.3 Cost of closing a business ....................................................55 .....n...............38.0 Time to start a business........................................................54 .....n...............52.0 Time to register property ......................................................31 .....n...............33.0 Time to close a business ......................................................55 .....n.................5.7
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .......................7 .....n.................5.4 External vulnerability indicator...............................................10 .....n...............30.3 Current account balance to GDP...........................................18 .....n.................4.1 Dollarization vulnerability indicator ........................................35 .....n...............39.9 External debt to GDP (developing economies) .....................22 .....n...............39.4 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................46 .....n.................2.3 Financial strengths indicator..................................................41 .....n.................3.0 Aggregate measure of real estate bubbles...........................34 .....n.................4.5 Financial Stress Index .............................................................4 .....n.................0.4 Tier 1 capital ratio ..................................................................19 .....n................11.3 Output loss during banking crises.........................................42 .....n...............68.8
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................47 .....n ...............10.0 Foreign currency sovereign rating .........................................50 .....n.................8.0 Aggregate macroprudential indicator ......................................5 .....n.................5.8 Manageability of public debt ................................................40 .....n ...............57.3 Credit default swap spreads .................................................34 .....n .............170.9
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
216
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............32.4 Central bank assets to GDP ....................................................5 .....n.................6.9 Financial system deposits to GDP ........................................34 .....n ...............51.0 M2 to GDP ............................................................................44 .....n...............48.6 Private credit to GDP.............................................................47 .....n ...............27.1 Bank deposits to GDP ...........................................................41 .....n...............45.8 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................49 .....n.................3.0 Bank overhead costs .............................................................29 .....n.................2.5 Public ownership of banks ....................................................38 .....n ...............16.1 Bank operating costs to assets .............................................45 .....n.................3.3 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................45 .....n.................6.1 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................35 .....n.................0.3 IPO proceeds amount ...........................................................22 .....n.................0.3 Share of world IPOs ..............................................................26 .....n.................0.5
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.3 M&A transaction value to GDP .............................................18 .....n .................7.2 Share of total number of M&A deals ....................................34 .....n.................0.3
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................34 .....n .................1.0 Non–life insurance density ...................................................51 .....n.................0.5 Real growth of direct insurance premiums ...........................41 .....n.................0.0 Life insurance coverage.........................................................18 .....n.................0.9 Non–life insurance coverage .................................................30 .....n.................0.5 Relative value-added of insurance to GDP ............................40 .....n.................0.8
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................15 .....n.................2.3 Share of total number of securitization deals .......................20 .....n.................0.4
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Philippines
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................39 .....n.................0.1 Outright forward foreign exchange turnover .........................37 .....n.................0.0 Foreign exchange swap turnover ..........................................36 .....n.................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 .....n.................0.0 Interest rate derivatives turnover: Swaps..............................36 .....n.................0.0 Interest rate derivatives turnover: Options...........................n/a .........................n/a Foreign exchange derivatives turnover: Currency swaps ......33 .....n.................0.0 Foreign exchange derivatives turnover: Options ...................40 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................31 .....n...............50.9 Stock market capitalization to GDP .......................................31 .....n ...............76.3 Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people...................39 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............36 .....n .................1.0 Public domestic bond market capitalization to GDP .............21 .....n...............33.4 Private international bonds to GDP .......................................29 .....n.................6.6 Public international bonds to GDP ..........................................7 .....n ...............15.3 Local currency corporate bond issuance to GDP ..................11 .....n .................1.9
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
217 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................39 .....n.................4.5 Venture capital availability......................................................43 .....n.................2.5 Ease of access to credit..........................................................9 .....n.................3.9 Financing through local equity market ..................................37 .....n.................3.8 Ease of access to loans ........................................................36 .....n.................2.9 Foreign direct investment to GDP.........................................47 .....n.................0.9 Retail access Market penetration of bank accounts ...................................33 .....n ........49,910.4 Commercial bank branches ...................................................35 .....n................11.8 Total number of ATMs...........................................................44 .....n ...............14.2 Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .......................................................................9 .....n................11.0
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Poland Key indicators
Financial assets by major type, 2008 17.2%
Population (millions), 2009 .......................................................38.1
US$ bn
GDP (US$ billions), 2009 .........................................................430.2 GDP (current prices) per capita, 2009 ............................11,287.9
44.6%
GDP (PPP) as share (%) of world total, 2009 ........................0.98 Compound annual growth rate of real GDP (%), 2005–09 ..3.91
n n n n
37.5%
Public debt securities .......234.8 Private debt securities..........3.8 Banking deposits ...............197.2 Equity securities ..................90.2 Total
526.1
0.7%
Total/GDP 99.6%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................35 3.3 1
2
3
4
5
6
7
Factors, policies, and institutions
218
1st pillar: Institutional environment .........................................36
4.0
Financial sector liberalization ....................................................46 Corporate governance.................................................................27 Legal and regulatory issues .......................................................23 Contract enforcement..................................................................29
3.1 4.4 4.2 4.4
2nd pillar: Business environment .............................................35
4.4
Human capital ...............................................................................21 Taxes...............................................................................................30 Infrastructure ................................................................................29 Cost of doing business ................................................................50
4.6 4.7 4.4 3.9
3rd pillar: Financial stability......................................................29
4.5
Currency stability..........................................................................44 Banking system stability..............................................................20 Risk of sovereign debt crisis ......................................................26
3.3 5.0 5.3 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......................................39
3.1
Size index .......................................................................................42 Efficiency index.............................................................................39 Financial information disclosure................................................26
1.7 4.6 3.0
5th pillar: Non-banking financial services .............................27
2.4
IPO activity.......................................................................................7 M&A activity..................................................................................36 Insurance .......................................................................................21 Securitization.................................................................................51
3.7 1.6 3.0 1.1
6th pillar: Financial markets......................................................41
1.8
Foreign exchange markets .........................................................26 Derivatives markets .....................................................................25 Equity market development ........................................................43 Bond market development..........................................................28
1.2 1.8 1.7 2.2 1
Financial access 7th pillar: Financial access........................................................38
3.0
Commercial access......................................................................42 Retail access.................................................................................26
3.2 2.9 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................41 .....n.................0.1 Commitments to WTO agreement on trade in services.......39 .....n...............32.2 Domestic financial sector liberalization .................................42 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................33 .....n.................4.2 Efficacy of corporate boards .................................................35 .....n.................4.5 Reliance on professional management .................................32 .....n.................4.6 Willingness to delegate.........................................................29 .....n.................4.0 Strength of auditing and reporting standards .......................28 .....n.................5.1 Ethical behavior of firms........................................................29 .....n.................4.2 Protection of minority shareholders’ interests ......................33 .....n.................4.5
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................41 .....n.................2.7 Centralization of economic policymaking ................................8 .....n.................4.4 Regulation of securities exchanges.......................................20 .....n.................5.0 Property rights.......................................................................33 .....n.................4.6 Intellectual property protection .............................................36 .....n.................3.7 Diversion of public funds.......................................................25 .....n.................4.2 Public trust of politicians .......................................................36 .....n.................2.5 Corruption perceptions index ................................................26 .....n.................5.0 Strength of legal rights index ..................................................4 .....n.................9.0 Central bank transparency.....................................................15 .....n ...............10.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................39 .....n.................3.3 Judicial independence ...........................................................29 .....n.................4.3 Irregular payments in judicial decisions.................................29 .....n.................4.9 Time to enforce a contract ....................................................49 .....n.............830.0 Number of procedures to enforce a contract .......................39 .....n...............38.0 Strength of investor protection index....................................21 .....n.................6.0 Cost of enforcing contracts.....................................................5 .....n ...............12.0
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................39 .....n.................4.2 Quality of math and science education.................................23 .....n.................4.6 Extent of staff training...........................................................31 .....n.................4.2 Local availability of specialized research and training services .............................................................19 .....n.................5.1 Brain drain and ease of hiring foreign labor ..........................47 .....n.................3.4 Tertiary enrollment.................................................................15 .....n...............66.9
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................26 .....n.................5.5 Distortive effect of taxes and subsidies on competition.......31 .....n.................4.1 Marginal tax variation ............................................................20 .....n ...............–2.9 Time to pay taxes..................................................................45 .....n.............395.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................51 .....n.................3.4 Quality of telephone infrastructure .......................................42 .....n.................6.0 Internet users .......................................................................28 .....n...............49.0 Broadband Internet subscribers ............................................26 .....n ...............12.6 Telephone lines......................................................................29 .....n...............25.5 Mobile telephone subscribers.................................................6 .....n .............141.1
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................48 .....n................17.9
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Poland
219
2: Country/Economy Profiles
Poland Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ....................................................6 .....n.................0.5 Cost of closing a business ....................................................46 .....n...............20.0 Time to start a business........................................................45 .....n...............32.0 Time to register property ......................................................56 .....n..............197.0 Time to close a business ......................................................36 .....n.................3.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................23 .....n .................1.7 External vulnerability indicator...............................................30 .....n .............130.5 Current account balance to GDP...........................................43 .....n ...............–3.8 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................28 .....n...............58.7 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................20 .....n .................1.3 Financial strengths indicator..................................................32 .....n.................4.0 Aggregate measure of real estate bubbles ...........................19 .....n.................5.3 Financial Stress Index ...........................................................23 .....n.................5.2 Tier 1 capital ratio..................................................................20 .....n................11.1 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................31 .....n ...............15.0 Foreign currency sovereign rating .........................................30 .....n ...............14.0 Aggregate macroprudential indicator.....................................10 .....n.................5.7 Manageability of public debt ................................................30 .....n...............46.5 Credit default swap spreads .................................................33 .....n .............149.7
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
220
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............50.6 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................41 .....n...............40.4 M2 to GDP ............................................................................42 .....n...............53.3 Private credit to GDP.............................................................40 .....n...............40.6 Bank deposits to GDP ...........................................................43 .....n...............40.3 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................26 .....n.................4.5 Bank overhead costs .............................................................31 .....n.................2.5 Public ownership of banks ....................................................45 .....n...............28.0 Bank operating costs to assets .............................................43 .....n.................2.9 Non-performing bank loans to total loans .............................35 .....n .................7.0
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage ..............................................19 .....n...............68.3 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................13 .....n .................1.2 IPO proceeds amount ...........................................................16 .....n.................0.4 Share of world IPOs ................................................................5 .....n.................6.0
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.3 M&A transaction value to GDP .............................................41 .....n.................2.4 Share of total number of M&A deals ....................................21 .....n.................0.9
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................29 .....n .................1.9 Non–life insurance density ...................................................32 .....n .................1.9 Real growth of direct insurance premiums .............................2 .....n.................0.3 Life insurance coverage ........................................................20 .....n.................0.7 Non–life insurance coverage .................................................25 .....n.................0.7 Relative value-added of insurance to GDP ............................29 .....n .................1.1
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................51 .....n.................0.2 Share of total number of securitization deals .......................41 .....n.................0.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Poland
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................29 .....n.................0.2 Outright forward foreign exchange turnover .........................29 .....n.................0.1 Foreign exchange swap turnover ..........................................25 .....n.................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 ...........................................................................16 .....n.................0.4 Interest rate derivatives turnover: Swaps..............................24 .....n.................0.1 Interest rate derivatives turnover: Options............................27 .....n.................0.0 Foreign exchange derivatives turnover: Currency swaps ......25 .....n.................0.2 Foreign exchange derivatives turnover: Options ...................22 .....n.................0.1
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................35 .....n...............45.4 Stock market capitalization to GDP .......................................40 .....n ...............51.1 Stock market value traded to GDP........................................34 .....n...............25.4 Number of listed companies per 10,000 people...................22 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............39 .....n.................0.0 Public domestic bond market capitalization to GDP..............17 .....n...............38.9 Private international bonds to GDP .......................................49 .....n.................0.7 Public international bonds to GDP ..........................................9 .....n................11.4 Local currency corporate bond issuance to GDP ..................40 .....n.................0.0
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
221 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................43 .....n.................4.4 Venture capital availability......................................................36 .....n.................2.7 Ease of access to credit........................................................31 .....n.................2.9 Financing through local equity market ..................................43 .....n.................3.7 Ease of access to loans ........................................................37 .....n.................2.9 Foreign direct investment to GDP.........................................28 .....n.................3.8 Retail access Market penetration of bank accounts ...................................16 .....n ......162,641.1 Commercial bank branches ...................................................10 .....n...............32.2 Total number of ATMs...........................................................30 .....n...............49.1 Total number of point of sale (POS) devices.........................22 .....n.............666.7 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................25 .....n.................0.2
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Romania Key indicators
Financial assets by major type, 2008 17.48%
Population (millions), 2009 .......................................................21.4
US$ bn
GDP (US$ billions), 2009 .........................................................161.5
35.8%
GDP (current prices) per capita, 2009 ..............................7,542.5 GDP (PPP) as share (%) of world total, 2009 ........................0.36 Compound annual growth rate of real GDP (%), 2005–09 ..2.72
n n n n
Public debt securities .........41.1 Private debt securities.........n/a Banking deposits .................53.7 Equity securities ..................19.9 Total
46.8%
114.8
Total/GDP 56.2%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................44 3.1 1
2
3
4
5
6
7
Factors, policies, and institutions
222
1st pillar: Institutional environment .........................................26
4.5
Financial sector liberalization ....................................................20 Corporate governance.................................................................45 Legal and regulatory issues .......................................................39 Contract enforcement..................................................................33
6.2 4.1 3.4 4.3
2nd pillar: Business environment .............................................26
4.7
Human capital ...............................................................................35 Taxes...............................................................................................14 Infrastructure ................................................................................33 Cost of doing business ................................................................21
4.1 5.4 3.9 5.6
3rd pillar: Financial stability......................................................50
3.8
Currency stability..........................................................................35 Banking system stability..............................................................38 Risk of sovereign debt crisis ......................................................48
3.6 4.1 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......................................56
2.1
Size index .......................................................................................48 Efficiency index.............................................................................57 Financial information disclosure................................................34
1.3 2.9 2.2
5th pillar: Non-banking financial services .............................53
1.4
IPO activity.....................................................................................52 M&A activity..................................................................................46 Insurance .......................................................................................41 Securitization.................................................................................48
1.0 1.3 2.2 1.2
6th pillar: Financial markets......................................................40
1.8
Foreign exchange markets .........................................................42 Derivatives markets....................................................................n/a Equity market development ........................................................28 Bond market development ........................................................n/a
1.0 n/a 2.4 n/a 1
Financial access 7th pillar: Financial access........................................................40
3.0
Commercial access......................................................................41 Retail access.................................................................................27
3.2 2.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................26 .....n.................2.5 Commitments to WTO agreement on trade in services.......25 .....n...............52.7 Domestic financial sector liberalization .................................24 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................48 .....n.................3.9 Efficacy of corporate boards .................................................44 .....n.................4.4 Reliance on professional management .................................38 .....n.................4.4 Willingness to delegate.........................................................45 .....n.................3.4 Strength of auditing and reporting standards .......................42 .....n.................4.6 Ethical behavior of firms........................................................45 .....n.................3.6 Protection of minority shareholders’ interests ......................41 .....n.................4.1
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................36 .....n.................2.9 Centralization of economic policymaking ..............................31 .....n.................3.0 Regulation of securities exchanges.......................................49 .....n.................3.7 Property rights.......................................................................41 .....n.................4.2 Intellectual property protection .............................................41 .....n.................3.2 Diversion of public funds.......................................................41 .....n.................3.1 Public trust of politicians .......................................................47 .....n.................2.0 Corruption perceptions index ................................................36 .....n.................3.8 Strength of legal rights index ................................................12 .....n.................8.0 Central bank transparency.....................................................35 .....n.................6.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................47 .....n.................2.8 Judicial independence ...........................................................45 .....n.................3.5 Irregular payments in judicial decisions.................................36 .....n.................4.0 Time to enforce a contract ....................................................30 .....n .............512.0 Number of procedures to enforce a contract........................19 .....n ...............31.0 Strength of investor protection index....................................21 .....n.................6.0 Cost of enforcing contracts...................................................41 .....n...............28.9
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................49 .....n.................3.7 Quality of math and science education.................................25 .....n.................4.6 Extent of staff training...........................................................37 .....n.................3.9 Local availability of specialized research and training services .............................................................53 .....n.................3.5 Brain drain and ease of hiring foreign labor ..........................43 .....n.................3.6 Tertiary enrollment ................................................................23 .....n...............58.3
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................31 .....n.................5.1 Distortive effect of taxes and subsidies on competition.......52 .....n.................3.5 Marginal tax variation ..............................................................3 .....n .............–18.2 Time to pay taxes..................................................................25 .....n.............202.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................57 .....n.................2.4 Quality of telephone infrastructure .......................................45 .....n.................5.7 Internet users .......................................................................38 .....n...............29.0 Broadband Internet subscribers ............................................28 .....n................11.7 Telephone lines......................................................................33 .....n...............23.6 Mobile telephone subscribers.................................................5 .....n .............142.9
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................18 .....n.................2.9
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Romania
223
2: Country/Economy Profiles
Romania Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................14 .....n .................1.3 Cost of closing a business ....................................................28 .....n................11.0 Time to start a business........................................................15 .....n ...............10.0 Time to register property ......................................................42 .....n...............48.0 Time to close a business ......................................................40 .....n.................3.3
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .......................5 .....n.................6.9 External vulnerability indicator...............................................20 .....n...............68.1 Current account balance to GDP...........................................56 .....n .............–10.0 Dollarization vulnerability indicator ........................................37 .....n...............49.1 External debt to GDP (developing economies) .....................31 .....n...............68.1 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................16 .....n .................1.0 Financial strengths indicator..................................................41 .....n.................3.0 Aggregate measure of real estate bubbles...........................30 .....n.................4.7 Financial Stress Index ...........................................................32 .....n.................9.5 Tier 1 capital ratio..................................................................32 .....n.................8.3 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................41 .....n................11.0 Foreign currency sovereign rating .........................................44 .....n ...............10.0 Aggregate macroprudential indicator ....................................50 .....n.................3.6 Manageability of public debt ................................................12 .....n...............24.0 Credit default swap spreads .................................................48 .....n.............378.8
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
224
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............38.6 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................48 .....n...............29.4 M2 to GDP ............................................................................49 .....n...............38.3 Private credit to GDP.............................................................43 .....n...............36.9 Bank deposits to GDP ...........................................................50 .....n...............29.3 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................53 .....n.................2.4 Bank overhead costs .............................................................52 .....n.................6.8 Public ownership of banks ....................................................30 .....n .................7.8 Bank operating costs to assets .............................................46 .....n.................3.3 Non-performing bank loans to total loans .............................39 .....n ...............14.8
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................33 .....n...............30.2 Public credit registry coverage ..............................................15 .....n.................5.7
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................50 .....n.................0.1 IPO proceeds amount ...........................................................51 .....n.................0.0 Share of world IPOs ..............................................................38 .....n.................0.3
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.1 M&A transaction value to GDP .............................................46 .....n.................2.1 Share of total number of M&A deals ....................................38 .....n.................0.3
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................46 .....n.................0.3 Non–life insurance density ...................................................41 .....n .................1.5 Real growth of direct insurance premiums .............................6 .....n.................0.1 Life insurance coverage ........................................................48 .....n.................0.1 Non–life insurance coverage .................................................36 .....n.................0.3 Relative value-added of insurance to GDP ............................55 .....n.................0.2
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................47 .....n.................0.4 Share of total number of securitization deals .......................44 .....n.................0.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Romania
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................40 .....n.................0.1 Outright forward foreign exchange turnover .........................40 .....n.................0.0 Foreign exchange swap turnover ..........................................33 .....n.................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 ..........................................................................n/a .........................n/a Interest rate derivatives turnover: Swaps..............................36 .....n.................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 ...................38 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................42 .....n...............24.6 Stock market capitalization to GDP .......................................48 .....n...............25.1 Stock market value traded to GDP........................................39 .....n .................7.0 Number of listed companies per 10,000 people.....................6 .....n.................0.8
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................54 .....n.................0.0 Public international bonds to GDP ........................................29 .....n.................2.7 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
225 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................48 .....n.................3.9 Venture capital availability......................................................44 .....n.................2.4 Ease of access to credit........................................................43 .....n.................2.6 Financing through local equity market ..................................48 .....n.................3.1 Ease of access to loans ........................................................44 .....n.................2.6 Foreign direct investment to GDP .........................................14 .....n.................8.2 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches .....................................................8 .....n...............35.0 Total number of ATMs...........................................................25 .....n...............53.2 Total number of point of sale (POS) devices.........................24 .....n.............540.3 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................20 .....n .................1.0
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Russian Federation Key indicators
Financial assets by major type, 2008 5.5%
Population (millions), 2009 .....................................................141.4
5.5%
US$ bn
GDP (US$ billions), 2009 ......................................................1,229.2 GDP (current prices) per capita, 2009 ..............................8,693.8
22.3%
GDP (PPP) as share (%) of world total, 2009 ........................3.05 Compound annual growth rate of real GDP (%), 2005–09 ..2.51
n n n n
66.8%
Public debt securities .......107.9 Private debt securities......109.2 Banking deposits ...............440.6 Equity securities .............1,321.8 Total
1,979.6
Total/GDP 119.2%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................40 3.2 1
2
3
4
5
6
7
Factors, policies, and institutions
226
1st pillar: Institutional environment .........................................53
3.1
Financial sector liberalization ....................................................51 Corporate governance.................................................................54 Legal and regulatory issues .......................................................55 Contract enforcement..................................................................34
2.2 3.6 2.6 4.2
2nd pillar: Business environment .............................................34
4.4
Human capital ...............................................................................29 Taxes...............................................................................................41 Infrastructure ................................................................................32 Cost of doing business ................................................................25
4.3 4.2 4.0 5.3
3rd pillar: Financial stability......................................................42
4.2
Currency stability..........................................................................12 Banking system stability..............................................................51 Risk of sovereign debt crisis ......................................................41
5.0 3.5 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......................................57
2.1
Size index .......................................................................................47 Efficiency index.............................................................................55 Financial information disclosure................................................45
1.4 3.1 1.4
5th pillar: Non-banking financial services ...............................5
4.3
IPO activity.....................................................................................13 M&A activity....................................................................................9 Insurance .......................................................................................13 Securitization...................................................................................4
3.3 4.7 3.5 5.7
6th pillar: Financial markets......................................................33
2.1
Foreign exchange markets .........................................................14 Derivatives markets....................................................................n/a Equity market development ........................................................30 Bond market development..........................................................38
1.9 n/a 2.3 1.9 1
Financial access 7th pillar: Financial access........................................................54
2.4
Commercial access......................................................................50 Retail access.................................................................................41
2.9 1.9 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................46 .....n................-0.1 Commitments to WTO agreement on trade in services ......n/a .........................n/a Domestic financial sector liberalization .................................53 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................47 .....n.................4.0 Efficacy of corporate boards .................................................52 .....n.................4.1 Reliance on professional management .................................51 .....n.................3.9 Willingness to delegate.........................................................52 .....n.................3.1 Strength of auditing and reporting standards .......................52 .....n.................3.8 Ethical behavior of firms........................................................51 .....n.................3.3 Protection of minority shareholders’ interests ......................56 .....n.................3.2
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................53 .....n.................2.5 Centralization of economic policymaking ..............................38 .....n.................2.8 Regulation of securities exchanges.......................................55 .....n.................3.3 Property rights.......................................................................54 .....n.................2.9 Intellectual property protection .............................................53 .....n.................2.6 Diversion of public funds.......................................................50 .....n.................2.6 Public trust of politicians .......................................................33 .....n.................2.9 Corruption perceptions index ................................................55 .....n.................2.2 Strength of legal rights index ................................................50 .....n.................3.0 Central bank transparency.....................................................44 .....n.................3.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................38 .....n.................3.3 Judicial independence ...........................................................52 .....n.................2.7 Irregular payments in judicial decisions.................................50 .....n.................3.1 Time to enforce a contract ......................................................5 .....n .............281.0 Number of procedures to enforce a contract .......................37 .....n ...............37.0 Strength of investor protection index....................................39 .....n.................5.0 Cost of enforcing contracts.....................................................8 .....n ...............13.4
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................47 .....n.................3.8 Quality of math and science education.................................32 .....n.................4.4 Extent of staff training...........................................................47 .....n.................3.7 Local availability of specialized research and training services .............................................................44 .....n.................4.1 Brain drain and ease of hiring foreign labor ..........................53 .....n.................3.2 Tertiary enrollment.................................................................10 .....n ...............74.7
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................47 .....n.................3.9 Distortive effect of taxes and subsidies on competition.......51 .....n.................3.5 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes..................................................................39 .....n.............320.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................47 .....n.................3.6 Quality of telephone infrastructure .......................................55 .....n.................5.0 Internet users .......................................................................36 .....n...............32.0 Broadband Internet subscribers ............................................34 .....n.................6.6 Telephone lines......................................................................24 .....n ...............31.8 Mobile telephone subscribers.................................................7 .....n .............138.2
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business....................................................17 .....n.................2.7
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Russian Federation
227
2: Country/Economy Profiles
Russian Federation Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ....................................................2 .....n.................0.1 Cost of closing a business ....................................................20 .....n.................9.0 Time to start a business........................................................42 .....n...............30.0 Time to register property ......................................................37 .....n...............43.0 Time to close a business ......................................................42 .....n.................3.8
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .......................6 .....n.................5.6 External vulnerability indicator...............................................13 .....n...............33.9 Current account balance to GDP...........................................15 .....n.................5.3 Dollarization vulnerability indicator ........................................32 .....n...............33.5 External debt to GDP (developing economies) .....................21 .....n...............38.3 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................55 .....n.................3.5 Financial strengths indicator..................................................48 .....n.................2.0 Aggregate measure of real estate bubbles...........................44 .....n .................1.0 Financial Stress Index ...........................................................29 .....n.................6.8 Tier 1 capital ratio ..................................................................11 .....n ...............12.0 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................35 .....n ...............13.0 Foreign currency sovereign rating .........................................34 .....n ...............12.0 Aggregate macroprudential indicator ....................................53 .....n.................3.3 Manageability of public debt ..................................................2 .....n.................8.3 Credit default swap spreads .................................................40 .....n.............189.3
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
228
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n ...............41.3 Central bank assets to GDP ..................................................29 .....n.................0.8 Financial system deposits to GDP ........................................46 .....n ...............31.7 M2 to GDP ............................................................................47 .....n...............40.2 Private credit to GDP.............................................................41 .....n...............39.0 Bank deposits to GDP ...........................................................48 .....n...............30.9 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................43 .....n.................3.5 Bank overhead costs .............................................................53 .....n .................7.6 Public ownership of banks ....................................................48 .....n ...............37.9 Bank operating costs to assets .............................................39 .....n.................2.7 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................38 .....n ...............14.3 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................5 .....n.................4.0 IPO proceeds amount ...........................................................14 .....n.................0.5 Share of world IPOs ..............................................................23 .....n.................0.7
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................3.1 M&A transaction value to GDP .............................................16 .....n .................7.7 Share of total number of M&A deals ......................................8 .....n.................3.6
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................57 .....n.................0.1 Non–life insurance density ...................................................14 .....n.................3.2 Real growth of direct insurance premiums ...........................15 .....n.................0.1 Life insurance coverage ........................................................47 .....n.................0.1 Non–life insurance coverage ...................................................4 .....n.................4.5 Relative value-added of insurance to GDP ............................21 .....n .................1.5
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................14 .....n.................2.6 Share of total number of securitization deals .........................3 .....n.................3.6
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Russian Federation
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ..............................................8 .....n.................2.7 Outright forward foreign exchange turnover .........................22 .....n.................0.3 Foreign exchange swap turnover...........................................16 .....n.................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 ..........................................................................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 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................30 .....n ...............51.8 Stock market capitalization to GDP .......................................18 .....n .............124.6 Stock market value traded to GDP........................................24 .....n...............66.4 Number of listed companies per 10,000 people...................42 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............39 .....n.................0.0 Public domestic bond market capitalization to GDP .............41 .....n.................4.0 Private international bonds to GDP .......................................26 .....n ...............10.0 Public international bonds to GDP ........................................32 .....n.................2.5 Local currency corporate bond issuance to GDP ..................12 .....n .................1.9
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
229 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................52 .....n.................3.6 Venture capital availability......................................................47 .....n.................2.3 Ease of access to credit........................................................40 .....n.................2.6 Financing through local equity market ..................................52 .....n.................2.7 Ease of access to loans ........................................................49 .....n.................2.3 Foreign direct investment to GDP .........................................16 .....n.................5.7 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................50 .....n.................2.6 Total number of ATMs ...........................................................16 .....n ...............76.5 Total number of point of sale (POS) devices.........................27 .....n.............293.0 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................24 .....n.................0.5
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Saudi Arabia Key indicators
Financial assets by major type, 2008 16.4%
Population (millions), 2009 .......................................................25.5 GDP (US$ billions), 2009 .........................................................369.7
US$ bn
2.3%
GDP (current prices) per capita, 2009 ............................14,486.1 45.1%
GDP (PPP) as share (%) of world total, 2009 ........................0.86 Compound annual growth rate of real GDP (%), 2005–09 ..1.92
n n n n
36.2%
Public debt securities .........89.6 Private debt securities........12.6 Banking deposits ...............197.5 Equity securities ................246.3 Total
546.1
Total/GDP 114.8%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................26 3.9 1
2
3
4
5
6
7
Factors, policies, and institutions
230
1st pillar: Institutional environment .........................................29
4.4
Financial sector liberalization ....................................................38 Corporate governance.................................................................19 Legal and regulatory issues .......................................................26 Contract enforcement..................................................................25
3.7 5.0 4.1 4.6
2nd pillar: Business environment .............................................22
5.0
Human capital ...............................................................................33 Taxes.................................................................................................5 Infrastructure ................................................................................34 Cost of doing business ..................................................................9
4.2 6.0 3.8 6.1
3rd pillar: Financial stability........................................................1
6.1
Currency stability............................................................................5 Banking system stability................................................................1 Risk of sovereign debt crisis ........................................................6
5.6 6.4 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......................................34
3.5
Size index .......................................................................................37 Efficiency index.............................................................................10 Financial information disclosure................................................43
2.1 6.0 1.5
5th pillar: Non-banking financial services .............................54
1.4
IPO activity.....................................................................................46 M&A activity..................................................................................52 Insurance .......................................................................................40 Securitization.................................................................................52
1.2 1.1 2.2 1.1
6th pillar: Financial markets......................................................35
1.9
Foreign exchange markets .........................................................36 Derivatives markets .....................................................................27 Equity market development ........................................................22 Bond market development..........................................................43
1.1 1.7 3.1 1.5 1
Financial access 7th pillar: Financial access..........................................................4
4.7
Commercial access........................................................................3 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.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................35 .....n .................1.2 Commitments to WTO agreement on trade in services.......32 .....n ...............51.8 Domestic financial sector liberalization .................................45 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................14 .....n.................4.6 Efficacy of corporate boards..................................................17 .....n.................5.0 Reliance on professional management .................................26 .....n.................4.9 Willingness to delegate .........................................................16 .....n.................4.6 Strength of auditing and reporting standards .......................24 .....n.................5.4 Ethical behavior of firms........................................................23 .....n.................5.2 Protection of minority shareholders’ interests ......................12 .....n.................5.1
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation ...........................................8 .....n.................4.0 Centralization of economic policymaking ..............................13 .....n.................4.0 Regulation of securities exchanges .......................................17 .....n.................5.1 Property rights .......................................................................19 .....n.................5.4 Intellectual property protection .............................................22 .....n.................4.8 Diversion of public funds.......................................................20 .....n.................5.1 Public trust of politicians .........................................................5 .....n.................5.4 Corruption perceptions index ................................................33 .....n.................4.3 Strength of legal rights index ................................................40 .....n.................4.0 Central bank transparency.....................................................50 .....n .................1.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................15 .....n.................4.5 Judicial independence ...........................................................19 .....n.................5.2 Irregular payments in judicial decisions.................................18 .....n.................5.8 Time to enforce a contract ....................................................45 .....n.............635.0 Number of procedures to enforce a contract .......................51 .....n...............43.0 Strength of investor protection index....................................12 .....n .................7.0 Cost of enforcing contracts...................................................37 .....n ...............27.5
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................37 .....n.................4.3 Quality of math and science education.................................28 .....n.................4.5 Extent of staff training...........................................................25 .....n.................4.4 Local availability of specialized research and training services .............................................................26 .....n.................4.7 Brain drain and ease of hiring foreign labor...........................12 .....n.................4.8 Tertiary enrollment ................................................................44 .....n...............29.9
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................19 .....n.................6.0 Distortive effect of taxes and subsidies on competition.........4 .....n.................5.4 Marginal tax variation ............................................................12 .....n ...............–9.9 Time to pay taxes....................................................................5 .....n...............79.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................21 .....n.................5.5 Quality of telephone infrastructure .......................................39 .....n.................6.1 Internet users .......................................................................37 .....n...............30.8 Broadband Internet subscribers ............................................42 .....n.................4.2 Telephone lines......................................................................43 .....n ...............16.3 Mobile telephone subscribers...............................................30 .....n .............102.2
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................34 .....n .................7.7
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Saudi Arabia
231
2: Country/Economy Profiles
Saudi Arabia Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ....................................................1 .....n.................0.0 Cost of closing a business ....................................................47 .....n...............22.0 Time to start a business..........................................................5 .....n.................5.0 Time to register property ........................................................1 .....n.................2.0 Time to close a business.......................................................16 .....n .................1.5
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................26 .....n .................1.2 External vulnerability indicator.................................................1 .....n .................7.0 Current account balance to GDP.............................................3 .....n ...............19.2 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .......................7 .....n...............22.5 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises....................................................1 .....n.................0.0 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio....................................................................4 .....n ...............14.4 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................21 .....n................17.0 Foreign currency sovereign rating .........................................20 .....n................17.0 Aggregate macroprudential indicator ......................................4 .....n.................5.8 Manageability of public debt ................................................10 .....n...............23.0 Credit default swap spreads..................................................13 .....n...............72.2
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
232
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n ...............51.5 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................40 .....n...............45.4 M2 to GDP ............................................................................28 .....n...............75.1 Private credit to GDP.............................................................42 .....n...............38.4 Bank deposits to GDP ...........................................................42 .....n...............45.4 Money market instruments to GDP .....................................n/a .........................n/a
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................4 .....n.................6.2 Bank overhead costs .............................................................12 .....n .................1.4 Public ownership of banks ....................................................47 .....n ...............31.7 Bank operating costs to assets .............................................18 .....n .................1.4 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................36 .....n................17.9 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................42 .....n.................0.2 IPO proceeds amount ...........................................................45 .....n.................0.1 Share of world IPOs ..............................................................32 .....n.................0.4
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.1 M&A transaction value to GDP .............................................53 .....n .................1.0 Share of total number of M&A deals ....................................49 .....n.................0.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................55 .....n.................0.1 Non–life insurance density ...................................................46 .....n .................1.0 Real growth of direct insurance premiums .............................3 .....n.................0.2 Life insurance coverage ........................................................52 .....n.................0.0 Non–life insurance coverage .................................................39 .....n.................0.3 Relative value-added of insurance to GDP ............................51 .....n.................0.5
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................50 .....n.................0.3 Share of total number of securitization deals .......................48 .....n.................0.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Saudi Arabia
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................28 .....n.................0.2 Outright forward foreign exchange turnover .........................39 .....n.................0.0 Foreign exchange swap turnover ..........................................35 .....n.................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 ...........................................................................31 .....n.................0.0 Interest rate derivatives turnover: Swaps..............................32 .....n.................0.0 Interest rate derivatives turnover: Options............................22 .....n.................0.1 Foreign exchange derivatives turnover: Currency swaps ......17 .....n.................0.7 Foreign exchange derivatives turnover: Options ...................30 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................16 .....n .............132.0 Stock market capitalization to GDP .......................................30 .....n...............85.6 Stock market value traded to GDP ........................................11 .....n .............178.1 Number of listed companies per 10,000 people...................30 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................41 .....n.................2.9 Public international bonds to GDP ........................................51 .....n.................0.0 Local currency corporate bond issuance to GDP ..................24 .....n.................0.7
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
233 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................25 .....n.................5.3 Venture capital availability ......................................................11 .....n.................3.8 Ease of access to credit..........................................................4 .....n.................4.2 Financing through local equity market ....................................2 .....n.................4.8 Ease of access to loans ..........................................................4 .....n.................4.4 Foreign direct investment to GDP...........................................8 .....n ...............10.3 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 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Singapore Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .........................................................4.8
US$ bn
27.5%
GDP (US$ billions), 2009 .........................................................177.1
26.8%
GDP (current prices) per capita, 2009 ............................37,293.4 GDP (PPP) as share (%) of world total, 2009 ........................0.34 Compound annual growth rate of real GDP (%), 2005–09 ..3.16
12.3%
n n n n
Public debt securities .......175.8 Private debt securities........80.7 Banking deposits ...............218.5 Equity securities ................180.0 Total
655.0
33.4%
Total/GDP 347.9%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index........................................................4 5.0 1
2
3
4
5
6
7
Factors, policies, and institutions
234
1st pillar: Institutional environment ...........................................1
6.1
Financial sector liberalization ....................................................16 Corporate governance...................................................................5 Legal and regulatory issues .........................................................2 Contract enforcement....................................................................1
6.7 5.6 5.6 6.4
2nd pillar: Business environment ...............................................2
5.9
Human capital .................................................................................4 Taxes.................................................................................................7 Infrastructure ................................................................................14 Cost of doing business ..................................................................1
5.6 5.8 5.5 6.7
3rd pillar: Financial stability........................................................4
5.7
Currency stability........................................................................n/a Banking system stability................................................................5 Risk of sovereign debt crisis ......................................................21
n/a 5.8 5.5 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......................................13
4.6
Size index .......................................................................................11 Efficiency index...............................................................................1 Financial information disclosure................................................33
4.0 6.5 2.2
5th pillar: Non-banking financial services .............................11
3.6
IPO activity.......................................................................................6 M&A activity..................................................................................16 Insurance .......................................................................................10 Securitization.................................................................................15
3.9 3.6 3.6 3.4
6th pillar: Financial markets........................................................2
5.1
Foreign exchange markets ...........................................................4 Derivatives markets .......................................................................7 Equity market development ..........................................................3 Bond market development..........................................................22
6.5 6.2 5.7 2.8 1
Financial access 7th pillar: Financial access........................................................13
4.3
Commercial access........................................................................2 Retail access.................................................................................15
5.0 3.5 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services .......18 .....n...............52.4 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ................................2 .....n.................5.2 Efficacy of corporate boards ...................................................4 .....n.................5.6 Reliance on professional management ...................................8 .....n.................5.9 Willingness to delegate .........................................................18 .....n.................4.5 Strength of auditing and reporting standards .........................3 .....n.................6.2 Ethical behavior of firms..........................................................3 .....n.................6.6 Protection of minority shareholders’ interests ........................5 .....n.................5.5
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation ...........................................1 .....n.................5.5 Centralization of economic policymaking ..............................53 .....n.................2.0 Regulation of securities exchanges.........................................3 .....n.................5.8 Property rights.........................................................................3 .....n.................6.3 Intellectual property protection ...............................................3 .....n.................6.1 Diversion of public funds.........................................................2 .....n.................6.4 Public trust of politicians .........................................................1 .....n.................6.4 Corruption perceptions index ..................................................2 .....n.................9.2 Strength of legal rights index ..................................................1 .....n ...............10.0 Central bank transparency.....................................................33 .....n .................7.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ........................................1 .....n.................6.5 Judicial independence ...........................................................16 .....n.................5.6 Irregular payments in judicial decisions...................................3 .....n.................6.7 Time to enforce a contract ......................................................1 .....n .............150.0 Number of procedures to enforce a contract .........................2 .....n ...............21.0 Strength of investor protection index......................................1 .....n.................9.3 Cost of enforcing contracts...................................................32 .....n...............25.8
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................5 .....n.................5.7 Quality of math and science education...................................1 .....n.................6.5 Extent of staff training.............................................................4 .....n.................5.5 Local availability of specialized research and training services..............................................................17 .....n.................5.3 Brain drain and ease of hiring foreign labor ............................3 .....n.................5.5 Tertiary enrollment ................................................................21 .....n...............59.8
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................2 .....n.................6.7 Distortive effect of taxes and subsidies on competition.........1 .....n.................5.8 Marginal tax variation ............................................................24 .....n.................3.1 Time to pay taxes....................................................................7 .....n...............84.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................3 .....n.................6.6 Quality of telephone infrastructure .........................................8 .....n.................6.8 Internet users .......................................................................13 .....n...............73.0 Broadband Internet subscribers ............................................18 .....n ...............21.7 Telephone lines......................................................................17 .....n...............40.2 Mobile telephone subscribers...............................................38 .....n...............90.6
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business .....................................................6 .....n.................0.7
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Singapore
235
2: Country/Economy Profiles
Singapore Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................25 .....n.................2.8 Cost of closing a business ......................................................1 .....n .................1.0 Time to start a business..........................................................2 .....n.................3.0 Time to register property ........................................................5 .....n.................5.0 Time to close a business ........................................................3 .....n.................0.8
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................18 .....n.................2.3 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP.............................................2 .....n...............22.0 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises....................................................1 .....n.................0.0 Financial strengths indicator....................................................1 .....n.................9.0 Aggregate measure of real estate bubbles...........................37 .....n.................4.0 Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio..................................................................25 .....n ...............10.5 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator ....................................26 .....n.................5.3 Manageability of public debt ................................................55 .....n .............113.1 Credit default swap spreads ...................................................9 .....n...............50.1
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
236
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............110.6 Central bank assets to GDP ..................................................16 .....n.................2.2 Financial system deposits to GDP ..........................................7 .....n .............115.9 M2 to GDP ..............................................................................9 .....n .............144.1 Private credit to GDP.............................................................22 .....n...............90.9 Bank deposits to GDP .............................................................9 .....n .............112.6 Money market instruments to GDP ......................................14 .....n .................1.1
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................8 .....n.................5.2 Bank overhead costs ...............................................................1 .....n.................0.5 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................10 .....n .................1.1 Non-performing bank loans to total loans .............................10 .....n.................2.3
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................26 .....n...............40.3 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................15 .....n .................1.2 IPO proceeds amount .............................................................3 .....n .................1.1 Share of world IPOs ..............................................................13 .....n.................2.1
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.7 M&A transaction value to GDP ...............................................2 .....n ...............12.6 Share of total number of M&A deals ....................................18 .....n .................1.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................14 .....n.................5.1 Non–life insurance density ...................................................16 .....n.................2.9 Real growth of direct insurance premiums ...........................22 .....n.................0.0 Life insurance coverage ........................................................36 .....n.................0.2 Non–life insurance coverage .................................................47 .....n.................0.1 Relative value-added of insurance to GDP ..............................3 .....n.................3.5
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ..............................................................7 .....n.................3.2 Share of total number of securitization deals .......................27 .....n.................0.3
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Singapore
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ..............................................5 .....n .................7.0 Outright forward foreign exchange turnover ...........................4 .....n.................5.9 Foreign exchange swap turnover ............................................5 .....n.................5.3
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 ...........................................................................15 .....n.................0.5 Interest rate derivatives turnover: Swaps................................6 .....n.................3.5 Interest rate derivatives turnover: Options..............................9 .....n.................0.6 Foreign exchange derivatives turnover: Currency swaps ........7 .....n.................3.1 Foreign exchange derivatives turnover: Options .....................5 .....n.................4.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio .....................................................8 .....n.............184.6 Stock market capitalization to GDP .........................................8 .....n .............172.5 Stock market value traded to GDP..........................................8 .....n.............238.1 Number of listed companies per 10,000 people.....................3 .....n .................1.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............26 .....n ...............14.4 Public domestic bond market capitalization to GDP..............11 .....n...............45.4 Private international bonds to GDP .......................................19 .....n...............29.9 Public international bonds to GDP ........................................46 .....n.................0.2 Local currency corporate bond issuance to GDP ..................21 .....n .................1.2
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
237 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication ...............................................9 .....n.................6.1 Venture capital availability........................................................3 .....n.................4.2 Ease of access to credit ........................................................19 .....n.................3.5 Financing through local equity market ....................................3 .....n.................4.8 Ease of access to loans ..........................................................2 .....n.................4.5 Foreign direct investment to GDP...........................................3 .....n ...............12.8 Retail access Market penetration of bank accounts .....................................6 .....n......223,624.7 Commercial bank branches ...................................................38 .....n ...............10.5 Total number of ATMs...........................................................28 .....n...............49.8 Total number of point of sale (POS) devices .........................12 .....n ..........2,091.4 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Slovak Republic Key indicators
Financial assets by major type, 2008 5.2%
Population (millions), 2009 .........................................................5.4
US$ bn
GDP (US$ billions), 2009 ...........................................................88.2
30.7%
GDP (current prices) per capita, 2009 ............................16,281.6 GDP (PPP) as share (%) of world total, 2009 ........................0.17 Compound annual growth rate of real GDP (%), 2005–09 ..3.96
57.2%
n n n n
Public debt securities .........27.3 Private debt securities..........5.7 Banking deposits .................50.9 Equity securities ....................5.1
6.4%
Total
89.0
Total/GDP 93.5%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................36 3.3 1
2
3
4
5
6
7
Factors, policies, and institutions
238
1st pillar: Institutional environment .........................................40
3.8
Financial sector liberalization ....................................................41 Corporate governance.................................................................28 Legal and regulatory issues .......................................................35 Contract enforcement..................................................................41
3.5 4.4 3.5 3.8
2nd pillar: Business environment .............................................27
4.7
Human capital ...............................................................................37 Taxes...............................................................................................31 Infrastructure ................................................................................28 Cost of doing business ................................................................22
4.0 4.7 4.5 5.5
3rd pillar: Financial stability......................................................14
5.0
Currency stability..........................................................................20 Banking system stability..............................................................21 Risk of sovereign debt crisis ......................................................19
4.3 5.0 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 .......................................................................................40 Efficiency index.............................................................................20 Financial information disclosure................................................30
1.8 5.6 2.4
5th pillar: Non-banking financial services .............................51
1.5
IPO activity...................................................................................n/a M&A activity..................................................................................55 Insurance .......................................................................................44 Securitization.................................................................................47
n/a 1.0 2.1 1.3
6th pillar: Financial markets......................................................49
1.5
Foreign exchange markets .........................................................40 Derivatives markets....................................................................n/a Equity market development ........................................................50 Bond market development..........................................................33
1.0 n/a 1.4 2.0 1
Financial access 7th pillar: Financial access........................................................33
3.2
Commercial access......................................................................43 Retail access.................................................................................17
3.2 3.3 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................34 .....n .................1.5 Commitments to WTO agreement on trade in services.......38 .....n...............43.9 Domestic financial sector liberalization .................................47 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................13 .....n.................4.6 Efficacy of corporate boards .................................................22 .....n.................4.9 Reliance on professional management .................................25 .....n.................4.9 Willingness to delegate.........................................................32 .....n.................3.9 Strength of auditing and reporting standards .......................34 .....n.................4.8 Ethical behavior of firms........................................................44 .....n.................3.6 Protection of minority shareholders’ interests ......................38 .....n.................4.2
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................38 .....n.................2.8 Centralization of economic policymaking ..............................28 .....n.................3.2 Regulation of securities exchanges.......................................45 .....n.................3.9 Property rights.......................................................................40 .....n.................4.2 Intellectual property protection .............................................33 .....n.................3.8 Diversion of public funds.......................................................51 .....n.................2.5 Public trust of politicians .......................................................54 .....n .................1.7 Corruption perceptions index ................................................30 .....n.................4.5 Strength of legal rights index ..................................................4 .....n.................9.0 Central bank transparency.....................................................36 .....n.................6.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................41 .....n.................3.0 Judicial independence ...........................................................49 .....n.................2.9 Irregular payments in judicial decisions.................................53 .....n.................2.9 Time to enforce a contract ....................................................35 .....n.............565.0 Number of procedures to enforce a contract ........................11 .....n...............30.0 Strength of investor protection index....................................44 .....n.................4.7 Cost of enforcing contracts...................................................43 .....n...............30.0
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................56 .....n.................3.4 Quality of math and science education.................................36 .....n.................4.1 Extent of staff training...........................................................39 .....n.................3.9 Local availability of specialized research and training services .............................................................30 .....n.................4.6 Brain drain and ease of hiring foreign labor ..........................42 .....n.................3.6 Tertiary enrollment ................................................................28 .....n...............50.8
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................30 .....n.................5.1 Distortive effect of taxes and subsidies on competition.......54 .....n.................3.4 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes..................................................................32 .....n .............257.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................33 .....n.................4.4 Quality of telephone infrastructure........................................15 .....n.................6.6 Internet users .......................................................................19 .....n...............66.1 Broadband Internet subscribers ............................................29 .....n................11.2 Telephone lines......................................................................39 .....n...............20.3 Mobile telephone subscribers...............................................25 .....n ..............111.7
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business....................................................15 .....n.................2.0
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Slovak Republic
239
2: Country/Economy Profiles
Slovak Republic Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ....................................................2 .....n.................0.1 Cost of closing a business ....................................................39 .....n...............18.0 Time to start a business........................................................30 .....n ...............16.0 Time to register property ......................................................17 .....n................17.0 Time to close a business ......................................................43 .....n.................4.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................11 .....n.................3.9 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................50 .....n ...............–5.0 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................14 .....n..............–57.6
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................27 .....n .................1.5 Financial strengths indicator..................................................32 .....n.................4.0 Aggregate measure of real estate bubbles...........................24 .....n.................5.0 Financial Stress Index ...........................................................22 .....n.................4.9 Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................24 .....n ...............16.0 Foreign currency sovereign rating .........................................22 .....n ...............16.0 Aggregate macroprudential indicator ....................................20 .....n.................5.4 Manageability of public debt ................................................17 .....n...............35.7 Credit default swap spreads..................................................18 .....n ...............91.7
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
240
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............53.5 Central bank assets to GDP ..................................................40 .....n.................0.0 Financial system deposits to GDP ........................................38 .....n...............48.5 M2 to GDP ............................................................................37 .....n...............59.7 Private credit to GDP.............................................................38 .....n...............42.5 Bank deposits to GDP ...........................................................39 .....n...............48.6 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................27 .....n.................4.4 Bank overhead costs .............................................................27 .....n.................2.3 Public ownership of banks ....................................................20 .....n.................0.6 Bank operating costs to assets .............................................32 .....n.................2.3 Non-performing bank loans to total loans .............................21 .....n.................4.3
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................24 .....n...............44.0 Public credit registry coverage ..............................................19 .....n .................1.4
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share .................................................................n/a .........................n/a IPO proceeds amount ..........................................................n/a .........................n/a Share of world IPOs .............................................................n/a .........................n/a
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.0 M&A transaction value to GDP .............................................55 .....n.................0.9 Share of total number of M&A deals ....................................47 .....n.................0.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................33 .....n .................1.5 Non–life insurance density ...................................................35 .....n .................1.7 Real growth of direct insurance premiums ...........................17 .....n.................0.1 Life insurance coverage ........................................................46 .....n.................0.1 Non–life insurance coverage .................................................54 .....n.................0.1 Relative value-added of insurance to GDP ............................41 .....n.................0.8
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................46 .....n.................0.5 Share of total number of securitization deals .......................48 .....n.................0.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Slovak Republic
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................44 .....n.................0.0 Outright forward foreign exchange turnover .........................43 .....n.................0.0 Foreign exchange swap turnover ..........................................30 .....n.................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 ..........................................................................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 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................51 .....n.................0.4 Stock market capitalization to GDP .......................................51 .....n .................7.8 Stock market value traded to GDP........................................44 .....n.................0.0 Number of listed companies per 10,000 people ...................16 .....n.................0.3
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............30 .....n.................5.9 Public domestic bond market capitalization to GDP .............28 .....n...............26.1 Private international bonds to GDP .......................................50 .....n.................0.7 Public international bonds to GDP.........................................15 .....n .................7.4 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
241 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................33 .....n.................4.8 Venture capital availability......................................................40 .....n.................2.6 Ease of access to credit........................................................25 .....n.................3.2 Financing through local equity market ..................................53 .....n.................2.6 Ease of access to loans ........................................................28 .....n.................3.2 Foreign direct investment to GDP.........................................27 .....n.................3.9 Retail access Market penetration of bank accounts....................................11 .....n......185,782.7 Commercial bank branches ...................................................13 .....n...............26.6 Total number of ATMs...........................................................29 .....n...............49.3 Total number of point of sale (POS) devices.........................21 .....n .............713.1 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
South Africa Key indicators
Financial assets by major type, 2008 8.6%
Population (millions), 2009 .......................................................49.3
US$ bn
9.8%
GDP (US$ billions), 2009 .........................................................287.2 GDP (current prices) per capita, 2009 ..............................5,823.6 GDP (PPP) as share (%) of world total, 2009 ........................0.70
20.3%
61.3%
Compound annual growth rate of real GDP (%), 2005–09 ..2.55
n n n n
Public debt securities .........68.9 Private debt securities........78.5 Banking deposits ...............162.6 Equity securities ................491.3 Total
801.3
Total/GDP 289.5%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................31 3.5 1
2
3
4
5
6
7
Factors, policies, and institutions
242
1st pillar: Institutional environment .........................................28
4.4
Financial sector liberalization ....................................................45 Corporate governance.................................................................12 Legal and regulatory issues .......................................................22 Contract enforcement..................................................................21
3.2 5.3 4.2 5.0
2nd pillar: Business environment .............................................45
3.9
Human capital ...............................................................................52 Taxes...............................................................................................36 Infrastructure ................................................................................49 Cost of doing business ................................................................37
3.4 4.4 3.0 4.8
3rd pillar: Financial stability......................................................28
4.6
Currency stability..........................................................................34 Banking system stability..............................................................15 Risk of sovereign debt crisis ......................................................37
3.7 5.2 4.6 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
3.7
Size index .......................................................................................29 Efficiency index.............................................................................31 Financial information disclosure................................................28
2.8 5.1 2.6
5th pillar: Non-banking financial services .............................19
2.8
IPO activity.....................................................................................34 M&A activity..................................................................................20 Insurance .........................................................................................4 Securitization.................................................................................35
1.7 3.0 4.5 1.9
6th pillar: Financial markets......................................................27
2.5
Foreign exchange markets .........................................................22 Derivatives markets .....................................................................20 Equity market development ........................................................14 Bond market development..........................................................40
1.3 2.5 3.9 1.8 1
Financial access 7th pillar: Financial access........................................................43
2.9
Commercial access......................................................................21 Retail access.................................................................................37
3.7 2.2 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................49 .....n ...............–1.1 Commitments to WTO agreement on trade in services.......43 .....n...............28.4 Domestic financial sector liberalization .................................26 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ................................6 .....n.................5.0 Efficacy of corporate boards ...................................................2 .....n.................5.8 Reliance on professional management .................................16 .....n.................5.5 Willingness to delegate.........................................................24 .....n.................4.1 Strength of auditing and reporting standards .........................1 .....n.................6.4 Ethical behavior of firms........................................................27 .....n.................4.5 Protection of minority shareholders’ interests ........................4 .....n.................5.6
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................34 .....n.................3.0 Centralization of economic policymaking ..............................40 .....n.................2.8 Regulation of securities exchanges.........................................1 .....n.................6.0 Property rights.......................................................................20 .....n.................5.4 Intellectual property protection .............................................21 .....n.................4.9 Diversion of public funds.......................................................39 .....n.................3.1 Public trust of politicians .......................................................38 .....n.................2.4 Corruption perceptions index ................................................29 .....n.................4.7 Strength of legal rights index ..................................................4 .....n.................9.0 Central bank transparency.....................................................18 .....n.................9.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................17 .....n.................4.4 Judicial independence ...........................................................26 .....n.................4.7 Irregular payments in judicial decisions.................................23 .....n.................5.3 Time to enforce a contract ....................................................41 .....n.............600.0 Number of procedures to enforce a contract ........................11 .....n...............30.0 Strength of investor protection index......................................9 .....n.................8.0 Cost of enforcing contracts...................................................49 .....n...............33.2
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools............................................17 .....n.................5.1 Quality of math and science education.................................57 .....n.................2.0 Extent of staff training...........................................................19 .....n.................4.7 Local availability of specialized research and training services .............................................................34 .....n.................4.4 Brain drain and ease of hiring foreign labor ..........................56 .....n.................3.0 Tertiary enrollment ................................................................51 .....n ...............15.4
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................23 .....n.................5.7 Distortive effect of taxes and subsidies on competition.........8 .....n.................5.0 Marginal tax variation ............................................................44 .....n...............25.6 Time to pay taxes..................................................................24 .....n.............200.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................32 .....n.................4.6 Quality of telephone infrastructure .......................................56 .....n.................4.5 Internet users .......................................................................53 .....n.................8.4 Broadband Internet subscribers ............................................52 .....n.................0.9 Telephone lines......................................................................51 .....n.................8.9 Mobile telephone subscribers ...............................................19 .....n .............118.3
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................28 .....n.................5.9
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
South Africa
243
2: Country/Economy Profiles
South Africa Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................52 .....n.................8.7 Cost of closing a business ....................................................39 .....n...............18.0 Time to start a business........................................................36 .....n...............22.0 Time to register property ......................................................24 .....n...............24.0 Time to close a business ......................................................25 .....n.................2.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................47 .....n ...............–1.8 External vulnerability indicator...............................................22 .....n ...............74.5 Current account balance to GDP...........................................51 .....n ...............–6.1 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies)......................10 .....n...............24.4 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises....................................................1 .....n.................0.0 Financial strengths indicator..................................................22 .....n.................5.0 Aggregate measure of real estate bubbles...........................39 .....n.................3.8 Financial Stress Index ...........................................................20 .....n.................4.7 Tier 1 capital ratio ..................................................................16 .....n................11.5 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................24 .....n ...............16.0 Foreign currency sovereign rating .........................................32 .....n ...............12.7 Aggregate macroprudential indicator ....................................48 .....n.................3.8 Manageability of public debt ................................................15 .....n...............30.0 Credit default swap spreads .................................................35 .....n .............172.7
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
244
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n ...............87.7 Central bank assets to GDP ..................................................33 .....n.................0.5 Financial system deposits to GDP ........................................26 .....n...............63.3 M2 to GDP ............................................................................33 .....n...............69.4 Private credit to GDP...............................................................8 .....n .............162.4 Bank deposits to GDP ...........................................................29 .....n...............63.4 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator.............................................19 .....n.................4.7 Bank overhead costs .............................................................46 .....n.................4.4 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................41 .....n.................2.8 Non-performing bank loans to total loans .............................28 .....n.................5.5
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................22 .....n...............54.7 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................39 .....n.................0.3 IPO proceeds amount ...........................................................35 .....n.................0.2 Share of world IPOs ..............................................................17 .....n .................1.6
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.7 M&A transaction value to GDP ...............................................9 .....n.................8.9 Share of total number of M&A deals ....................................24 .....n.................0.7
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density .............................................................2 .....n ...............10.0 Non–life insurance density ...................................................17 .....n.................2.9 Real growth of direct insurance premiums ...........................19 .....n.................0.0 Life insurance coverage ..........................................................6 .....n.................4.9 Non–life insurance coverage .................................................13 .....n .................1.4 Relative value-added of insurance to GDP ............................11 .....n.................2.1
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................27 .....n .................1.3 Share of total number of securitization deals .......................37 .....n.................0.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
South Africa
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................26 .....n.................0.3 Outright forward foreign exchange turnover .........................23 .....n.................0.2 Foreign exchange swap turnover ..........................................22 .....n.................0.4
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 ...........................................................................13 .....n.................0.7 Interest rate derivatives turnover: Swaps..............................23 .....n.................0.1 Interest rate derivatives turnover: Options............................14 .....n.................0.3 Foreign exchange derivatives turnover: Currency swaps ......29 .....n.................0.1 Foreign exchange derivatives turnover: Options ...................31 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................28 .....n...............59.6 Stock market capitalization to GDP .........................................3 .....n.............308.4 Stock market value traded to GDP ........................................10 .....n..............197.4 Number of listed companies per 10,000 people...................23 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............25 .....n ...............16.3 Public domestic bond market capitalization to GDP .............29 .....n...............25.9 Private international bonds to GDP .......................................27 .....n.................8.5 Public international bonds to GDP ........................................28 .....n.................2.9 Local currency corporate bond issuance to GDP ..................37 .....n.................0.0
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
245 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication ...............................................5 .....n.................6.4 Venture capital availability......................................................26 .....n.................3.0 Ease of access to credit........................................................44 .....n.................2.5 Financing through local equity market ....................................5 .....n.................4.7 Ease of access to loans ........................................................26 .....n.................3.2 Foreign direct investment to GDP.........................................37 .....n.................3.1 Retail access Market penetration of bank accounts ...................................25 .....n ........83,913.4 Commercial bank branches ...................................................42 .....n.................8.0 Total number of ATMs...........................................................26 .....n...............52.4 Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .....................................................................14 .....n.................4.1
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Spain Key indicators
Financial assets by major type, 2008 13.8%
Population (millions), 2009 .......................................................45.8
9.3% US$ bn
GDP (US$ billions), 2009 ......................................................1,464.0 GDP (current prices) per capita, 2009 ............................31,946.3 GDP (PPP) as share (%) of world total, 2009 ........................1.96 32.8%
Compound annual growth rate of real GDP (%), 2005–09 ..0.92
44.2%
n n n n
Public debt securities .......636.1 Private debt securities...3,034.0 Banking deposits ............2,255.4 Equity securities ................946.1 Total
6,871.6
Total/GDP 428.9%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................14 4.4 1
2
3
4
5
6
7
Factors, policies, and institutions
246
1st pillar: Institutional environment .........................................22
5.0
Financial sector liberalization ......................................................1 Corporate governance.................................................................33 Legal and regulatory issues .......................................................24 Contract enforcement..................................................................30
7.0 4.3 4.2 4.4
2nd pillar: Business environment .............................................23
4.9
Human capital ...............................................................................23 Taxes...............................................................................................21 Infrastructure ................................................................................20 Cost of doing business ................................................................43
4.6 5.0 5.3 4.5
3rd pillar: Financial stability......................................................47
3.9
Currency stability..........................................................................46 Banking system stability..............................................................44 Risk of sovereign debt crisis ......................................................31
3.1 3.8 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........................................4
5.2
Size index .........................................................................................5 Efficiency index...............................................................................8 Financial information disclosure................................................20
5.4 6.0 3.4
5th pillar: Non-banking financial services .............................10
3.6
IPO activity.....................................................................................18 M&A activity..................................................................................10 Insurance .......................................................................................23 Securitization...................................................................................8
2.8 4.6 2.9 4.4
6th pillar: Financial markets......................................................14
4.0
Foreign exchange markets .........................................................21 Derivatives markets .....................................................................17 Equity market development ..........................................................6 Bond market development............................................................5
1.4 3.3 5.3 4.9 1
Financial access 7th pillar: Financial access........................................................12
4.3
Commercial access......................................................................47 Retail access...................................................................................5
3.1 5.4 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n...............72.8 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................43 .....n.................4.0 Efficacy of corporate boards .................................................46 .....n.................4.3 Reliance on professional management .................................33 .....n.................4.6 Willingness to delegate.........................................................37 .....n.................3.7 Strength of auditing and reporting standards .......................32 .....n.................4.9 Ethical behavior of firms........................................................24 .....n.................4.7 Protection of minority shareholders’ interests ......................39 .....n.................4.1
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................40 .....n.................2.8 Centralization of economic policymaking ................................3 .....n.................5.1 Regulation of securities exchanges.......................................52 .....n.................3.5 Property rights.......................................................................27 .....n.................4.9 Intellectual property protection .............................................25 .....n.................4.3 Diversion of public funds.......................................................27 .....n.................4.0 Public trust of politicians .......................................................34 .....n.................2.6 Corruption perceptions index ................................................21 .....n.................6.1 Strength of legal rights index ................................................30 .....n.................6.0 Central bank transparency.......................................................3 .....n................11.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................33 .....n.................3.5 Judicial independence ...........................................................37 .....n.................3.8 Irregular payments in judicial decisions.................................25 .....n.................5.2 Time to enforce a contract ....................................................32 .....n .............515.0 Number of procedures to enforce a contract .......................43 .....n...............39.0 Strength of investor protection index....................................39 .....n.................5.0 Cost of enforcing contracts ...................................................15 .....n................17.2
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................7 .....n.................5.6 Quality of math and science education.................................48 .....n.................3.1 Extent of staff training...........................................................46 .....n.................3.7 Local availability of specialized research and training services .............................................................23 .....n.................5.0 Brain drain and ease of hiring foreign labor ..........................31 .....n.................3.9 Tertiary enrollment.................................................................12 .....n...............68.9
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................25 .....n.................5.6 Distortive effect of taxes and subsidies on competition.......50 .....n.................3.6 Marginal tax variation ............................................................17 .....n ...............–5.1 Time to pay taxes..................................................................27 .....n .............213.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................16 .....n.................5.8 Quality of telephone infrastructure .......................................35 .....n.................6.2 Internet users .......................................................................24 .....n...............56.7 Broadband Internet subscribers ............................................20 .....n...............20.2 Telephone lines......................................................................12 .....n...............45.4 Mobile telephone subscribers...............................................20 .....n .............118.0
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................45 .....n ...............15.0
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Spain
247
2: Country/Economy Profiles
Spain Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................48 .....n .................7.2 Cost of closing a business ....................................................31 .....n ...............15.0 Time to start a business........................................................52 .....n ...............47.0 Time to register property ......................................................20 .....n...............18.0 Time to close a business ........................................................8 .....n .................1.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................18 .....n.................2.3 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................54 .....n ...............–8.2 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................17 .....n .............–93.6
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................51 .....n.................2.5 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles...........................35 .....n.................4.3 Financial Stress Index............................................................14 .....n.................3.2 Tier 1 capital ratio..................................................................28 .....n.................9.6 Output loss during banking crises.........................................53 .....n..............107.3
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................17 .....n...............18.0 Foreign currency sovereign rating .........................................17 .....n................17.7 Aggregate macroprudential indicator ....................................45 .....n.................4.1 Manageability of public debt ................................................37 .....n...............53.2 Credit default swap spreads .................................................43 .....n.............245.9
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
248
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n..............197.8 Central bank assets to GDP ..................................................25 .....n .................1.3 Financial system deposits to GDP ..........................................5 .....n .............136.0 M2 to GDP ..............................................................................3 .....n..............167.4 Private credit to GDP...............................................................6 .....n.............188.5 Bank deposits to GDP .............................................................5 .....n .............136.9 Money market instruments to GDP ......................................10 .....n.................3.1
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................22 .....n.................4.6 Bank overhead costs ...............................................................5 .....n .................1.1 Public ownership of banks ......................................................1 .....n.................0.0 Bank operating costs to assets .............................................19 .....n .................1.4 Non-performing bank loans to total loans .............................25 .....n.................5.1
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................44 .....n .................7.6 Public credit registry coverage ................................................4 .....n...............45.3
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................7 .....n.................3.3 IPO proceeds amount ...........................................................19 .....n.................0.4 Share of world IPOs ..............................................................28 .....n.................0.5
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................3.5 M&A transaction value to GDP .............................................13 .....n.................8.1 Share of total number of M&A deals ....................................12 .....n.................2.4
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................23 .....n.................2.7 Non–life insurance density ...................................................15 .....n.................3.0 Real growth of direct insurance premiums ...........................20 .....n.................0.0 Life insurance coverage.........................................................14 .....n .................1.2 Non–life insurance coverage .................................................15 .....n .................1.4 Relative value-added of insurance to GDP ............................43 .....n.................0.6
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ..............................................................6 .....n.................3.4 Share of total number of securitization deals........................11 .....n .................1.3
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Spain
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover.............................................19 .....n.................0.5 Outright forward foreign exchange turnover .........................18 .....n.................0.5 Foreign exchange swap turnover ..........................................23 .....n.................0.4
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 ...........................................................................21 .....n.................0.2 Interest rate derivatives turnover: Swaps..............................13 .....n .................1.0 Interest rate derivatives turnover: Options............................15 .....n.................0.3 Foreign exchange derivatives turnover: Currency swaps ......20 .....n.................0.3 Foreign exchange derivatives turnover: Options....................17 .....n.................0.3
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio .....................................................7 .....n.............186.2 Stock market capitalization to GDP .......................................17 .....n .............128.5 Stock market value traded to GDP..........................................5 .....n .............276.4 Number of listed companies per 10,000 people.....................7 .....n.................0.8
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ..............3 .....n...............88.2 Public domestic bond market capitalization to GDP .............20 .....n...............36.3 Private international bonds to GDP .........................................4 .....n .............109.9 Public international bonds to GDP.........................................13 .....n.................8.1 Local currency corporate bond issuance to GDP ..................15 .....n .................1.7
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
249 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................21 .....n.................5.7 Venture capital availability......................................................38 .....n.................2.6 Ease of access to credit........................................................57 .....n .................1.4 Financing through local equity market ..................................47 .....n.................3.3 Ease of access to loans ........................................................46 .....n.................2.5 Foreign direct investment to GDP.........................................23 .....n.................4.5 Retail access Market penetration of bank accounts ...................................27 .....n ........78,047.1 Commercial bank branches .....................................................6 .....n...............38.2 Total number of ATMs.............................................................4 .....n .............154.8 Total number of point of sale (POS) devices...........................3 .....n...........3,711.3 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Sweden Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .........................................................9.2
13.8%
19.9%
US$ bn
GDP (US$ billions), 2009 .........................................................405.4
n n n n
GDP (current prices) per capita, 2009 ............................43,986.2 GDP (PPP) as share (%) of world total, 2009 ........................0.48 18.2%
Compound annual growth rate of real GDP (%), 2005–09 ..0.41
Public debt securities .......175.8 Private debt securities......610.3 Banking deposits ...............231.3 Equity securities ................252.5 Total
48.1%
1,270.0
Total/GDP 265.2%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................12 4.6 1
2
3
4
5
6
7
Factors, policies, and institutions
250
1st pillar: Institutional environment ...........................................2
6.1
Financial sector liberalization ......................................................1 Corporate governance...................................................................1 Legal and regulatory issues .........................................................3 Contract enforcement..................................................................14
7.0 6.1 5.6 5.5
2nd pillar: Business environment ...............................................1
6.0
Human capital .................................................................................2 Taxes.................................................................................................4 Infrastructure ..................................................................................3 Cost of doing business ................................................................13
5.6 6.1 6.3 5.9
3rd pillar: Financial stability......................................................27
4.6
Currency stability..........................................................................32 Banking system stability..............................................................43 Risk of sovereign debt crisis ........................................................5
3.9 3.9 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......................................10
4.8
Size index .......................................................................................13 Efficiency index...............................................................................7 Financial information disclosure..................................................3
3.9 6.1 4.0
5th pillar: Non-banking financial services .............................26
2.4
IPO activity.....................................................................................44 M&A activity..................................................................................17 Insurance .......................................................................................27 Securitization.................................................................................32
1.3 3.5 2.7 2.2
6th pillar: Financial markets......................................................17
3.6
Foreign exchange markets .........................................................16 Derivatives markets .....................................................................15 Equity market development ..........................................................9 Bond market development..........................................................17
1.8 4.2 4.7 3.5 1
Financial access 7th pillar: Financial access..........................................................7
4.6
Commercial access........................................................................4 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.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n ...............77.4 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................11 .....n.................4.6 Efficacy of corporate boards ...................................................1 .....n.................5.9 Reliance on professional management ...................................1 .....n.................6.5 Willingness to delegate...........................................................1 .....n.................6.5 Strength of auditing and reporting standards .........................2 .....n.................6.3 Ethical behavior of firms..........................................................1 .....n.................6.8 Protection of minority shareholders’ interests ........................1 .....n.................6.0
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation ...........................................6 .....n.................4.0 Centralization of economic policymaking ..............................20 .....n.................3.6 Regulation of securities exchanges.........................................2 .....n.................5.9 Property rights.........................................................................5 .....n.................6.3 Intellectual property protection ...............................................1 .....n.................6.2 Diversion of public funds.........................................................1 .....n.................6.5 Public trust of politicians .........................................................2 .....n.................5.8 Corruption perceptions index ..................................................2 .....n.................9.2 Strength of legal rights index ................................................37 .....n.................5.0 Central bank transparency.......................................................1 .....n ...............15.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ........................................2 .....n.................5.9 Judicial independence .............................................................1 .....n.................6.6 Irregular payments in judicial decisions...................................1 .....n.................6.8 Time to enforce a contract ....................................................28 .....n.............508.0 Number of procedures to enforce a contract ........................11 .....n...............30.0 Strength of investor protection index....................................27 .....n.................5.7 Cost of enforcing contracts...................................................44 .....n ...............31.2
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................6 .....n.................5.6 Quality of math and science education .................................11 .....n.................5.0 Extent of staff training.............................................................1 .....n.................5.7 Local availability of specialized research and training services ...............................................................3 .....n.................6.1 Brain drain and ease of hiring foreign labor...........................10 .....n.................4.8 Tertiary enrollment ..................................................................8 .....n...............75.2
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................1 .....n.................6.8 Distortive effect of taxes and subsidies on competition.........7 .....n.................5.1 Marginal tax variation.............................................................11 .....n .............–10.3 Time to pay taxes ..................................................................14 .....n .............122.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................6 .....n.................6.4 Quality of telephone infrastructure .........................................4 .....n.................6.9 Internet users .........................................................................1 .....n ...............87.8 Broadband Internet subscribers ..............................................1 .....n ...............41.2 Telephone lines........................................................................4 .....n ...............57.8 Mobile telephone subscribers...............................................36 .....n...............92.0
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business .....................................................5 .....n.................0.6
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Sweden
251
2: Country/Economy Profiles
Sweden Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................26 .....n.................3.0 Cost of closing a business ....................................................20 .....n.................9.0 Time to start a business........................................................27 .....n ...............15.0 Time to register property ......................................................15 .....n ...............15.0 Time to close a business ......................................................25 .....n.................2.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................44 .....n ...............–1.5 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP ...........................................11 .....n .................7.6 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................12 .....n .............–19.3
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................53 .....n.................3.3 Financial strengths indicator ..................................................10 .....n.................6.0 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index .............................................................9 .....n .................1.4 Tier 1 capital ratio..................................................................24 .....n ...............10.5 Output loss during banking crises.........................................50 .....n .............103.1
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator ....................................29 .....n.................5.1 Manageability of public debt ................................................18 .....n...............36.1 Credit default swap spreads ...................................................5 .....n...............42.0
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
252
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............132.0 Central bank assets to GDP .................................................n/a .........................n/a Financial system deposits to GDP ........................................32 .....n...............52.3 M2 to GDP ............................................................................34 .....n ...............67.0 Private credit to GDP .............................................................11 .....n .............124.1 Bank deposits to GDP ...........................................................35 .....n...............52.6 Money market instruments to GDP ........................................3 .....n ...............10.5
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................36 .....n.................4.0 Bank overhead costs .............................................................13 .....n .................1.4 Public ownership of banks ....................................................23 .....n.................3.0 Bank operating costs to assets ...............................................8 .....n.................0.9 Non-performing bank loans to total loans ...............................9 .....n.................2.0
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....n .............100.0 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................40 .....n.................0.3 IPO proceeds amount ...........................................................44 .....n.................0.1 Share of world IPOs ..............................................................24 .....n.................0.5
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n .................1.1 M&A transaction value to GDP .............................................10 .....n.................8.7 Share of total number of M&A deals ....................................14 .....n.................2.0
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density............................................................10 .....n.................6.1 Non–life insurance density ...................................................29 .....n .................1.9 Real growth of direct insurance premiums ...........................24 .....n.................0.0 Life insurance coverage ........................................................27 .....n.................0.6 Non–life insurance coverage .................................................44 .....n.................0.2 Relative value-added of insurance to GDP ............................30 .....n .................1.0
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................25 .....n .................1.6 Share of total number of securitization deals .......................35 .....n.................0.2
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Sweden
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................18 .....n.................0.6 Outright forward foreign exchange turnover .........................20 .....n.................0.4 Foreign exchange swap turnover...........................................12 .....n .................1.5
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 .............................................................................5 .....n.................2.6 Interest rate derivatives turnover: Swaps..............................21 .....n.................0.1 Interest rate derivatives turnover: Options ............................10 .....n.................0.5 Foreign exchange derivatives turnover: Currency swaps ......32 .....n.................0.1 Foreign exchange derivatives turnover: Options ...................13 .....n.................0.7
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio .....................................................4 .....n .............212.4 Stock market capitalization to GDP .......................................13 .....n .............141.0 Stock market value traded to GDP..........................................7 .....n.............270.9 Number of listed companies per 10,000 people ...................17 .....n.................0.2
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ..............7 .....n...............60.5 Public domestic bond market capitalization to GDP .............26 .....n...............28.9 Private international bonds to GDP .........................................7 .....n...............79.6 Public international bonds to GDP.........................................19 .....n.................6.2 Local currency corporate bond issuance to GDP ..................29 .....n.................0.3
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
253 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication ...............................................6 .....n.................6.4 Venture capital availability........................................................5 .....n.................4.0 Ease of access to credit........................................................34 .....n.................2.8 Financing through local equity market ..................................14 .....n.................4.4 Ease of access to loans ..........................................................9 .....n.................4.2 Foreign direct investment to GDP...........................................6 .....n ...............10.8 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................14 .....n...............25.9 Total number of ATMs...........................................................37 .....n...............36.6 Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Switzerland Key indicators
Financial assets by major type, 2008 8.8%
Population (millions), 2009 .........................................................7.3
US$ bn
GDP (US$ billions), 2009 .........................................................494.6
36.8%
GDP (current prices) per capita, 2009 ............................67,559.6
25.5%
GDP (PPP) as share (%) of world total, 2009 ........................0.45 Compound annual growth rate of real GDP (%), 2005–09 ..1.49
n n n n
Public debt securities .......206.6 Private debt securities......598.6 Banking deposits ...............677.3 Equity securities ................862.7 Total
2,345.2
28.9%
Total/GDP 468.8%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index........................................................8 4.7 1
2
3
4
5
6
7
Factors, policies, and institutions
254
1st pillar: Institutional environment .........................................11
5.7
Financial sector liberalization ....................................................18 Corporate governance...................................................................9 Legal and regulatory issues .........................................................1 Contract enforcement..................................................................20
6.5 5.4 5.7 5.1
2nd pillar: Business environment ...............................................5
5.8
Human capital .................................................................................3 Taxes...............................................................................................15 Infrastructure ..................................................................................5 Cost of doing business ................................................................12
5.6 5.4 6.2 6.0
3rd pillar: Financial stability........................................................5
5.6
Currency stability..........................................................................13 Banking system stability................................................................7 Risk of sovereign debt crisis ........................................................2
4.9 5.6 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......................................15
4.5
Size index .........................................................................................7 Efficiency index.............................................................................23 Financial information disclosure................................................42
5.0 5.4 1.7
5th pillar: Non-banking financial services .............................20
2.7
IPO activity.....................................................................................42 M&A activity..................................................................................12 Insurance .........................................................................................9 Securitization.................................................................................38
1.4 3.9 3.9 1.8
6th pillar: Financial markets........................................................3
5.0
Foreign exchange markets ...........................................................5 Derivatives markets .....................................................................14 Equity market development ..........................................................2 Bond market development..........................................................14
6.2 4.8 5.7 3.7 1
Financial access 7th pillar: Financial access........................................................24
3.6
Commercial access......................................................................12 Retail access.................................................................................22
4.0 3.1 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n...............56.3 Domestic financial sector liberalization .................................31 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ................................5 .....n.................5.0 Efficacy of corporate boards..................................................10 .....n.................5.2 Reliance on professional management ...................................9 .....n.................5.9 Willingness to delegate...........................................................5 .....n.................5.2 Strength of auditing and reporting standards........................17 .....n.................5.6 Ethical behavior of firms..........................................................5 .....n.................6.4 Protection of minority shareholders’ interests ......................24 .....n.................4.7
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation ...........................................5 .....n.................4.2 Centralization of economic policymaking ................................1 .....n.................5.6 Regulation of securities exchanges.........................................7 .....n.................5.6 Property rights.........................................................................1 .....n.................6.4 Intellectual property protection ...............................................4 .....n.................6.0 Diversion of public funds.........................................................5 .....n.................6.1 Public trust of politicians .........................................................7 .....n.................5.2 Corruption perceptions index ..................................................4 .....n.................9.0 Strength of legal rights index ................................................12 .....n.................8.0 Central bank transparency.....................................................18 .....n.................9.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................10 .....n.................5.0 Judicial independence .............................................................3 .....n.................6.4 Irregular payments in judicial decisions...................................7 .....n.................6.5 Time to enforce a contract ....................................................21 .....n..............417.0 Number of procedures to enforce a contract........................19 .....n ...............31.0 Strength of investor protection index....................................54 .....n.................3.0 Cost of enforcing contracts...................................................28 .....n...............24.0
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................1 .....n.................6.1 Quality of math and science education...................................4 .....n.................5.8 Extent of staff training.............................................................2 .....n.................5.5 Local availability of specialized research and training services ...............................................................1 .....n.................6.5 Brain drain and ease of hiring foreign labor ............................1 .....n.................5.7 Tertiary enrollment ................................................................31 .....n ...............47.0
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ........................................8 .....n.................6.5 Distortive effect of taxes and subsidies on competition .......12 .....n.................4.8 Marginal tax variation ............................................................28 .....n .................7.4 Time to pay taxes....................................................................3 .....n...............63.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure ...............................................1 .....n.................6.8 Quality of telephone infrastructure .........................................7 .....n.................6.8 Internet users .........................................................................6 .....n ...............77.0 Broadband Internet subscribers ..............................................4 .....n...............34.2 Telephone lines........................................................................1 .....n...............64.1 Mobile telephone subscribers...............................................39 .....n...............89.1
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business....................................................15 .....n.................2.0
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Switzerland
255
2: Country/Economy Profiles
Switzerland Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ....................................................5 .....n.................0.4 Cost of closing a business ......................................................5 .....n.................4.0 Time to start a business........................................................32 .....n...............20.0 Time to register property ......................................................16 .....n ...............16.0 Time to close a business ......................................................36 .....n.................3.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................41 .....n ...............–0.4 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................12 .....n .................7.0 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................2 .....n .............131.9
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................35 .....n.................2.0 Financial strengths indicator....................................................6 .....n .................7.0 Aggregate measure of real estate bubbles...........................32 .....n.................4.7 Financial Stress Index............................................................16 .....n.................3.9 Tier 1 capital ratio....................................................................2 .....n ...............15.4 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator.....................................19 .....n.................5.4 Manageability of public debt ................................................23 .....n...............40.3 Credit default swap spreads..................................................10 .....n ...............51.5
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
256
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n.............184.6 Central bank assets to GDP ..................................................27 .....n .................1.2 Financial system deposits to GDP ..........................................3 .....n..............157.7 M2 to GDP ..............................................................................5 .....n .............154.6 Private credit to GDP...............................................................7 .....n .............174.8 Bank deposits to GDP .............................................................6 .....n .............133.2 Money market instruments to GDP ......................................22 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................20 .....n.................4.6 Bank overhead costs .............................................................43 .....n.................3.7 Public ownership of banks ....................................................26 .....n.................4.8 Bank operating costs to assets .............................................27 .....n .................1.8 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................35 .....n...............22.5 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................33 .....n.................0.4 IPO proceeds amount ...........................................................40 .....n.................0.1 Share of world IPOs ..............................................................29 .....n.................0.4
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n .................1.6 M&A transaction value to GDP ...............................................6 .....n................11.3 Share of total number of M&A deals ....................................19 .....n .................1.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................13 .....n.................5.3 Non–life insurance density .....................................................3 .....n.................4.5 Real growth of direct insurance premiums ...........................32 .....n.................0.0 Life insurance coverage ........................................................31 .....n.................0.4 Non–life insurance coverage .................................................35 .....n.................0.3 Relative value-added of insurance to GDP ..............................4 .....n.................3.4
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................36 .....n .................1.0 Share of total number of securitization deals .......................35 .....n.................0.2
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Switzerland
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ..............................................3 .....n.................8.5 Outright forward foreign exchange turnover ...........................6 .....n.................4.0 Foreign exchange swap turnover ............................................4 .....n.................5.3
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 .............................................................................6 .....n .................1.8 Interest rate derivatives turnover: Swaps................................5 .....n.................3.5 Interest rate derivatives turnover: Options............................26 .....n.................0.0 Foreign exchange derivatives turnover: Currency swaps ......24 .....n.................0.2 Foreign exchange derivatives turnover: Options .....................3 .....n.................4.7
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio .....................................................6 .....n..............187.7 Stock market capitalization to GDP .........................................2 .....n.............320.4 Stock market value traded to GDP..........................................1 .....n .............541.2 Number of listed companies per 10,000 people ...................15 .....n.................0.3
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............16 .....n...............29.1 Public domestic bond market capitalization to GDP .............31 .....n...............23.7 Private international bonds to GDP .........................................5 .....n...............85.9 Public international bonds to GDP ........................................47 .....n.................0.2 Local currency corporate bond issuance to GDP ....................4 .....n.................3.1
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
257 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication ...............................................1 .....n.................6.6 Venture capital availability......................................................16 .....n.................3.5 Ease of access to credit........................................................28 .....n.................3.1 Financing through local equity market ..................................15 .....n.................4.4 Ease of access to loans.........................................................15 .....n.................3.7 Foreign direct investment to GDP.........................................33 .....n.................3.5 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................51 .....n.................0.0 Total number of ATMs ...........................................................15 .....n...............93.1 Total number of point of sale (POS) devices .........................14 .....n..........1,985.3 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Thailand Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .......................................................67.0
20.1%
19.9%
US$ bn
GDP (US$ billions), 2009 .........................................................263.9 GDP (current prices) per capita, 2009 ..............................3,939.6 12.3%
GDP (PPP) as share (%) of world total, 2009 ........................0.77 Compound annual growth rate of real GDP (%), 2005–09 ..2.01
n n n n
Public debt securities .......103.6 Private debt securities........63.1 Banking deposits ...............245.4 Equity securities ................102.6 Total
514.7
47.7%
Total/GDP 188.9%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................34 3.4 1
2
3
4
5
6
7
Factors, policies, and institutions
258
1st pillar: Institutional environment .........................................31
4.3
Financial sector liberalization ....................................................29 Corporate governance.................................................................34 Legal and regulatory issues .......................................................41 Contract enforcement..................................................................22
4.6 4.3 3.4 5.0
2nd pillar: Business environment .............................................37
4.3
Human capital ...............................................................................34 Taxes...............................................................................................32 Infrastructure ................................................................................38 Cost of doing business ................................................................38
4.2 4.6 3.6 4.8
3rd pillar: Financial stability......................................................25
4.7
Currency stability............................................................................8 Banking system stability..............................................................40 Risk of sovereign debt crisis ......................................................32
5.5 4.0 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......................................33
3.5
Size index .......................................................................................22 Efficiency index.............................................................................34 Financial information disclosure................................................37
3.1 4.7 2.0
5th pillar: Non-banking financial services .............................49
1.6
IPO activity.....................................................................................38 M&A activity..................................................................................42 Insurance .......................................................................................39 Securitization.................................................................................54
1.6 1.5 2.3 1.1
6th pillar: Financial markets......................................................32
2.1
Foreign exchange markets .........................................................30 Derivatives markets .....................................................................28 Equity market development ........................................................42 Bond market development..........................................................19
1.1 1.5 1.8 3.3 1
Financial access 7th pillar: Financial access........................................................36
3.1
Commercial access......................................................................23 Retail access.................................................................................32
3.7 2.5 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................42 .....n ...............–0.1 Commitments to WTO agreement on trade in services.......28 .....n...............49.1 Domestic financial sector liberalization .................................25 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................34 .....n.................4.2 Efficacy of corporate boards .................................................38 .....n.................4.5 Reliance on professional management .................................35 .....n.................4.5 Willingness to delegate.........................................................44 .....n.................3.5 Strength of auditing and reporting standards .......................26 .....n.................5.1 Ethical behavior of firms........................................................37 .....n.................3.8 Protection of minority shareholders’ interests ......................26 .....n.................4.6
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................16 .....n.................3.6 Centralization of economic policymaking ..............................44 .....n.................2.7 Regulation of securities exchanges.......................................23 .....n.................4.8 Property rights.......................................................................46 .....n.................3.9 Intellectual property protection .............................................42 .....n.................3.1 Diversion of public funds.......................................................33 .....n.................3.3 Public trust of politicians .......................................................37 .....n.................2.5 Corruption perceptions index ................................................41 .....n.................3.4 Strength of legal rights index ................................................40 .....n.................4.0 Central bank transparency.....................................................25 .....n.................8.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................34 .....n.................3.4 Judicial independence ...........................................................30 .....n.................4.3 Irregular payments in judicial decisions.................................33 .....n.................4.4 Time to enforce a contract ....................................................25 .....n.............479.0 Number of procedures to enforce a contract .......................30 .....n...............35.0 Strength of investor protection index ....................................11 .....n .................7.7 Cost of enforcing contracts.....................................................6 .....n ...............12.3
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................35 .....n.................4.4 Quality of math and science education.................................34 .....n.................4.3 Extent of staff training...........................................................36 .....n.................4.1 Local availability of specialized research and training services .............................................................45 .....n.................4.1 Brain drain and ease of hiring foreign labor ..........................26 .....n.................4.1 Tertiary enrollment ................................................................30 .....n...............48.3
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................43 .....n.................4.1 Distortive effect of taxes and subsidies on competition.......36 .....n.................4.0 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes..................................................................33 .....n.............264.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................29 .....n.................4.9 Quality of telephone infrastructure .......................................32 .....n.................6.3 Internet users .......................................................................45 .....n...............23.9 Broadband Internet subscribers ............................................48 .....n .................1.4 Telephone lines......................................................................48 .....n ...............10.4 Mobile telephone subscribers ...............................................17 .....n .............121.1
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................30 .....n.................6.3
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Thailand
259
2: Country/Economy Profiles
Thailand Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................12 .....n .................1.1 Cost of closing a business ....................................................54 .....n...............36.0 Time to start a business........................................................45 .....n...............32.0 Time to register property ........................................................1 .....n.................2.0 Time to close a business ......................................................32 .....n.................2.7
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................16 .....n.................2.5 External vulnerability indicator ...............................................11 .....n ...............31.9 Current account balance to GDP ...........................................17 .....n.................4.9 Dollarization vulnerability indicator ........................................25 .....n.................2.5 External debt to GDP (developing economies)......................11 .....n...............25.7 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................46 .....n.................2.3 Financial strengths indicator..................................................41 .....n.................3.0 Aggregate measure of real estate bubbles...........................20 .....n.................5.3 Financial Stress Index .............................................................1 .....n ...............–0.2 Tier 1 capital ratio ..................................................................18 .....n................11.3 Output loss during banking crises.........................................56 .....n.............182.6
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................34 .....n ...............14.0 Foreign currency sovereign rating .........................................32 .....n ...............12.7 Aggregate macroprudential indicator ....................................23 .....n.................5.3 Manageability of public debt ................................................29 .....n...............46.3 Credit default swap spreads .................................................28 .....n .............132.1
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
260
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............88.4 Central bank assets to GDP ..................................................15 .....n.................2.8 Financial system deposits to GDP ........................................18 .....n...............84.5 M2 to GDP ............................................................................14 .....n ..............117.3 Private credit to GDP.............................................................29 .....n ...............77.9 Bank deposits to GDP ...........................................................19 .....n...............84.1 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................56 .....n.................2.3 Bank overhead costs .............................................................18 .....n .................1.9 Public ownership of banks ....................................................27 .....n.................5.6 Bank operating costs to assets .............................................34 .....n.................2.4 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................30 .....n...............32.9 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................41 .....n.................0.2 IPO proceeds amount ...........................................................37 .....n.................0.1 Share of world IPOs ..............................................................20 .....n .................1.3
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.2 M&A transaction value to GDP .............................................45 .....n.................2.1 Share of total number of M&A deals ....................................26 .....n.................0.7
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................27 .....n.................2.4 Non–life insurance density ...................................................37 .....n .................1.6 Real growth of direct insurance premiums ...........................27 .....n.................0.0 Life insurance coverage.........................................................13 .....n .................1.6 Non–life insurance coverage .................................................18 .....n .................1.1 Relative value-added of insurance to GDP ............................50 .....n.................0.5
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................53 .....n.................0.1 Share of total number of securitization deals .......................42 .....n.................0.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Thailand
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................36 .....n.................0.1 Outright forward foreign exchange turnover .........................27 .....n.................0.2 Foreign exchange swap turnover ..........................................29 .....n.................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 ...........................................................................27 .....n.................0.0 Interest rate derivatives turnover: Swaps..............................26 .....n.................0.0 Interest rate derivatives turnover: Options............................19 .....n.................0.2 Foreign exchange derivatives turnover: Currency swaps ......23 .....n.................0.3 Foreign exchange derivatives turnover: Options ...................35 .....n.................0.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................38 .....n...............42.3 Stock market capitalization to GDP .......................................32 .....n...............73.3 Stock market value traded to GDP........................................29 .....n...............39.7 Number of listed companies per 10,000 people...................26 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............21 .....n ...............19.3 Public domestic bond market capitalization to GDP .............15 .....n...............42.6 Private international bonds to GDP .......................................39 .....n.................3.3 Public international bonds to GDP ........................................45 .....n.................0.3 Local currency corporate bond issuance to GDP ....................1 .....n.................3.7
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
261 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................29 .....n.................5.1 Venture capital availability......................................................31 .....n.................2.9 Ease of access to credit ........................................................18 .....n.................3.5 Financing through local equity market ..................................18 .....n.................4.3 Ease of access to loans ........................................................20 .....n.................3.4 Foreign direct investment to GDP.........................................29 .....n.................3.8 Retail access Market penetration of bank accounts....................................17 .....n ......144,883.8 Commercial bank branches ...................................................37 .....n................11.0 Total number of ATMs ...........................................................18 .....n ...............71.3 Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .....................................................................28 .....n.................0.1
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Turkey Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .......................................................70.5
16.7%
US$ bn
GDP (US$ billions), 2009 .........................................................615.3 GDP (current prices) per capita, 2009 ..............................8,723.4
41.5%
GDP (PPP) as share (%) of world total, 2009 ........................1.25 Compound annual growth rate of real GDP (%), 2005–09 ..1.42
n n n n
Public debt securities .......292.2 Private debt securities........10.8 Banking deposits ...............283.7 Equity securities ................117.9 Total
40.3%
704.6
1.5%
Total/GDP 96.5%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................42 3.2 1
2
3
4
5
6
7
Factors, policies, and institutions
262
1st pillar: Institutional environment .........................................39
3.8
Financial sector liberalization ....................................................37 Corporate governance.................................................................51 Legal and regulatory issues .......................................................42 Contract enforcement..................................................................28
3.7 3.8 3.3 4.5
2nd pillar: Business environment .............................................29
4.6
Human capital ...............................................................................47 Taxes...............................................................................................22 Infrastructure ................................................................................27 Cost of doing business ................................................................23
3.6 5.0 4.5 5.4
3rd pillar: Financial stability......................................................51
3.7
Currency stability..........................................................................48 Banking system stability..............................................................22 Risk of sovereign debt crisis ......................................................50
2.6 4.9 3.2 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......................................40
3.1
Size index .......................................................................................45 Efficiency index.............................................................................36 Financial information disclosure................................................25
1.5 4.7 3.1
5th pillar: Non-banking financial services .............................41
1.9
IPO activity.....................................................................................31 M&A activity..................................................................................40 Insurance .......................................................................................49 Securitization.................................................................................27
1.8 1.5 1.8 2.4
6th pillar: Financial markets......................................................39
1.9
Foreign exchange markets .........................................................34 Derivatives markets .....................................................................23 Equity market development ........................................................41 Bond market development..........................................................26
1.1 2.2 1.8 2.2 1
Financial access 7th pillar: Financial access........................................................31
3.3
Commercial access......................................................................40 Retail access.................................................................................18
3.3 3.3 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................44 .....n.................0.1 Commitments to WTO agreement on trade in services.......20 .....n...............83.5 Domestic financial sector liberalization .................................46 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................56 .....n.................3.2 Efficacy of corporate boards .................................................49 .....n.................4.2 Reliance on professional management .................................45 .....n.................4.1 Willingness to delegate.........................................................56 .....n.................2.8 Strength of auditing and reporting standards .......................44 .....n.................4.4 Ethical behavior of firms........................................................39 .....n.................3.7 Protection of minority shareholders’ interests ......................48 .....n.................3.9
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................28 .....n.................3.1 Centralization of economic policymaking ..............................50 .....n.................2.3 Regulation of securities exchanges.......................................29 .....n.................4.6 Property rights.......................................................................43 .....n.................4.0 Intellectual property protection .............................................52 .....n.................2.6 Diversion of public funds.......................................................37 .....n.................3.2 Public trust of politicians .......................................................35 .....n.................2.5 Corruption perceptions index ................................................32 .....n.................4.4 Strength of legal rights index ................................................40 .....n.................4.0 Central bank transparency.....................................................18 .....n.................9.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................27 .....n.................4.0 Judicial independence ...........................................................46 .....n.................3.4 Irregular payments in judicial decisions.................................40 .....n.................3.6 Time to enforce a contract ....................................................22 .....n.............420.0 Number of procedures to enforce a contract .......................30 .....n...............35.0 Strength of investor protection index....................................27 .....n.................5.7 Cost of enforcing contracts ...................................................18 .....n...............18.8
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................52 .....n.................3.6 Quality of math and science education.................................44 .....n.................3.4 Extent of staff training...........................................................43 .....n.................3.7 Local availability of specialized research and training services .............................................................39 .....n.................4.2 Brain drain and ease of hiring foreign labor ..........................50 .....n.................3.4 Tertiary enrollment ................................................................36 .....n...............36.3
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................27 .....n.................5.3 Distortive effect of taxes and subsidies on competition.......42 .....n.................3.9 Marginal tax variation ............................................................19 .....n ...............–3.1 Time to pay taxes..................................................................28 .....n.............223.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................27 .....n.................5.1 Quality of telephone infrastructure .......................................28 .....n.................6.4 Internet users .......................................................................32 .....n...............34.4 Broadband Internet subscribers ............................................32 .....n .................7.8 Telephone lines......................................................................32 .....n...............23.7 Mobile telephone subscribers.................................................1 .....n.............208.7
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................43 .....n ...............14.2
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Turkey
263
2: Country/Economy Profiles
Turkey Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................26 .....n.................3.0 Cost of closing a business ....................................................31 .....n ...............15.0 Time to start a business..........................................................7 .....n.................6.0 Time to register property ........................................................8 .....n.................6.0 Time to close a business ......................................................40 .....n.................3.3
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................39 .....n.................0.0 External vulnerability indicator...............................................32 .....n .............154.5 Current account balance to GDP...........................................48 .....n ...............–4.6 Dollarization vulnerability indicator ........................................41 .....n...............85.9 External debt to GDP (developing economies) .....................23 .....n...............45.1 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................46 .....n.................2.3 Financial strengths indicator..................................................22 .....n.................5.0 Aggregate measure of real estate bubbles ...........................15 .....n.................5.7 Financial Stress Index .............................................................2 .....n ...............–0.1 Tier 1 capital ratio....................................................................7 .....n ...............12.9 Output loss during banking crises.........................................44 .....n ...............81.8
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................47 .....n ...............10.0 Foreign currency sovereign rating .........................................46 .....n.................9.3 Aggregate macroprudential indicator ....................................54 .....n.................3.0 Manageability of public debt ................................................28 .....n...............46.3 Credit default swap spreads .................................................39 .....n.............186.4
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
264
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............48.5 Central bank assets to GDP ..................................................19 .....n .................1.8 Financial system deposits to GDP ........................................42 .....n...............39.9 M2 to GDP ............................................................................54 .....n...............32.9 Private credit to GDP.............................................................45 .....n...............30.8 Bank deposits to GDP ...........................................................44 .....n...............39.8 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator.............................................16 .....n.................4.7 Bank overhead costs .............................................................44 .....n.................3.9 Public ownership of banks ....................................................43 .....n...............26.3 Bank operating costs to assets .............................................40 .....n.................2.8 Non-performing bank loans to total loans .............................30 .....n.................5.7
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................25 .....n...............42.9 Public credit registry coverage ..............................................12 .....n ...............15.9
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share...................................................................17 .....n .................1.1 IPO proceeds amount ...........................................................28 .....n.................0.3 Share of world IPOs ..............................................................33 .....n.................0.3
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.4 M&A transaction value to GDP .............................................44 .....n.................2.2 Share of total number of M&A deals ....................................39 .....n.................0.3
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................50 .....n.................0.2 Non–life insurance density ...................................................45 .....n .................1.1 Real growth of direct insurance premiums ...........................39 .....n.................0.0 Life insurance coverage ........................................................43 .....n.................0.1 Non–life insurance coverage .................................................22 .....n.................0.8 Relative value-added of insurance to GDP ............................27 .....n .................1.1
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................21 .....n .................1.8 Share of total number of securitization deals .......................24 .....n.................0.4
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Turkey
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ............................................41 .....n.................0.1 Outright forward foreign exchange turnover .........................28 .....n.................0.2 Foreign exchange swap turnover ..........................................32 .....n.................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 ...........................................................................29 .....n.................0.0 Interest rate derivatives turnover: Swaps..............................34 .....n.................0.0 Interest rate derivatives turnover: Options............................24 .....n.................0.0 Foreign exchange derivatives turnover: Currency swaps ......11 .....n .................1.5 Foreign exchange derivatives turnover: Options ...................23 .....n.................0.1
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ...................................................21 .....n...............79.2 Stock market capitalization to GDP .......................................44 .....n ...............37.9 Stock market value traded to GDP........................................25 .....n...............49.7 Number of listed companies per 10,000 people...................33 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............38 .....n.................0.1 Public domestic bond market capitalization to GDP .............19 .....n...............36.5 Private international bonds to GDP .......................................46 .....n .................1.9 Public international bonds to GDP.........................................16 .....n .................7.4 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
265 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................31 .....n.................5.0 Venture capital availability......................................................51 .....n.................2.2 Ease of access to credit ........................................................14 .....n.................3.6 Financing through local equity market ..................................32 .....n.................3.9 Ease of access to loans ........................................................43 .....n.................2.6 Foreign direct investment to GDP.........................................38 .....n.................3.0 Retail access Market penetration of bank accounts ...................................15 .....n ......166,120.7 Commercial bank branches ...................................................25 .....n................17.8 Total number of ATMs...........................................................32 .....n...............44.3 Total number of point of sale (POS) devices...........................4 .....n..........3,232.8 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................29 .....n.................0.0
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Ukraine Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .......................................................45.7
19.2%
25.2%
US$ bn
GDP (US$ billions), 2009 .........................................................116.2 GDP (current prices) per capita, 2009 ..............................2,542.1
7.4%
GDP (PPP) as share (%) of world total, 2009 ........................0.42 Compound annual growth rate of real GDP (%), 2005–09 ..0.07
n n n n
Public debt securities .........18.6 Private debt securities..........7.1 Banking deposits .................46.6 Equity securities ..................24.4 Total
96.7
48.2%
Total/GDP 53.6%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................53 2.8 1
2
3
4
5
6
7
Factors, policies, and institutions
266
1st pillar: Institutional environment .........................................55
2.8
Financial sector liberalization ....................................................53 Corporate governance.................................................................56 Legal and regulatory issues .......................................................54 Contract enforcement..................................................................49
1.7 3.5 2.8 3.3
2nd pillar: Business environment .............................................44
3.9
Human capital ...............................................................................31 Taxes...............................................................................................50 Infrastructure ................................................................................39 Cost of doing business ................................................................47
4.3 3.8 3.6 4.1
3rd pillar: Financial stability......................................................55
3.1
Currency stability..........................................................................49 Banking system stability..............................................................32 Risk of sovereign debt crisis ......................................................56
2.5 4.3 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......................................50
2.6
Size index .....................................................................................n/a Efficiency index.............................................................................52 Financial information disclosure................................................53
n/a 3.4 1.1
5th pillar: Non-banking financial services .............................24
2.5
IPO activity.....................................................................................22 M&A activity..................................................................................34 Insurance .......................................................................................35 Securitization.................................................................................12
2.2 1.7 2.5 3.5
6th pillar: Financial markets......................................................48
1.6
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................46 Bond market development..........................................................41
n/a n/a 1.6 1.6 1
Financial access 7th pillar: Financial access........................................................48
2.8
Commercial access......................................................................53 Retail access.................................................................................29
2.8 2.8 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................49 .....n ...............–1.1 Commitments to WTO agreement on trade in services ......n/a .........................n/a Domestic financial sector liberalization .................................54 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................44 .....n.................4.0 Efficacy of corporate boards .................................................45 .....n.................4.3 Reliance on professional management .................................57 .....n.................3.5 Willingness to delegate.........................................................55 .....n.................3.0 Strength of auditing and reporting standards .......................56 .....n.................3.5 Ethical behavior of firms........................................................57 .....n.................3.0 Protection of minority shareholders’ interests ......................57 .....n.................2.8
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................51 .....n.................2.6 Centralization of economic policymaking ..............................34 .....n.................3.0 Regulation of securities exchanges.......................................57 .....n.................2.7 Property rights.......................................................................56 .....n.................2.6 Intellectual property protection .............................................51 .....n.................2.6 Diversion of public funds.......................................................54 .....n.................2.2 Public trust of politicians .......................................................50 .....n .................1.9 Corruption perceptions index ................................................55 .....n.................2.2 Strength of legal rights index ..................................................4 .....n.................9.0 Central bank transparency.....................................................40 .....n.................4.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................55 .....n.................2.0 Judicial independence ...........................................................56 .....n.................2.0 Irregular payments in judicial decisions.................................57 .....n .................1.9 Time to enforce a contract ......................................................9 .....n.............345.0 Number of procedures to enforce a contract ........................11 .....n...............30.0 Strength of investor protection index....................................44 .....n.................4.7 Cost of enforcing contracts...................................................52 .....n ...............41.5
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................54 .....n.................3.5 Quality of math and science education.................................24 .....n.................4.6 Extent of staff training...........................................................53 .....n.................3.4 Local availability of specialized research and training services .............................................................51 .....n.................3.9 Brain drain and ease of hiring foreign labor ..........................51 .....n.................3.3 Tertiary enrollment ..................................................................5 .....n...............79.4
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................52 .....n.................3.2 Distortive effect of taxes and subsidies on competition.......55 .....n.................2.9 Marginal tax variation ..............................................................4 .....n .............–18.1 Time to pay taxes..................................................................53 .....n.............736.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................37 .....n.................4.1 Quality of telephone infrastructure .......................................48 .....n.................5.5 Internet users .......................................................................51 .....n ...............10.6 Broadband Internet subscribers ............................................43 .....n.................3.5 Telephone lines......................................................................27 .....n...............28.7 Mobile telephone subscribers ...............................................13 .....n .............126.3
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................26 .....n.................5.8
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Ukraine
267
2: Country/Economy Profiles
Ukraine Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................22 .....n.................2.6 Cost of closing a business ....................................................57 .....n...............42.0 Time to start a business........................................................38 .....n ...............27.0 Time to register property ......................................................52 .....n...............93.0 Time to close a business ......................................................35 .....n.................2.9
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................21 .....n .................1.9 External vulnerability indicator...............................................31 .....n .............138.8 Current account balance to GDP...........................................44 .....n ...............–4.1 Dollarization vulnerability indicator ........................................39 .....n...............56.8 External debt to GDP (developing economies) .....................32 .....n...............88.6 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................55 .....n.................3.5 Financial strengths indicator..................................................53 .....n .................1.0 Aggregate measure of real estate bubbles...........................28 .....n.................4.8 Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio....................................................................3 .....n ...............14.4 Output loss during banking crises.........................................25 .....n ...............10.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................53 .....n .................7.0 Foreign currency sovereign rating .........................................54 .....n.................6.0 Aggregate macroprudential indicator ....................................57 .....n .................1.7 Manageability of public debt ..................................................8 .....n...............20.2 Credit default swap spreads .................................................49 .....n.............628.7
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
268
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 ............................................................................40 .....n...............53.8 Private credit to GDP ............................................................n/a .........................n/a Bank deposits to GDP ...........................................................51 .....n...............25.9 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................47 .....n.................3.2 Bank overhead costs .............................................................42 .....n.................3.7 Public ownership of banks ....................................................36 .....n................11.9 Bank operating costs to assets .............................................51 .....n.................4.0 Non-performing bank loans to total loans .............................41 .....n...............33.8
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................47 .....n.................3.0 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................32 .....n.................0.5 IPO proceeds amount ...........................................................12 .....n.................0.5 Share of world IPOs ..............................................................29 .....n.................0.4
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.2 M&A transaction value to GDP .............................................33 .....n.................3.6 Share of total number of M&A deals ....................................25 .....n.................0.7
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................52 .....n.................0.1 Non–life insurance density ...................................................23 .....n.................2.2 Real growth of direct insurance premiums ..........................n/a .........................n/a Life insurance coverage ........................................................50 .....n.................0.0 Non–life insurance coverage .................................................19 .....n .................1.0 Relative value-added of insurance to GDP ............................10 .....n.................2.2
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................16 .....n.................2.3 Share of total number of securitization deals........................14 .....n .................1.1
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Ukraine
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 ...................................................50 .....n .................1.2 Stock market capitalization to GDP .......................................27 .....n ...............97.7 Stock market value traded to GDP........................................42 .....n .................1.9 Number of listed companies per 10,000 people...................28 .....n.................0.1
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................31 .....n.................6.1 Public international bonds to GDP ........................................21 .....n.................6.0 Local currency corporate bond issuance to GDP ..................39 .....n.................0.0
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
269 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................57 .....n.................3.1 Venture capital availability......................................................56 .....n .................1.9 Ease of access to credit........................................................54 .....n .................1.9 Financing through local equity market ..................................56 .....n.................2.3 Ease of access to loans ........................................................56 .....n .................1.9 Foreign direct investment to GDP .........................................10 .....n.................9.2 Retail access Market penetration of bank accounts .....................................3 .....n ......314,532.3 Commercial bank branches ...................................................49 .....n.................2.7 Total number of ATMs ...........................................................17 .....n ...............71.3 Total number of point of sale (POS) devices.........................28 .....n..............187.2 Microfinance institution (MFI) borrowers’ penetration rate .....................................................................22 .....n.................0.6
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
United Arab Emirates Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .........................................................4.9
22.0%
US$ bn
23.1%
GDP (US$ billions), 2009 .........................................................230.0 GDP (current prices) per capita, 2009 ............................46,856.8 GDP (PPP) as share (%) of world total, 2009 ........................0.27 Compound annual growth rate of real GDP (%), 2005–09 ..3.79
16.0%
n n n n
Public debt securities .......103.0 Private debt securities........71.4 Banking deposits ...............173.5 Equity securities ..................97.9 Total
38.9%
445.7
Total/GDP 170.6%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................21 4.0 1
2
3
4
5
6
7
Factors, policies, and institutions
270
1st pillar: Institutional environment .........................................23
4.8
Financial sector liberalization ....................................................27 Corporate governance.................................................................20 Legal and regulatory issues .......................................................20 Contract enforcement..................................................................36
5.6 5.0 4.4 4.1
2nd pillar: Business environment .............................................21
5.1
Human capital ...............................................................................22 Taxes.................................................................................................3 Infrastructure ................................................................................25 Cost of doing business ................................................................39
4.6 6.3 4.8 4.7
3rd pillar: Financial stability........................................................6
5.5
Currency stability........................................................................n/a Banking system stability................................................................4 Risk of sovereign debt crisis ......................................................29
n/a 5.8 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......................................20
4.2
Size index .....................................................................................n/a Efficiency index.............................................................................24 Financial information disclosure................................................41
n/a 5.4 1.7
5th pillar: Non-banking financial services .............................28
2.3
IPO activity.....................................................................................15 M&A activity..................................................................................44 Insurance .......................................................................................36 Securitization.................................................................................29
3.1 1.3 2.5 2.3
6th pillar: Financial markets......................................................28
2.3
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................29 Bond market development ........................................................n/a
n/a n/a 2.3 n/a 1
Financial access 7th pillar: Financial access........................................................15
4.1
Commercial access......................................................................10 Retail access.................................................................................12
4.1 4.1 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.......27 .....n...............38.6 Domestic financial sector liberalization .................................32 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................20 .....n.................4.5 Efficacy of corporate boards .................................................25 .....n.................4.8 Reliance on professional management .................................23 .....n.................5.0 Willingness to delegate .........................................................17 .....n.................4.6 Strength of auditing and reporting standards .......................23 .....n.................5.4 Ethical behavior of firms........................................................18 .....n.................5.4 Protection of minority shareholders’ interests ......................14 .....n.................5.1
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation ...........................................4 .....n.................4.3 Centralization of economic policymaking ..............................18 .....n.................3.7 Regulation of securities exchanges.......................................18 .....n.................5.1 Property rights.......................................................................26 .....n.................5.0 Intellectual property protection .............................................16 .....n.................5.3 Diversion of public funds.......................................................18 .....n.................5.2 Public trust of politicians .........................................................4 .....n.................5.6 Corruption perceptions index ................................................20 .....n.................6.5 Strength of legal rights index ................................................40 .....n.................4.0 Central bank transparency.....................................................46 .....n.................2.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................13 .....n.................4.6 Judicial independence ...........................................................23 .....n.................4.9 Irregular payments in judicial decisions.................................19 .....n.................5.8 Time to enforce a contract ....................................................34 .....n .............537.0 Number of procedures to enforce a contract .......................56 .....n...............49.0 Strength of investor protection index....................................49 .....n.................4.3 Cost of enforcing contracts...................................................34 .....n...............26.2
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................21 .....n.................5.0 Quality of math and science education.................................14 .....n.................4.9 Extent of staff training...........................................................22 .....n.................4.7 Local availability of specialized research and training services .............................................................20 .....n.................5.1 Brain drain and ease of hiring foreign labor ............................2 .....n.................5.7 Tertiary enrollment ................................................................48 .....n...............22.9
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection.......................................10 .....n.................6.4 Distortive effect of taxes and subsidies on competition.........6 .....n.................5.4 Marginal tax variation ..............................................................9 .....n .............–14.1 Time to pay taxes....................................................................1 .....n ...............12.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................10 .....n.................6.2 Quality of telephone infrastructure .......................................21 .....n.................6.5 Internet users .......................................................................20 .....n...............65.2 Broadband Internet subscribers ............................................27 .....n ...............12.4 Telephone lines......................................................................23 .....n...............33.6 Mobile telephone subscribers...............................................41 .....n...............86.8
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................29 .....n.................6.2
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
United Arab Emirates
271
2: Country/Economy Profiles
United Arab Emirates Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................17 .....n.................2.0 Cost of closing a business ....................................................53 .....n...............30.0 Time to start a business........................................................27 .....n ...............15.0 Time to register property ........................................................1 .....n.................2.0 Time to close a business ......................................................53 .....n.................5.1
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) ....................n/a .........................n/a External vulnerability indicator...............................................34 .....n .............257.7 Current account balance to GDP...........................................16 .....n.................4.9 Dollarization vulnerability indicator .......................................n/a .........................n/a External debt to GDP (developing economies) .....................29 .....n ...............61.8 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises....................................................1 .....n.................0.0 Financial strengths indicator..................................................32 .....n.................4.0 Aggregate measure of real estate bubbles ...........................17 .....n.................5.6 Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio....................................................................6 .....n ...............13.4 Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating............................................n/a .........................n/a Foreign currency sovereign rating ........................................n/a .........................n/a Aggregate macroprudential indicator.....................................15 .....n.................5.5 Manageability of public debt ................................................34 .....n...............49.8 Credit default swap spreads .................................................46 .....n.............298.6
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
272
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 ............................................................................21 .....n ...............87.7 Private credit to GDP ............................................................n/a .........................n/a Bank deposits to GDP ...........................................................28 .....n...............66.4 Money market instruments to GDP ......................................17 .....n.................0.5
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ..............................................3 .....n.................6.3 Bank overhead costs ...............................................................7 .....n .................1.3 Public ownership of banks ....................................................53 .....n...............58.2 Bank operating costs to assets .............................................16 .....n .................1.2 Non-performing bank loans to total loans .............................23 .....n.................4.6
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................40 .....n ...............12.6 Public credit registry coverage ..............................................14 .....n .................7.3
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................16 .....n .................1.2 IPO proceeds amount .............................................................5 .....n.................0.8 Share of world IPOs ..............................................................37 .....n.................0.3
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.2 M&A transaction value to GDP .............................................42 .....n.................2.3 Share of total number of M&A deals ....................................44 .....n.................0.2
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................48 .....n.................0.3 Non–life insurance density ...................................................31 .....n .................1.9 Real growth of direct insurance premiums .............................7 .....n.................0.1 Life insurance coverage ........................................................53 .....n.................0.0 Non–life insurance coverage .................................................53 .....n.................0.1 Relative value-added of insurance to GDP ............................23 .....n .................1.3
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................20 .....n .................1.8 Share of total number of securitization deals .......................30 .....n.................0.2
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
United Arab Emirates
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 .....n...............53.8 Stock market capitalization to GDP ......................................n/a .........................n/a Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people...................18 .....n.................0.2
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................21 .....n...............28.4 Public international bonds to GDP ........................................31 .....n.................2.5 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
273 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................27 .....n.................5.2 Venture capital availability......................................................12 .....n.................3.7 Ease of access to credit........................................................26 .....n.................3.2 Financing through local equity market ..................................17 .....n.................4.3 Ease of access to loans ..........................................................6 .....n.................4.3 Foreign direct investment to GDP .........................................15 .....n.................6.0 Retail access Market penetration of bank accounts ...................................13 .....n ......175,064.5 Commercial bank branches ...................................................19 .....n...............20.9 Total number of ATMs ...........................................................12 .....n...............99.3 Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
United Kingdom Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .......................................................61.8
13.5%
17.9%
US$ bn
GDP (US$ billions), 2009 ......................................................2,183.6 GDP (current prices) per capita, 2009 ............................35,334.3 GDP (PPP) as share (%) of world total, 2009 ........................3.10 Compound annual growth rate of real GDP (%), 2005–09 ..0.17
33.6%
n n n n
35.0%
Public debt securities ....1,396.7 Private debt securities...3,484.0 Banking deposits ............3,630.9 Equity securities .............1,852.0 Total
10,363.5
Total/GDP 386.1%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index........................................................2 5.1 1
2
3
4
5
6
7
Factors, policies, and institutions
274
1st pillar: Institutional environment ...........................................6
5.8
Financial sector liberalization ......................................................1 Corporate governance.................................................................10 Legal and regulatory issues .......................................................13 Contract enforcement....................................................................4
7.0 5.4 4.9 5.9
2nd pillar: Business environment .............................................15
5.4
Human capital ...............................................................................13 Taxes...............................................................................................29 Infrastructure ..................................................................................9 Cost of doing business ..................................................................8
5.1 4.8 5.8 6.2
3rd pillar: Financial stability......................................................46
4.0
Currency stability..........................................................................45 Banking system stability..............................................................54 Risk of sovereign debt crisis ......................................................20
3.2 3.3 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........................................1
5.4
Size index .........................................................................................1 Efficiency index.............................................................................26 Financial information disclosure..................................................3
6.0 5.3 4.0
5th pillar: Non-banking financial services ...............................2
5.5
IPO activity.......................................................................................5 M&A activity....................................................................................1 Insurance .........................................................................................3 Securitization...................................................................................2
4.1 6.9 4.5 6.5
6th pillar: Financial markets........................................................4
5.0
Foreign exchange markets ...........................................................1 Derivatives markets .......................................................................1 Equity market development ........................................................18 Bond market development..........................................................11
7.0 7.0 3.5 3.9 1
Financial access 7th pillar: Financial access........................................................10
4.3
Commercial access......................................................................29 Retail access...................................................................................8
3.6 5.0 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.5 Commitments to WTO agreement on trade in services.........1 .....n...............73.9 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ................................7 .....n.................5.0 Efficacy of corporate boards..................................................12 .....n.................5.2 Reliance on professional management ...................................6 .....n.................6.0 Willingness to delegate .........................................................13 .....n.................4.8 Strength of auditing and reporting standards........................14 .....n.................5.6 Ethical behavior of firms........................................................12 .....n.................6.0 Protection of minority shareholders’ interests ......................10 .....n.................5.1
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................32 .....n.................3.1 Centralization of economic policymaking ..............................46 .....n.................2.5 Regulation of securities exchanges.......................................26 .....n.................4.8 Property rights .......................................................................15 .....n.................5.8 Intellectual property protection .............................................14 .....n.................5.5 Diversion of public funds.........................................................9 .....n.................5.8 Public trust of politicians .......................................................29 .....n.................3.2 Corruption perceptions index ................................................14 .....n .................7.7 Strength of legal rights index ..................................................4 .....n.................9.0 Central bank transparency.......................................................2 .....n ...............12.5
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ........................................8 .....n.................5.1 Judicial independence .............................................................6 .....n.................6.3 Irregular payments in judicial decisions.................................16 .....n.................6.2 Time to enforce a contract ....................................................18 .....n.............399.0 Number of procedures to enforce a contract ........................11 .....n...............30.0 Strength of investor protection index......................................9 .....n.................8.0 Cost of enforcing contracts...................................................26 .....n...............23.4
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................8 .....n.................5.5 Quality of math and science education.................................33 .....n.................4.4 Extent of staff training...........................................................21 .....n.................4.7 Local availability of specialized research and training services .............................................................12 .....n.................5.7 Brain drain and ease of hiring foreign labor ............................7 .....n.................4.9 Tertiary enrollment ................................................................22 .....n...............59.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................18 .....n.................6.1 Distortive effect of taxes and subsidies on competition.......21 .....n.................4.4 Marginal tax variation ............................................................37 .....n................17.0 Time to pay taxes ..................................................................11 .....n .............110.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................22 .....n.................5.3 Quality of telephone infrastructure .......................................23 .....n.................6.5 Internet users .........................................................................8 .....n ...............76.2 Broadband Internet subscribers ............................................10 .....n...............28.2 Telephone lines........................................................................7 .....n...............54.2 Mobile telephone subscribers...............................................32 .....n...............96.3
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business .....................................................6 .....n.................0.7
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
United Kingdom
275
2: Country/Economy Profiles
United Kingdom Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................31 .....n.................4.1 Cost of closing a business ....................................................14 .....n.................6.0 Time to start a business........................................................21 .....n ...............13.0 Time to register property ........................................................9 .....n.................8.0 Time to close a business ........................................................8 .....n .................1.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................51 .....n ...............–4.5 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................37 .....n ...............–1.8 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies).............................................................9 .....n .............–13.1
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................35 .....n.................2.0 Financial strengths indicator..................................................22 .....n.................5.0 Aggregate measure of real estate bubbles...........................41 .....n.................3.1 Financial Stress Index ...........................................................39 .....n ...............15.1 Tier 1 capital ratio..................................................................26 .....n.................9.8 Output loss during banking crises.........................................37 .....n...............48.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating .........................................14 .....n ...............19.7 Aggregate macroprudential indicator ....................................39 .....n.................4.6 Manageability of public debt ................................................47 .....n...............68.1 Credit default swap spreads..................................................14 .....n ...............74.6
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
276
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n.............189.6 Central bank assets to GDP ..................................................20 .....n .................1.7 Financial system deposits to GDP ..........................................4 .....n .............151.6 M2 to GDP ..............................................................................7 .....n .............146.5 Private credit to GDP...............................................................5 .....n.............189.6 Bank deposits to GDP .............................................................3 .....n .............153.6 Money market instruments to GDP ........................................4 .....n ...............10.1
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................42 .....n.................3.6 Bank overhead costs .............................................................14 .....n .................1.4 Public ownership of banks ....................................................42 .....n...............24.8 Bank operating costs to assets .............................................15 .....n .................1.2 Non-performing bank loans to total loans .............................17 .....n.................3.3
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....n .............100.0 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................4 .....n.................4.4 IPO proceeds amount ...........................................................25 .....n.................0.3 Share of world IPOs ................................................................8 .....n.................5.3
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................9.3 M&A transaction value to GDP ...............................................3 .....n ...............12.5 Share of total number of M&A deals ......................................4 .....n .................7.4
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density .............................................................3 .....n ...............10.0 Non–life insurance density .....................................................4 .....n.................4.2 Real growth of direct insurance premiums ...........................48 .....n ...............–0.1 Life insurance coverage ..........................................................5 .....n.................6.2 Non–life insurance coverage ...................................................8 .....n.................2.6 Relative value-added of insurance to GDP ............................20 .....n .................1.5
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ..............................................................2 .....n.................5.8 Share of total number of securitization deals .........................5 .....n.................2.7
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
United Kingdom
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ..............................................1 .....n...............26.3 Outright forward foreign exchange turnover ...........................1 .....n...............29.2 Foreign exchange swap turnover ............................................1 .....n...............40.8
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 .............................................................................1 .....n...............45.1 Interest rate derivatives turnover: Swaps................................1 .....n...............45.8 Interest rate derivatives turnover: Options..............................2 .....n...............34.1 Foreign exchange derivatives turnover: Currency swaps ........1 .....n...............46.7 Foreign exchange derivatives turnover: Options .....................1 .....n...............42.4
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio ..................................................n/a .........................n/a Stock market capitalization to GDP .......................................14 .....n .............136.6 Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people ...................13 .....n.................0.4
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............24 .....n................17.6 Public domestic bond market capitalization to GDP ...............9 .....n...............46.3 Private international bonds to GDP .........................................3 .....n .............134.4 Public international bonds to GDP ........................................38 .....n .................1.3 Local currency corporate bond issuance to GDP ..................19 .....n .................1.5
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
277 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication ...............................................2 .....n.................6.5 Venture capital availability......................................................25 .....n.................3.0 Ease of access to credit........................................................55 .....n .................1.8 Financing through local equity market ..................................22 .....n.................4.1 Ease of access to loans ........................................................42 .....n.................2.7 Foreign direct investment to GDP.........................................24 .....n.................4.4 Retail access Market penetration of bank accounts .....................................4 .....n......292,325.4 Commercial bank branches ...................................................20 .....n...............20.7 Total number of ATMs.............................................................6 .....n .............122.8 Total number of point of sale (POS) devices...........................9 .....n..........2,330.7 Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
United States Key indicators
Financial assets by major type, 2008 10.6%
Population (millions), 2009 .....................................................307.4
US$ bn
23.0%
GDP (US$ billions), 2009 ....................................................14,256.3
n n n n
GDP (current prices) per capita, 2009 ............................46,380.9 GDP (PPP) as share (%) of world total, 2009 ......................20.46 Compound annual growth rate of real GDP (%), 2005–09 ..0.55
Public debt securities ....5,421.3 Private debt securities.22,294.9 Banking deposits ..........11,613.9 Equity securities ...........11,737.6
43.7%
22.7%
Total
51,067.6
Total/GDP 353.6%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index........................................................1 5.1 1
2
3
4
5
6
7
Factors, policies, and institutions
278
1st pillar: Institutional environment .........................................14
5.6
Financial sector liberalization ....................................................13 Corporate governance.................................................................17 Legal and regulatory issues .......................................................16 Contract enforcement....................................................................9
7.0 5.1 4.7 5.6
2nd pillar: Business environment .............................................17
5.4
Human capital .................................................................................6 Taxes...............................................................................................44 Infrastructure ................................................................................15 Cost of doing business ..................................................................4
5.5 4.0 5.4 6.5
3rd pillar: Financial stability......................................................39
4.3
Currency stability..........................................................................41 Banking system stability..............................................................52 Risk of sovereign debt crisis ........................................................4
3.3 3.4 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......................................27
4.0
Size index .......................................................................................19 Efficiency index.............................................................................38 Financial information disclosure..................................................3
3.4 4.6 4.0
5th pillar: Non-banking financial services ...............................1
6.1
IPO activity.......................................................................................3 M&A activity....................................................................................2 Insurance .........................................................................................1 Securitization...................................................................................1
5.4 6.4 5.4 7.0
6th pillar: Financial markets........................................................1
5.8
Foreign exchange markets ...........................................................1 Derivatives markets .......................................................................1 Equity market development ..........................................................8 Bond market development............................................................3
7.0 7.0 5.0 5.1 1
Financial access 7th pillar: Financial access..........................................................5
4.7
Commercial access......................................................................24 Retail access...................................................................................3
3.7 5.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization ...................................................1 .....n.................2.2 Commitments to WTO agreement on trade in services .......15 .....n ...............51.5 Domestic financial sector liberalization ...................................1 .....n .................1.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ................................4 .....n.................5.1 Efficacy of corporate boards..................................................19 .....n.................5.0 Reliance on professional management .................................13 .....n.................5.6 Willingness to delegate...........................................................8 .....n.................5.1 Strength of auditing and reporting standards .......................31 .....n.................5.0 Ethical behavior of firms........................................................22 .....n.................5.2 Protection of minority shareholders’ interests ......................23 .....n.................4.8
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................18 .....n.................3.5 Centralization of economic policymaking ..............................11 .....n.................4.2 Regulation of securities exchanges.......................................35 .....n.................4.3 Property rights.......................................................................24 .....n.................5.1 Intellectual property protection .............................................20 .....n.................5.1 Diversion of public funds.......................................................22 .....n.................4.7 Public trust of politicians .......................................................28 .....n.................3.3 Corruption perceptions index ................................................16 .....n .................7.5 Strength of legal rights index ................................................12 .....n.................8.0 Central bank transparency.....................................................15 .....n ...............10.0
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................25 .....n.................4.0 Judicial independence ...........................................................21 .....n.................5.0 Irregular payments in judicial decisions.................................27 .....n.................5.0 Time to enforce a contract ......................................................7 .....n.............300.0 Number of procedures to enforce a contract .......................22 .....n...............32.0 Strength of investor protection index......................................4 .....n.................8.3 Cost of enforcing contracts.....................................................9 .....n ...............14.4
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools .............................................9 .....n.................5.5 Quality of math and science education.................................30 .....n.................4.4 Extent of staff training.............................................................9 .....n.................5.1 Local availability of specialized research and training services..............................................................10 .....n.................5.8 Brain drain and ease of hiring foreign labor ............................4 .....n.................5.1 Tertiary enrollment ..................................................................3 .....n ...............81.7
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................29 .....n.................5.1 Distortive effect of taxes and subsidies on competition.......46 .....n.................3.8 Marginal tax variation ............................................................43 .....n...............25.4 Time to pay taxes..................................................................21 .....n..............187.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................17 .....n.................5.8 Quality of telephone infrastructure .......................................26 .....n.................6.4 Internet users .......................................................................12 .....n ...............74.0 Broadband Internet subscribers ............................................17 .....n...............23.5 Telephone lines........................................................................9 .....n...............49.6 Mobile telephone subscribers...............................................44 .....n...............80.4
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business .....................................................6 .....n.................0.7
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
United States
279
2: Country/Economy Profiles
United States Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ....................................................6 .....n.................0.5 Cost of closing a business ....................................................15 .....n .................7.0 Time to start a business..........................................................7 .....n.................6.0 Time to register property.......................................................11 .....n ...............12.0 Time to close a business.......................................................16 .....n .................1.5
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .....................42 .....n ...............–0.7 External vulnerability indicator..............................................n/a .........................n/a Current account balance to GDP...........................................45 .....n ...............–4.3 Dollarization vulnerability indicator ..........................................1 .....n.................0.0 External debt to GDP (developing economies) ....................n/a .........................n/a Net international investment position to GDP (advanced economies)...........................................................12 .....n .............–19.3
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................52 .....n.................3.0 Financial strengths indicator....................................................6 .....n .................7.0 Aggregate measure of real estate bubbles...........................40 .....n.................3.7 Financial Stress Index ...........................................................38 .....n ...............14.8 Tier 1 capital ratio..................................................................29 .....n.................9.3 Output loss during banking crises.........................................38 .....n...............50.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating...............................................1 .....n...............20.0 Foreign currency sovereign rating ...........................................1 .....n...............20.0 Aggregate macroprudential indicator.....................................12 .....n.................5.7 Manageability of public debt ................................................36 .....n...............52.9 Credit default swap spreads ...................................................3 .....n ...............37.9
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
280
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............69.1 Central bank assets to GDP ..................................................11 .....n.................5.3 Financial system deposits to GDP ........................................20 .....n ...............77.9 M2 to GDP ............................................................................36 .....n...............60.0 Private credit to GDP...............................................................1 .....n .............210.7 Bank deposits to GDP ...........................................................22 .....n...............78.3 Money market instruments to GDP ......................................18 .....n.................0.4
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................46 .....n.................3.2 Bank overhead costs .............................................................39 .....n.................3.5 Public ownership of banks ....................................................37 .....n ...............13.2 Bank operating costs to assets .............................................35 .....n.................2.4 Non-performing bank loans to total loans .............................27 .....n.................5.4
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage................................................1 .....n .............100.0 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ....................................................................2 .....n ...............21.2 IPO proceeds amount ...........................................................29 .....n.................0.2 Share of world IPOs ................................................................2 .....n................11.4
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n...............36.0 M&A transaction value to GDP..............................................11 .....n.................8.7 Share of total number of M&A deals ......................................1 .....n...............23.0
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density............................................................17 .....n.................3.5 Non–life insurance density .....................................................2 .....n.................4.5 Real growth of direct insurance premiums ...........................40 .....n.................0.0 Life insurance coverage ..........................................................3 .....n ...............10.6 Non–life insurance coverage ...................................................2 .....n ...............14.0 Relative value-added of insurance to GDP ..............................5 .....n.................3.0
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ..............................................................1 .....n ...............10.8 Share of total number of securitization deals .........................1 .....n ...............61.7
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
United States
6th pillar: Financial markets 6.01 6.02 6.03
Foreign exchange markets Spot foreign exchange turnover ..............................................2 .....n...............24.4 Outright forward foreign exchange turnover ...........................2 .....n...............26.7 Foreign exchange swap turnover ............................................2 .....n ...............10.8
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 .............................................................................2 .....n...............26.9 Interest rate derivatives turnover: Swaps................................2 .....n...............20.5 Interest rate derivatives turnover: Options..............................1 .....n...............42.4 Foreign exchange derivatives turnover: Currency swaps ........2 .....n................17.0 Foreign exchange derivatives turnover: Options .....................2 .....n...............30.0
United United United United United
6.09 6.10 6.11 6.12
Equity market development Stock market turnover ratio .....................................................2 .....n .............271.8 Stock market capitalization to GDP .......................................12 .....n..............147.8 Stock market value traded to GDP..........................................2 .....n.............383.5 Number of listed companies per 10,000 people ...................19 .....n.................0.2
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ..............2 .....n .............114.6 Public domestic bond market capitalization to GDP ...............4 .....n ...............61.7 Private international bonds to GDP .......................................14 .....n...............45.3 Public international bonds to GDP ........................................50 .....n.................0.1 Local currency corporate bond issuance to GDP ....................2 .....n.................3.5
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
281 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................14 .....n.................6.0 Venture capital availability......................................................10 .....n.................3.8 Ease of access to credit........................................................37 .....n.................2.7 Financing through local equity market ..................................25 .....n.................4.1 Ease of access to loans ........................................................21 .....n.................3.4 Foreign direct investment to GDP.........................................43 .....n.................2.2 Retail access Market penetration of bank accounts....................................10 .....n......202,189.2 Commercial bank branches .....................................................7 .....n...............36.3 Total number of ATMs.............................................................2 .....n .............175.7 Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate ....................................................................n/a .........................n/a
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Venezuela Key indicators
Financial assets by major type, 2008
Population (millions), 2009 .......................................................28.6
US$ bn
GDP (US$ billions), 2009 .........................................................337.3
30.8%
GDP (current prices) per capita, 2009 ............................11,789.0 GDP (PPP) as share (%) of world total, 2009 ........................0.50
54.8%
Compound annual growth rate of real GDP (%), 2005–09 ..3.79
n n n n
Public debt securities .........45.3 Private debt securities........21.2 Banking deposits .................80.6 Equity securities....................n/a Total
14.4%
147.1
Total/GDP 46.0%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................56 2.6 1
2
3
4
5
6
7
Factors, policies, and institutions
282
1st pillar: Institutional environment .........................................57
2.3
Financial sector liberalization ....................................................56 Corporate governance.................................................................55 Legal and regulatory issues .......................................................57 Contract enforcement..................................................................56
1.1 3.5 2.0 2.8
2nd pillar: Business environment .............................................55
3.1
Human capital ...............................................................................41 Taxes...............................................................................................56 Infrastructure ................................................................................51 Cost of doing business ................................................................53
3.9 2.3 2.9 3.2
3rd pillar: Financial stability......................................................40
4.2
Currency stability............................................................................3 Banking system stability..............................................................30 Risk of sovereign debt crisis ......................................................55
5.9 4.4 2.3 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......................................54
2.4
Size index .......................................................................................51 Efficiency index.............................................................................42 Financial information disclosure................................................56
1.2 4.4 1.0
5th pillar: Non-banking financial services .............................45
1.7
IPO activity...................................................................................n/a M&A activity..................................................................................54 Insurance .......................................................................................38 Securitization.................................................................................40
n/a 1.0 2.4 1.7
6th pillar: Financial markets......................................................31
2.1
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development.......................................................n/a Bond market development..........................................................29
n/a n/a n/a 2.1 1
Financial access 7th pillar: Financial access........................................................57
2.0
Commercial access......................................................................57 Retail access.................................................................................44
2.3 1.7 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................49 .....n ...............–0.8 Commitments to WTO agreement on trade in services.......48 .....n ...............19.9 Domestic financial sector liberalization .................................55 .....n.................3.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................55 .....n.................3.2 Efficacy of corporate boards .................................................57 .....n.................3.8 Reliance on professional management .................................49 .....n.................3.9 Willingness to delegate.........................................................53 .....n.................3.1 Strength of auditing and reporting standards .......................50 .....n.................4.0 Ethical behavior of firms........................................................55 .....n.................3.1 Protection of minority shareholders’ interests ......................55 .....n.................3.3
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................56 .....n.................2.1 Centralization of economic policymaking ..............................57 .....n .................1.4 Regulation of securities exchanges.......................................48 .....n.................3.7 Property rights.......................................................................57 .....n .................1.8 Intellectual property protection .............................................57 .....n .................1.9 Diversion of public funds.......................................................57 .....n .................1.9 Public trust of politicians .......................................................57 .....n .................1.5 Corruption perceptions index ................................................57 .....n .................1.9 Strength of legal rights index ................................................57 .....n.................2.0 Central bank transparency....................................................n/a .........................n/a
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................57 .....n .................1.6 Judicial independence ...........................................................57 .....n .................1.7 Irregular payments in judicial decisions.................................56 .....n.................2.2 Time to enforce a contract ....................................................29 .....n .............510.0 Number of procedures to enforce a contract .........................9 .....n...............29.0 Strength of investor protection index....................................57 .....n.................2.3 Cost of enforcing contracts...................................................53 .....n...............43.7
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................34 .....n.................4.4 Quality of math and science education.................................49 .....n.................2.9 Extent of staff training...........................................................48 .....n.................3.7 Local availability of specialized research and training services .............................................................56 .....n.................3.0 Brain drain and ease of hiring foreign labor ..........................57 .....n.................2.5 Tertiary enrollment ..................................................................6 .....n...............78.1
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................50 .....n.................3.6 Distortive effect of taxes and subsidies on competition.......56 .....n.................2.3 Marginal tax variation ...........................................................n/a .........................n/a Time to pay taxes..................................................................54 .....n.............864.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................53 .....n.................3.1 Quality of telephone infrastructure .......................................57 .....n.................4.3 Internet users .......................................................................42 .....n...............25.5 Broadband Internet subscribers ............................................39 .....n.................4.7 Telephone lines......................................................................34 .....n...............22.4 Mobile telephone subscribers...............................................48 .....n...............72.2
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................50 .....n...............24.0
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Venezuela
283
2: Country/Economy Profiles
Venezuela Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................19 .....n.................2.2 Cost of closing a business ....................................................55 .....n...............38.0 Time to start a business........................................................57 .....n .............141.0 Time to register property ......................................................40 .....n ...............47.0 Time to close a business ......................................................43 .....n.................4.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) .......................1 .....n ...............14.5 External vulnerability indicator...............................................27 .....n .............106.6 Current account balance to GDP ...........................................10 .....n .................7.9 Dollarization vulnerability indicator ........................................24 .....n.................0.6 External debt to GDP (developing economies) .......................8 .....n...............22.7 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................20 .....n .................1.3 Financial strengths indicator..................................................53 .....n .................1.0 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises.........................................23 .....n .................1.5
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................51 .....n.................8.0 Foreign currency sovereign rating .........................................50 .....n.................8.0 Aggregate macroprudential indicator ....................................56 .....n.................2.4 Manageability of public debt ..................................................7 .....n................17.4 Credit default swap spreads .................................................52 .....n ...........1402.7
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
284
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n...............29.6 Central bank assets to GDP ..................................................34 .....n.................0.4 Financial system deposits to GDP ........................................47 .....n...............30.1 M2 to GDP ............................................................................55 .....n ...............31.7 Private credit to GDP.............................................................48 .....n...............26.6 Bank deposits to GDP ...........................................................49 .....n...............30.7 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator ............................................18 .....n.................4.7 Bank overhead costs .............................................................48 .....n.................4.8 Public ownership of banks ....................................................34 .....n ...............10.8 Bank operating costs to assets .............................................53 .....n.................5.7 Non-performing bank loans to total loans .............................13 .....n.................2.6
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................49 .....n.................0.0 Public credit registry coverage ..............................................24 .....n.................0.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share .................................................................n/a .........................n/a IPO proceeds amount ..........................................................n/a .........................n/a Share of world IPOs .............................................................n/a .........................n/a
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.1 M&A transaction value to GDP .............................................54 .....n.................0.9 Share of total number of M&A deals ....................................50 .....n.................0.1
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................51 .....n.................0.1 Non–life insurance density .....................................................8 .....n.................4.0 Real growth of direct insurance premiums ..........................n/a .........................n/a Life insurance coverage ........................................................49 .....n.................0.0 Non–life insurance coverage..................................................17 .....n .................1.1 Relative value-added of insurance to GDP ............................56 .....n.................0.2
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................32 .....n .................1.2 Share of total number of securitization deals .......................51 .....n.................0.0
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Venezuela
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 ..................................................n/a .........................n/a Stock market capitalization to GDP ......................................n/a .........................n/a Stock market value traded to GDP .......................................n/a .........................n/a Number of listed companies per 10,000 people...................43 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
Bond market development Private domestic bond market capitalization to GDP ............35 .....n .................1.5 Public domestic bond market capitalization to GDP .............23 .....n...............30.6 Private international bonds to GDP .......................................37 .....n.................3.8 Public international bonds to GDP.........................................12 .....n.................8.3 Local currency corporate bond issuance to GDP .................n/a .........................n/a
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
285 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................54 .....n.................3.5 Venture capital availability......................................................54 .....n.................2.0 Ease of access to credit........................................................39 .....n.................2.7 Financing through local equity market ..................................57 .....n.................2.1 Ease of access to loans ........................................................51 .....n.................2.1 Foreign direct investment to GDP.........................................51 .....n.................0.5 Retail access Market penetration of bank accounts ...................................19 .....n ......124,638.9 Commercial bank branches ...................................................51 .....n.................0.0 Total number of ATMs...........................................................39 .....n...............28.2 Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .....................................................................23 .....n.................0.6
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
2: Country/Economy Profiles
Vietnam Key indicators
Financial assets by major type, 2008 9.6%
Population (millions), 2009 .......................................................87.2
US$ bn
GDP (US$ billions), 2009 ...........................................................92.4 43.7%
GDP (current prices) per capita, 2009 ..............................1,059.9 GDP (PPP) as share (%) of world total, 2009 ........................0.37 Compound annual growth rate of real GDP (%), 2005–09 ..5.59 59.3%
n n n n
Public debt securities .........43.7 Private debt securities..........0.4 Banking deposits .................59.3 Equity securities ....................9.6 Total
0.4%
112.9
Total/GDP 125.7%
Financial Development Index 2010 Rank (out of 57)
Score (1–7 scale)
2010 Index......................................................46 3.0 1
2
3
4
5
6
7
Factors, policies, and institutions
286
1st pillar: Institutional environment .........................................45
3.6
Financial sector liberalization ....................................................47 Corporate governance.................................................................43 Legal and regulatory issues .......................................................36 Contract enforcement..................................................................38
2.8 4.1 3.5 4.0
2nd pillar: Business environment .............................................51
3.5
Human capital ...............................................................................53 Taxes...............................................................................................55 Infrastructure ................................................................................36 Cost of doing business ................................................................49
3.4 2.9 3.6 4.0
3rd pillar: Financial stability......................................................48
3.9
Currency stability..........................................................................38 Banking system stability..............................................................31 Risk of sovereign debt crisis ......................................................47
3.4 4.4 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......................................35
3.5
Size index .......................................................................................24 Efficiency index.............................................................................35 Financial information disclosure................................................38
3.1 4.7 1.9
5th pillar: Non-banking financial services .............................47
1.7
IPO activity.....................................................................................33 M&A activity..................................................................................48 Insurance .......................................................................................50 Securitization.................................................................................37
1.7 1.3 1.7 1.9
6th pillar: Financial markets......................................................50
1.4
Foreign exchange markets........................................................n/a Derivatives markets....................................................................n/a Equity market development ........................................................48 Bond market development..........................................................44
n/a n/a 1.5 1.4 1
Financial access 7th pillar: Financial access........................................................18
3.7
Commercial access......................................................................22 Retail access ...............................................................................n/a
3.7 n/a 1
OUTPUTS
Note: For further details and explanation, please refer to “How Read the Country/Economy Profiles.”
Financial Development Index in detail INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
1st pillar: Institutional environment 1.01 1.02 1.03
Financial sector liberalization Capital account liberalization .................................................45 .....n.................0.0 Commitments to WTO agreement on trade in services.......35 .....n...............52.3 Domestic financial sector liberalization .................................51 .....n.................2.0
Multiple (26) ..........................2.5 Turkey ..................................83.5 Multiple (35)...........................1.0
1.04 1.05 1.06 1.07 1.08 1.09 1.10
Corporate governance Extent of incentive-based compensation ..............................32 .....n.................4.2 Efficacy of corporate boards .................................................36 .....n.................4.5 Reliance on professional management .................................41 .....n.................4.2 Willingness to delegate.........................................................39 .....n.................3.6 Strength of auditing and reporting standards .......................53 .....n.................3.8 Ethical behavior of firms........................................................35 .....n.................3.9 Protection of minority shareholders’ interests ......................37 .....n.................4.3
Canada...................................5.2 Sweden .................................5.9 Sweden .................................6.5 Sweden .................................6.5 South Africa...........................6.4 Sweden .................................6.8 Sweden .................................6.0
1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20
Legal and regulatory issues Burden of government regulation .........................................46 .....n.................2.6 Centralization of economic policymaking ..............................24 .....n.................3.4 Regulation of securities exchanges.......................................44 .....n.................3.9 Property rights.......................................................................42 .....n.................4.1 Intellectual property protection .............................................50 .....n.................2.7 Diversion of public funds.......................................................34 .....n.................3.3 Public trust of politicians .......................................................18 .....n.................3.9 Corruption perceptions index ................................................49 .....n.................2.7 Strength of legal rights index ................................................12 .....n.................8.0 Central bank transparency....................................................n/a .........................n/a
Singapore ..............................5.5 Switzerland ............................5.6 South Africa...........................6.0 Switzerland ............................6.4 Sweden .................................6.2 Sweden .................................6.5 Singapore ..............................6.4 Denmark................................9.3 Multiple (3)...........................10.0 Sweden ...............................15.0
1.21 1.22 1.23 1.24 1.25 1.26 1.27
Contract enforcement Effectiveness of law-making bodies ......................................23 .....n.................4.1 Judicial independence ...........................................................36 .....n.................3.9 Irregular payments in judicial decisions.................................45 .....n.................3.2 Time to enforce a contract ......................................................6 .....n.............295.0 Number of procedures to enforce a contract .......................26 .....n...............34.0 Strength of investor protection index....................................56 .....n.................2.7 Cost of enforcing contracts...................................................39 .....n...............28.5
Singapore ..............................6.5 Sweden .................................6.6 Sweden .................................6.8 Singapore...........................150.0 Ireland..................................20.0 Singapore ..............................9.3 Norway ..................................9.9
2nd pillar: Business environment
2.05 2.06
Human capital Quality of management schools ...........................................53 .....n.................3.5 Quality of math and science education.................................29 .....n.................4.4 Extent of staff training...........................................................34 .....n.................4.1 Local availability of specialized research and training services .............................................................55 .....n.................3.4 Brain drain and ease of hiring foreign labor ..........................38 .....n.................3.8 Tertiary enrollment ................................................................55 .....n.................9.5
Switzerland ............................6.5 Switzerland ............................5.7 Korea, Rep...........................94.7
2.07 2.08 2.09 2.10
Taxes Irregular payments in tax collection ......................................53 .....n.................3.1 Distortive effect of taxes and subsidies on competition.......39 .....n.................4.0 Marginal tax variation ............................................................26 .....n.................5.8 Time to pay taxes..................................................................56 .....n ...........1050.0
Sweden .................................6.8 Singapore ..............................5.8 China..................................–24.6 United Arab Emirates ..........12.0
2.11 2.12 2.13 2.14 2.15 2.16
Infrastructure Quality of overall infrastructure .............................................54 .....n.................3.0 Quality of telephone infrastructure .......................................43 .....n.................6.0 Internet users .......................................................................44 .....n...............23.9 Broadband Internet subscribers ............................................45 .....n.................2.4 Telephone lines......................................................................22 .....n...............34.0 Mobile telephone subscribers...............................................24 .....n .............114.5
Switzerland ............................6.8 Norway...................................7.0 Sweden ................................87.8 Sweden................................41.2 Switzerland ..........................64.1 Turkey ................................208.7
2.17
Cost of doing business Cost of starting a business ...................................................42 .....n ...............13.3
Denmark................................0.0
2.01 2.02 2.03 2.04
Switzerland ............................6.1 Singapore ..............................6.5 Sweden .................................5.7
(Cont’d.)
2: Country/Economy Profiles
Vietnam
287
2: Country/Economy Profiles
Vietnam Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
SCORE
BEST PERFORMER
SCORE
2nd pillar: Business environment (cont’d.) 2.18 2.19 2.20 2.21 2.22
Cost of registering property ..................................................12 .....n .................1.1 Cost of closing a business ....................................................31 .....n ...............15.0 Time to start a business........................................................53 .....n...............50.0 Time to register property ......................................................46 .....n ...............57.0 Time to close a business ......................................................52 .....n.................5.0
Saudi Arabia...........................0.0 Multiple (4).............................1.0 Australia.................................2.0 Multiple (3) ............................2.0 Ireland....................................0.4
3rd pillar: Financial stability Currency stability Change in real effective exchange rate (REER) ....................n/a .........................n/a External vulnerability indicator...............................................17 .....n ...............47.4 Current account balance to GDP...........................................55 .....n ...............–9.8 Dollarization vulnerability indicator ........................................42 .....n .............104.5 External debt to GDP (developing economies) .....................18 .....n...............36.5 Net international investment position to GDP (advanced economies)..........................................................n/a .........................n/a
Hong Kong SAR ................353.1
3.07 3.08 3.09 3.10 3.11 3.12
Banking system stability Frequency of banking crises..................................................27 .....n .................1.5 Financial strengths indicator..................................................48 .....n.................2.0 Aggregate measure of real estate bubbles ..........................n/a .........................n/a Financial Stress Index...........................................................n/a .........................n/a Tier 1 capital ratio .................................................................n/a .........................n/a Output loss during banking crises...........................................1 .....n.................0.0
Multiple (10)...........................0.0 Multiple (4) ............................9.0 Ireland....................................6.8 Thailand ...............................–0.2 Jordan..................................16.8 Multiple (21) ..........................0.0
3.13 3.14 3.15 3.16 3.17
Risk of sovereign debt crisis Local currency sovereign rating.............................................47 .....n ...............10.0 Foreign currency sovereign rating .........................................49 .....n.................8.7 Aggregate macroprudential indicator ....................................41 .....n.................4.6 Manageability of public debt ................................................35 .....n...............52.2 Credit default swap spreads .................................................44 .....n.............252.8
Multiple (14) ........................20.0 Multiple (13) ........................20.0 Panama..................................6.0 Chile ......................................6.1 Norway ................................25.9
3.01 3.02 3.03 3.04 3.05 3.06
288
Venezuela ............................14.5 Saudi Arabia ...........................7.0 Kuwait ..................................37.1 Multiple (23) ..........................0.0 China .....................................9.4
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 .....n .............102.5 Central bank assets to GDP ..................................................26 .....n .................1.2 Financial system deposits to GDP ........................................22 .....n...............73.5 M2 to GDP ............................................................................12 .....n .............122.7 Private credit to GDP.............................................................23 .....n...............90.6 Bank deposits to GDP ...........................................................24 .....n...............73.7 Money market instruments to GDP ......................................26 .....n.................0.0
Denmark ............................219.5 Egypt ...................................23.8 Hong Kong SAR ................285.2 Hong Kong SAR ................329.5 United States.....................210.7 Hong Kong SAR ................289.1 Ireland..................................43.6
4.08 4.09 4.10 4.11 4.12
Efficiency index Aggregate profitability indicator.............................................11 .....n.................5.0 Bank overhead costs ...............................................................2 .....n.................0.8 Public ownership of banks ....................................................57 .....n...............69.1 Bank operating costs to assets .............................................30 .....n.................2.0 Non-performing bank loans to total loans ............................n/a .........................n/a
Netherlands ...........................6.5 Singapore ..............................0.5 Austria ...................................0.0 Ireland....................................0.6 Australia .................................1.1
4.13 4.14
Financial information disclosure Private credit bureau coverage..............................................49 .....n.................0.0 Public credit registry coverage ..............................................11 .....n ...............19.0
Argentina ...........................100.0 China ...................................62.1
5th pillar: Non-banking financial services 5.01 5.02 5.03
IPO activity IPO market share ..................................................................43 .....n.................0.2 IPO proceeds amount ...........................................................21 .....n.................0.3 Share of world IPOs ..............................................................40 .....n.................0.2
China ...................................22.0 Kazakhstan.............................1.1 China....................................12.6
Financial Development Index in detail (cont’d.) INDICATOR
n Development Advantage n Development Disadvantage RANK/57
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 .....n.................0.0 M&A transaction value to GDP .............................................47 .....n .................1.9 Share of total number of M&A deals ....................................35 .....n.................0.3
United States ......................36.0 Netherlands .........................14.2 United States ......................23.0
5.07 5.08 5.09 5.10 5.11 5.12
Insurance Life insurance density ...........................................................40 .....n.................0.7 Non–life insurance density ...................................................47 .....n.................0.8 Real growth of direct insurance premiums ...........................33 .....n.................0.0 Life insurance coverage ........................................................25 .....n.................0.6 Non–life insurance coverage .................................................23 .....n.................0.7 Relative value-added of insurance to GDP ............................47 .....n.................0.6
Ireland..................................15.6 Netherlands ...........................9.4 China .....................................0.3 India.....................................55.4 China....................................14.6 Bahrain ..................................5.9
5.13 5.14
Securitization Securitization to GDP ............................................................30 .....n .................1.2 Share of total number of securitization deals .......................33 .....n.................0.2
United States.......................10.8 United States .......................61.7
2: Country/Economy Profiles
Vietnam
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 ...................................................27 .....n...............64.4 Stock market capitalization to GDP .......................................49 .....n...............20.1 Stock market value traded to GDP........................................35 .....n................17.7 Number of listed companies per 10,000 people...................47 .....n.................0.0
Italy....................................348.2 Hong Kong SAR ................603.5 Switzerland ........................541.2 Hong Kong SAR .....................1.3
6.13 6.14 6.15 6.16 6.17
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 .......................................53 .....n.................0.3 Public international bonds to GDP ........................................34 .....n .................1.8 Local currency corporate bond issuance to GDP ..................28 .....n.................0.5
Denmark ............................175.7 Japan .................................184.6 Ireland................................215.3 Panama................................34.1 Thailand .................................3.7
6.04
289 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
7.07 7.08 7.09 7.10 7.11
Commercial access Financial market sophistication .............................................51 .....n.................3.8 Venture capital availability......................................................37 .....n.................2.7 Ease of access to credit..........................................................8 .....n.................4.0 Financing through local equity market ..................................24 .....n.................4.1 Ease of access to loans ........................................................41 .....n.................2.7 Foreign direct investment to GDP .........................................12 .....n.................8.7 Retail access Market penetration of bank accounts ..................................n/a .........................n/a Commercial bank branches ...................................................47 .....n.................3.2 Total number of ATMs ..........................................................n/a .........................n/a Total number of point of sale (POS) devices ........................n/a .........................n/a Microfinance institution (MFI) borrowers’ penetration rate .......................................................................2 .....n...............29.0
Switzerland ............................6.6 Hong Kong SAR ....................4.4 Indonesia ...............................4.3 Hong Kong SAR ....................5.2 Bahrain ..................................4.9 Hong Kong SAR ..................29.9
Japan............................717,241.6 Ireland ..................................57.3 Canada...............................218.5 Austria .............................4,174.1 Bangladesh ..........................41.2
Part 3 Data Tables
How to Read the Data Tables
How to Read the Data Tables
The following pages provide detailed data for all 57 economies included in The Financial Development Report 2010. 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
Executive Opinion Survey indicators
|
1.06
Efficacy of corporate boards
Reliance on professional management
How would you characterize corporate governance by investors and boards of directors in your country? [1 = management has little accountability to investors and boards; 7 = investors and boards exert strong supervision of management decisions] | 2009–10 weighted average
In your country, who holds senior management positions? [1 = usually relatives or friends without regard to merit; 7 = mostly professional managers chosen for merit and qualifications] | 2009–10 weighted average
RANK COUNTRY/ECONOMY RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.73
SCORE
1
MEAN: 4.83
7
1 Sweden ..............................6.46 1 Sweden ..............................5.93 2 South Africa........................5.85 3 Canada................................5.70 4 Singapore ...........................5.57 5 Norway ...............................5.55 6 Australia..............................5.54 7 Finland ................................5.52 8 Netherlands ........................5.26 9 Denmark.............................5.23 10 Switzerland.........................5.21 11 Germany.............................5.19 12 United Kingdom..................5.19 13 Malaysia .............................5.17 14 Chile ...................................5.11 15 Japan ..................................5.09 16 Bahrain ...............................5.00 17 Saudi Arabia........................5.00 18 Belgium ..............................4.99 19 United States......................4.99 20 Austria ................................4.97 21 France.................................4.96 22 Slovak Republic ..................4.89 23 Czech Republic...................4.81 24 Hong Kong SAR .................4.80 25 United Arab Emirates .........4.80 26 Indonesia ............................4.73 27 Peru ....................................4.72 28 Philippines ..........................4.68 29 Colombia ............................4.65 30 Israel...................................4.64 31 Panama...............................4.63 32 Morocco .............................4.62 33 Brazil...................................4.55 34 Hungary ..............................4.51 35 Poland.................................4.49 36 Vietnam ..............................4.49 37 India....................................4.47 38 Thailand ..............................4.45 39 Jordan.................................4.42 40 Egypt ..................................4.42 41 Ireland.................................4.41 42 China ..................................4.40 43 Kazakhstan .........................4.40 44 Romania .............................4.36 45 Ukraine ...............................4.34 46 Spain...................................4.31 47 Korea, Rep..........................4.22 48 Argentina ............................4.16 49 Turkey .................................4.15 50 Nigeria ................................4.13 51 Mexico................................4.10 52 Russian Federation.............4.09 53 Kuwait ................................4.09 54 Pakistan ..............................4.06 55 Bangladesh.........................3.99 56 Italy.....................................3.91
2 Norway ...............................6.25 3 Finland ................................6.11 4 Canada................................6.10 5 Netherlands ........................6.01 6 United Kingdom..................5.99 7 Australia..............................5.96 8 Singapore ...........................5.92 9 Switzerland.........................5.91 10 Denmark.............................5.85 11 Ireland.................................5.76 12 Germany.............................5.71 13 United States......................5.58 14 Japan ..................................5.56 15 Belgium ..............................5.53 16 South Africa........................5.49 17 Austria ................................5.32 18 Israel...................................5.26 19 Malaysia .............................5.25 20 Chile ...................................5.14 21 France.................................5.07 22 Czech Republic...................5.01 23 United Arab Emirates .........4.98 24 Hong Kong SAR .................4.95 25 Slovak Republic ..................4.94 26 Saudi Arabia........................4.90
7
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 country 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 1.11 on the burden of government regulation, Nigeria’s score is 3.06466 and the Ireland’s score is 3.06167. These countries rank 30 and 31 respectively, although they are listed with the same rounded score of 3.06.
27 Korea, Rep..........................4.89 28 Philippines ..........................4.72 29 India....................................4.71 30 China ..................................4.71 31 Brazil...................................4.66 32 Poland.................................4.64 33 Spain...................................4.56 34 Indonesia ............................4.54 35 Thailand ..............................4.47 36 Peru ....................................4.45 37 Argentina ............................4.45 38 Romania .............................4.42 39 Hungary ..............................4.30 40 Nigeria ................................4.26 41 Vietnam ..............................4.25 42 Bahrain ...............................4.18 43 Colombia ............................4.18 44 Panama...............................4.11 45 Turkey .................................4.09 46 Egypt ..................................4.05 47 Pakistan ..............................4.05 48 Bangladesh.........................3.93 49 Venezuela ...........................3.90 50 Jordan.................................3.87 51 Russian Federation.............3.86 52 Mexico................................3.82 53 Kuwait ................................3.76 54 Morocco .............................3.67 55 Kazakhstan .........................3.54 56 Italy.....................................3.52 57 Ukraine ...............................3.48
57 Venezuela ...........................3.76 SOURCE: World Economic Forum, Executive Opinion Survey SOURCE: World Economic Forum, Executive Opinion Survey
• Executive Opinion Survey indicators: These data are the results drawn from the World Economic Forum’s Executive Opinion Survey. • Other indicators: These data are indicators obtained from a variety of sources.
The seven sections correspond to the seven pillars of the Financial Development Index.
1.05
Two types of data are presented in the tables:
A dotted line on the graph indicates the mean score across the 57 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 Centre for Global Competitiveness and Performance at the World Economic Forum.
293
How to Read the Data Tables
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 (most liberalized) scale | 2008
RANK COUNTRY/ECONOMY
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 or most recent year available
SCORE RANK COUNTRY/ECONOMY
SCORE
1 Austria...................................7.00 1 Bahrain ..................................7.00 1 Belgium.................................7.00 1 Canada ..................................7.00 1 Denmark ...............................7.00 1 Finland...................................7.00 1 France ...................................7.00 1 Germany ...............................7.00 1 Hong Kong SAR ....................7.00 1 Hungary.................................7.00 1 Ireland ...................................7.00 1 Israel .....................................7.00 1 Italy .......................................7.00 1 Japan.....................................7.00 1 Jordan ...................................7.00 1 Netherlands...........................7.00 1 Norway..................................7.00 1 Singapore ..............................7.00 1 Spain .....................................7.00 1 Sweden.................................7.00 1 Switzerland ...........................7.00 1 United Arab Emirates............7.00 1 United Kingdom ....................7.00 1 United States ........................7.00 25 Panama .................................6.84 26 Romania ................................6.82 27 Egypt.....................................6.17 28 Czech Republic .....................5.95 29 Chile ......................................5.67 30 Australia ................................5.54 31 Malaysia ................................5.47 32 Peru.......................................4.77 33 Kuwait ...................................4.56 34 Slovak Republic.....................4.15 35 Saudi Arabia ..........................3.88 36 Mexico ..................................3.49 37 Korea, Rep. ...........................3.48 38 Colombia ...............................3.47 39 Indonesia...............................3.37 40 Brazil .....................................3.22 41 Poland ...................................2.82 42 Thailand.................................2.60 43 Philippines.............................2.57 44 Turkey....................................2.45 45 Vietnam .................................2.02 46 Russian Federation ...............1.76 47 Nigeria...................................1.75 48 Argentina...............................1.01 49 Bangladesh ...........................1.00 49 China .....................................1.00 49 India ......................................1.00 49 Kazakhstan ............................1.00 49 Morocco................................1.00 49 Pakistan.................................1.00 49 South Africa ..........................1.00 49 Ukraine..................................1.00 49 Venezuela..............................1.00
1 Austria...................................7.00 1 Belgium.................................7.00 1 Canada ..................................7.00 1 Denmark ...............................7.00 1 France ...................................7.00 1 Germany ...............................7.00 1 Hungary.................................7.00 1 Ireland ...................................7.00 1 Italy .......................................7.00 1 Netherlands...........................7.00 1 Spain .....................................7.00 1 Sweden.................................7.00 1 Switzerland ...........................7.00 1 United Kingdom ....................7.00 15 United States ........................6.85 16 Japan.....................................6.66 17 Bahrain ..................................6.11 18 Singapore ..............................6.01 19 Norway..................................5.96 20 Turkey....................................5.59 21 Jordan ...................................5.05 22 China .....................................5.00 23 Panama .................................4.89 24 Malaysia ................................4.87 25 Romania1 ...............................4.86 26 Philippines.............................4.82 27 United Arab Emirates............4.77 28 Thailand.................................4.45 29 Czech Republic .....................4.29 30 Nigeria...................................4.13 31 Finland...................................4.02 32 Saudi Arabia ..........................3.97 33 Hong Kong SAR ....................3.79 34 Israel .....................................3.76 35 Vietnam .................................3.48 36 Egypt.....................................3.39 37 Australia ................................3.34 38 Slovak Republic.....................3.32 39 Poland ...................................2.93 40 Argentina...............................2.67 41 Kuwait ...................................2.66 42 Morocco1...............................2.50 43 South Africa ..........................2.48 44 Colombia ...............................2.39 45 Indonesia...............................2.09 46 Peru.......................................1.84 47 Mexico ..................................1.34 48 Venezuela..............................1.24 49 Bangladesh ...........................1.00 49 Brazil .....................................1.00 49 Chile ......................................1.00 49 India ......................................1.00 49 Pakistan.................................1.00 n/a Kazakhstan ..............................n/a n/a Korea, Rep. .............................n/a n/a Russian Federation .................n/a n/a Ukraine ....................................n/a
SOURCE: Menzie Chinn and Hiro Ito. 2010. “Financial Openness Index.”
Dataset available at http://www.ssc.wisc.edu/~mchinn/research.html. Interaction results from World Economic Forum analysis
SOURCE: The World Bank, World Trade Indicators 2008
1 2007
294
Other indicators In the following pages, indicators not derived from the Executive Opinion Survey are presented in blackcolored bar graphs. 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 that engage in professional research on the topics related to the Index. 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. When the data presented are hard data, this is indicated in the column heading with the term hard data; when the data presented are the results of an index or a survey other than the Forum’s Executive Opinion Survey, the column is headed with the term score. 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 non-Survey indicators, 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 48 for that variable in Table 2.22.
Index of Data Tables
Index of Data Tables
Section 1: Institutional environment ..............................................297 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
Capital account liberalization.........................................298 Commitments to WTO agreement on trade in services ...........................................................298 Domestic financial sector liberalization.........................299 Extent of incentive-based compensation......................299 Efficacy of corporate boards .........................................300 Reliance on professional management.........................300 Willingness to delegate.................................................301 Strength of auditing and reporting standards ...............301 Ethical behavior of firms ...............................................302 Protection of minority shareholders’ interests .............302 Burden of government regulation.................................303 Centralization of economic policymaking .....................303 Regulation of securities exchanges ..............................304 Property rights ..............................................................304 Intellectual property protection.....................................305 Diversion of public funds ..............................................305 Public trust of politicians...............................................306 Corruption perceptions index........................................306 Strength of legal rights index........................................307 Central bank transparency ............................................307 Effectiveness of law-making bodies .............................308 Judicial independence ..................................................308 Irregular payments in judicial decisions ........................309 Time to enforce a contract ...........................................309 Number of procedures to enforce a contract ...............310 Strength of investor protection index ...........................310 Cost of enforcing contracts...........................................311
Section II: Business environment...................................................313 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 ...................................314 Quality of math and science education ........................314 Extent of staff training ..................................................315 Local availability of specialized research and training services .....................................................315 Brain drain and ease of hiring foreign labor ..................316 Tertiary enrollment ........................................................316 Irregular payments in tax collection ..............................317 Distortive effect of taxes and subsidies on competition ..............................................................317 Marginal tax variation ....................................................318 Time to pay taxes .........................................................318 Quality of overall infrastructure .....................................319 Quality of telephone infrastructure ...............................319 Internet users ...............................................................320 Broadband Internet subscribers....................................320 Telephone lines .............................................................321 Mobile telephone subscribers ......................................321 Cost of starting a business ...........................................322 Cost of registering property..........................................322 Cost of closing a business............................................323 Time to start a business ...............................................323 Time to register property..............................................324 Time to close a business ..............................................324
Section III: Financial stability..........................................................325 3.01 3.02 3.03
Change in real effective exchange rate (REER) ............326 External vulnerability indicator ......................................326 Current account balance to GDP ..................................327
3.04 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17
Dollarization vulnerability indicator................................327 External debt to GDP (developing economies).............328 Net international investment position to GDP advanced economies)...........................................328 Frequency of banking crises .........................................329 Financial strengths indicator .........................................329 Aggregate measure of real estate bubbles ..................330 Financial Stress Index ...................................................330 Tier 1 capital ratio .........................................................331 Output loss during banking crises ................................331 Local currency sovereign rating ....................................332 Foreign currency sovereign rating.................................332 Aggregate macroprudential indicator ............................333 Manageability of public debt.........................................333 Credit default swap spreads .........................................334
Section IV: Banking financial services.........................................335 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.............................336 Central Bank assets to GDP .........................................336 Financial system deposits to GDP................................337 M2 to GDP....................................................................337 Private credit to GDP ....................................................338 Bank deposits to GDP...................................................338 Money market instruments to GDP..............................339 Aggregate profitability indicator ....................................339 Bank overhead costs.....................................................340 Public ownership of banks............................................340 Bank operating costs to assets ....................................341 Non-performing bank loans to total loans.....................341 Private credit bureau coverage .....................................342 Public credit registry coverage......................................342
Section V: Non-banking financial services .................................343 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 5.14
IPO market share..........................................................344 IPO proceeds amount...................................................344 Share of world IPOs......................................................345 M&A market share .......................................................345 M&A transaction value to GDP.....................................346 Share of total number of M&A deals ...........................346 Life insurance density...................................................347 Non–life insurance density............................................347 Real growth of direct insurance premiums ..................348 Life insurance coverage ................................................348 Non–life insurance coverage.........................................349 Relative value-added of insurance to GDP ...................349 Securitization to GDP....................................................350 Share of total number of securitization deals ...............350
Section VI: Financial markets..........................................................351 6.01 6.02 6.03 6.04 6.05 6.06 6.07 6.08
Spot foreign exchange turnover....................................352 Outright forward foreign exchange turnover.................352 Foreign exchange swap turnover ..................................353 Interest rate derivatives turnover: Forward rate agreements ...........................................................353 Interest rate derivatives turnover: Swaps .....................354 Interest rate derivatives turnover: Options ...................354 Foreign exchange derivatives turnover: Currency swaps ............................................................355 Foreign exchange derivatives turnover: Options...........355
295
Index of Data Tables
6.09 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17
Stock market turnover ratio...........................................356 Stock market capitalization to GDP...............................356 Stock market value traded to GDP ...............................357 Number of listed companies per 10,000 people ...............................................................357 Private domestic bond market capitalization to GDP.....................................................358 Public domestic bond market capitalization to GDP.....................................................358 Private international bonds to GDP...............................359 Public international bonds to GDP ................................359 Local currency corporate bond issuance to GDP ...........................................................360
Section VII: Financial access ..........................................................361 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11
296
Financial market sophistication.....................................362 Venture capital availability .............................................362 Ease of access to credit ...............................................363 Financing through local equity market..........................363 Ease of access to loans ................................................364 Foreign direct investment to GDP ................................364 Market penetration of bank accounts...........................365 Commercial bank branches...........................................365 Total number of ATMs ..................................................366 Total number of point of sale (POS) devices..........................................................................366 Microfinance institution (MFI) borrowersâ&#x20AC;&#x2122; penetration rate ............................................................367
Data Tables
Section I Institutional environment
3: Data Tables | Institutional environment
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 (most liberalized) scale | 2008
RANK COUNTRY/ECONOMY
SCORE RANK COUNTRY/ECONOMY
SCORE
1 Austria....................................7.00 1 Bahrain...................................7.00 1 Belgium..................................7.00 1 Canada ...................................7.00 1 Denmark ................................7.00 1 Finland ...................................7.00 1 France ....................................7.00 1 Germany ................................7.00 1 Hong Kong SAR.....................7.00 1 Hungary .................................7.00 1 Ireland ....................................7.00 1 Israel ......................................7.00 1 Italy ........................................7.00 1 Japan .....................................7.00 1 Jordan ....................................7.00 1 Netherlands ...........................7.00 1 Norway ..................................7.00 1 Singapore...............................7.00 1 Spain ......................................7.00 1 Sweden..................................7.00 1 Switzerland ............................7.00
298
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 or most recent year available
1 United Arab Emirates ............7.00 1 United Kingdom.....................7.00 1 United States.........................7.00 25 Panama .................................6.84 26 Romania ................................6.82 27 Egypt .....................................6.17 28 Czech Republic......................5.95 29 Chile ......................................5.67 30 Australia ................................5.54 31 Malaysia ................................5.47 32 Peru .......................................4.77 33 Kuwait ...................................4.56 34 Slovak Republic .....................4.15 35 Saudi Arabia ..........................3.88 36 Mexico ..................................3.49 37 Korea, Rep. ...........................3.48 38 Colombia ...............................3.47 39 Indonesia...............................3.37 40 Brazil .....................................3.22 41 Poland ...................................2.82 42 Thailand .................................2.60 43 Philippines.............................2.57 44 Turkey....................................2.45 45 Vietnam .................................2.02 46 Russian Federation ................1.76 47 Nigeria ...................................1.75 48 Argentina ...............................1.01 49 Bangladesh ............................1.00 49 China .....................................1.00 49 India.......................................1.00 49 Kazakhstan ............................1.00 49 Morocco ................................1.00 49 Pakistan .................................1.00 49 South Africa...........................1.00 49 Ukraine ..................................1.00 49 Venezuela ..............................1.00
1 Austria....................................7.00 1 Belgium..................................7.00 1 Canada ...................................7.00 1 Denmark ................................7.00 1 France ....................................7.00 1 Germany ................................7.00 1 Hungary .................................7.00 1 Ireland ....................................7.00 1 Italy ........................................7.00 1 Netherlands ...........................7.00 1 Spain ......................................7.00 1 Sweden..................................7.00 1 Switzerland ............................7.00 1 United Kingdom.....................7.00 15 United States ........................6.85 16 Japan.....................................6.66 17 Bahrain ..................................6.11 18 Singapore ..............................6.01 19 Norway..................................5.96 20 Turkey....................................5.59 21 Jordan ...................................5.05 22 China .....................................5.00 23 Panama .................................4.89 24 Malaysia ................................4.87 25 Romania1 ...............................4.86 26 Philippines.............................4.82 27 United Arab Emirates............4.77 28 Thailand .................................4.45 29 Czech Republic......................4.29 30 Nigeria ...................................4.13 31 Finland...................................4.02 32 Saudi Arabia ..........................3.97 33 Hong Kong SAR ....................3.79 34 Israel......................................3.76 35 Vietnam .................................3.48 36 Egypt.....................................3.39 37 Australia ................................3.34 38 Slovak Republic .....................3.32 39 Poland ...................................2.93 40 Argentina...............................2.67 41 Kuwait ...................................2.66 42 Morocco1...............................2.50 43 South Africa ..........................2.48 44 Colombia ...............................2.39 45 Indonesia...............................2.09 46 Peru .......................................1.84 47 Mexico...................................1.34 48 Venezuela ..............................1.24 49 Bangladesh ............................1.00 49 Brazil......................................1.00 49 Chile ......................................1.00 49 India.......................................1.00 49 Pakistan .................................1.00 n/a Kazakhstan ..............................n/a n/a Korea, Rep...............................n/a n/a Russian Federation..................n/a n/a Ukraine ....................................n/a
SOURCE: Menzie Chinn and Hiro Ito. 2010. “Financial Openness Index.”
Dataset available at http://www.ssc.wisc.edu/~mchinn/research.html. Interaction results from World Economic Forum analysis
SOURCE: The World Bank, World Trade Indicators 2008
1 2007
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 (most liberalized) scale | 2009
To what extent is management compensation in your country based on performance rather than fixed salaries? [1 = not at all—based on fixed salaries; 7 = heavily—based on performance using bonuses or equity compensation] | 2009–10 weighted average
RANK COUNTRY/ECONOMY
SCORE
1 Australia .................................7.00 1 Austria....................................7.00 1 Bahrain...................................7.00
RANK COUNTRY/ECONOMY
SCORE
1 Belgium..................................7.00
2 Singapore............................5.16
1 Canada ...................................7.00
3 Hong Kong SAR..................5.14
1 Denmark ................................7.00
4 United States .....................5.07
1 Finland ...................................7.00
5 Switzerland .........................5.05
1 France ....................................7.00
6 South Africa........................5.05
1 Germany ................................7.00
7 United Kingdom..................5.01
1 Hong Kong SAR.....................7.00
8 Australia..............................4.90
1 Ireland ....................................7.00
9 Germany .............................4.84
1 Israel ......................................7.00
10 Malaysia..............................4.67
1 Italy ........................................7.00
11 Sweden ..............................4.65
1 Japan .....................................7.00
12 Ireland.................................4.62
1 Malaysia.................................7.00
13 Slovak Republic ..................4.60
1 Netherlands ...........................7.00
14 Saudi Arabia........................4.59
1 Norway ..................................7.00
15 Chile ...................................4.58
1 Singapore...............................7.00
16 China ..................................4.55
1 Spain ......................................7.00
17 Netherlands ........................4.51
1 Sweden..................................7.00
18 France.................................4.51
1 United Kingdom.....................7.00
19 Denmark.............................4.50
1 United States.........................7.00
20 United Arab Emirates .........4.47
23 Panama .................................6.84
21 Austria ................................4.47
24 Romania ................................6.82
22 Bahrain ...............................4.45
25 Thailand .................................6.67
23 Czech Republic ...................4.42
26 South Africa ..........................6.06
24 Belgium ..............................4.39
27 Chile ......................................6.05
25 Israel...................................4.39
28 Nigeria...................................5.97
26 Indonesia ............................4.36
29 Philippines.............................5.87
27 Brazil...................................4.35
30 Brazil .....................................5.57
28 Japan ..................................4.35
31 Switzerland............................5.41
29 Finland ................................4.34
32 United Arab Emirates............5.09
30 Kuwait.................................4.26
33 Mexico ..................................5.09
31 Norway ...............................4.25
34 Colombia ...............................5.06
32 Vietnam ..............................4.23
35 Peru .......................................4.77
33 Poland.................................4.21
36 Morocco................................4.57
34 Thailand ..............................4.18
37 Argentina...............................4.48
35 Panama ...............................4.15
38 Korea, Rep. ...........................4.39
36 Hungary ..............................4.14
39 Hungary ................................4.24
37 Korea, Rep. .........................4.11
40 China .....................................3.86
38 Philippines ..........................4.08
41 Kuwait ...................................3.80
39 Argentina ............................4.06
42 Poland ...................................3.67
40 India....................................4.05
43 Egypt.....................................3.53
41 Egypt ..................................4.05
44 Czech Republic......................3.40
42 Kazakhstan .........................4.04
45 Saudi Arabia ..........................3.23
43 Spain...................................4.02
46 Turkey ....................................3.19
44 Ukraine ...............................4.01
47 Slovak Republic .....................3.15
45 Morocco .............................4.00
48 India.......................................3.14
46 Peru ....................................3.98
49 Kazakhstan ............................2.92
47 Russian Federation .............3.96
50 Pakistan.................................2.87
48 Romania .............................3.87
51 Vietnam .................................2.82
49 Italy.....................................3.83
52 Indonesia...............................2.81
50 Nigeria ................................3.72
53 Russian Federation................2.58
51 Mexico................................3.63
54 Ukraine..................................2.49
52 Colombia ............................3.60
55 Venezuela ..............................1.00
53 Pakistan ..............................3.55
n/a Bangladesh..............................n/a
54 Jordan.................................3.35
n/a Jordan .....................................n/a
1
MEAN: 4.28
1 Canada................................5.16
55 Venezuela ...........................3.20 56 Turkey .................................3.19
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: IMF. Updated as of 2009 based on World Economic Forum analysis
57 Bangladesh .........................2.86 SOURCE: World Economic Forum, Executive Opinion Survey
7
3: Data Tables | Institutional environment
1.03
299
3: Data Tables | Institutional environment
1.05
1.06
Efficacy of corporate boards
Reliance on professional management
How would you characterize corporate governance by investors and boards of directors in your country? [1 = management has little accountability to investors and boards; 7 = investors and boards exert strong supervision of management decisions] | 2009â&#x20AC;&#x201C;10 weighted average
In your country, who holds senior management positions? [1 = usually relatives or friends without regard to merit; 7 = mostly professional managers chosen for merit and qualifications] | 2009â&#x20AC;&#x201C;10 weighted average
RANK COUNTRY/ECONOMY RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.73
1
MEAN: 4.83
1 Sweden ..............................6.46 1 Sweden ..............................5.93 2 South Africa........................5.85 3 Canada................................5.70 4 Singapore ...........................5.57 5 Norway ...............................5.55 6 Australia..............................5.54 7 Finland ................................5.52 8 Netherlands ........................5.26 9 Denmark.............................5.23 10 Switzerland .........................5.21 11 Germany .............................5.19 12 United Kingdom..................5.19 13 Malaysia..............................5.17 14 Chile....................................5.11 15 Japan ..................................5.09 16 Bahrain ...............................5.00 17 Saudi Arabia........................5.00 18 Belgium ..............................4.99 19 United States .....................4.99 20 Austria ................................4.97
300
SCORE
7
21 France.................................4.96 22 Slovak Republic ..................4.89 23 Czech Republic ...................4.81 24 Hong Kong SAR..................4.80 25 United Arab Emirates .........4.80 26 Indonesia ............................4.73 27 Peru ....................................4.72 28 Philippines ..........................4.68 29 Colombia ............................4.65 30 Israel...................................4.64 31 Panama...............................4.63 32 Morocco .............................4.62 33 Brazil...................................4.55 34 Hungary ..............................4.51 35 Poland.................................4.49 36 Vietnam ..............................4.49 37 India....................................4.47 38 Thailand ..............................4.45 39 Jordan.................................4.42 40 Egypt ..................................4.42 41 Ireland.................................4.41 42 China ..................................4.40 43 Kazakhstan .........................4.40 44 Romania .............................4.36 45 Ukraine ...............................4.34 46 Spain...................................4.31 47 Korea, Rep..........................4.22 48 Argentina ............................4.16 49 Turkey .................................4.15 50 Nigeria ................................4.13 51 Mexico ................................4.10 52 Russian Federation .............4.09 53 Kuwait.................................4.09 54 Pakistan ..............................4.06 55 Bangladesh .........................3.99 56 Italy.....................................3.91
2 Norway ...............................6.25 3 Finland ................................6.11 4 Canada ................................6.10 5 Netherlands ........................6.01 6 United Kingdom..................5.99 7 Australia..............................5.96 8 Singapore ...........................5.92 9 Switzerland .........................5.91 10 Denmark.............................5.85 11 Ireland .................................5.76 12 Germany .............................5.71 13 United States .....................5.58 14 Japan ..................................5.56 15 Belgium ..............................5.53 16 South Africa........................5.49 17 Austria ................................5.32 18 Israel...................................5.26 19 Malaysia..............................5.25 20 Chile....................................5.14 21 France.................................5.07 22 Czech Republic ...................5.01 23 United Arab Emirates .........4.98 24 Hong Kong SAR..................4.95 25 Slovak Republic ..................4.94 26 Saudi Arabia........................4.90 27 Korea, Rep..........................4.89 28 Philippines ..........................4.72 29 India....................................4.71 30 China ..................................4.71 31 Brazil...................................4.66 32 Poland.................................4.64 33 Spain...................................4.56 34 Indonesia ............................4.54 35 Thailand ..............................4.47 36 Peru ....................................4.45 37 Argentina ............................4.45 38 Romania .............................4.42 39 Hungary ..............................4.30 40 Nigeria ................................4.26 41 Vietnam ..............................4.25 42 Bahrain................................4.18 43 Colombia.............................4.18 44 Panama ...............................4.11 45 Turkey .................................4.09 46 Egypt ..................................4.05 47 Pakistan ..............................4.05 48 Bangladesh .........................3.93 49 Venezuela ...........................3.90 50 Jordan.................................3.87 51 Russian Federation .............3.86 52 Mexico................................3.82 53 Kuwait .................................3.76 54 Morocco .............................3.67 55 Kazakhstan .........................3.54 56 Italy.....................................3.52 57 Ukraine ...............................3.48
57 Venezuela............................3.76 SOURCE: World Economic Forum, Executive Opinion Survey SOURCE: World Economic Forum, Executive Opinion Survey
7
1.08
Willingness to delegate
Strength of auditing and reporting standards
In your country, how do you assess the willingness to delegate authority to subordinates? [1 = low—top management controls all important decisions; 7 = high—authority is mostly delegated to business unit heads and other lower-level managers] | 2009–10 weighted average
In your country, how would you assess financial auditing and reporting standards regarding company financial performance? [1 = extremely weak; 7 = extremely strong] | 2009–10 weighted average
RANK COUNTRY/ECONOMY RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.11
SCORE
1
MEAN: 5.02
7
1 South Africa........................6.36 1 Sweden ..............................6.47 2 Norway ...............................5.93 3 Denmark.............................5.80 4 Netherlands ........................5.69 5 Switzerland .........................5.22 6 Finland ................................5.15 7 Canada................................5.13 8 United States .....................5.09 9 Germany .............................5.01 10 Australia..............................4.87 11 Japan ..................................4.80 12 Belgium ..............................4.80 13 United Kingdom..................4.79 14 Malaysia..............................4.64 15 Austria ................................4.63 16 Saudi Arabia........................4.63 17 United Arab Emirates .........4.57 18 Singapore ...........................4.45 19 Ireland.................................4.33 20 Czech Republic ...................4.33 21 Kuwait.................................4.23 22 Israel...................................4.21 23 Bahrain ...............................4.20 24 South Africa ........................4.15 25 Indonesia ............................4.15 26 Hong Kong SAR..................4.12 27 Panama...............................4.05 28 Philippines ..........................4.00 29 Poland.................................4.00 30 Nigeria ................................3.97 31 Brazil...................................3.95 32 Slovak Republic ..................3.92 33 France.................................3.89 34 India....................................3.88 35 Colombia ............................3.85 36 Egypt ..................................3.70 37 Spain...................................3.66 38 Argentina ............................3.65 39 Vietnam ..............................3.64 40 Peru ....................................3.64 41 Chile ...................................3.64 42 China ..................................3.63 43 Jordan.................................3.55 44 Thailand ..............................3.47 45 Romania .............................3.44 46 Pakistan ..............................3.34 47 Mexico................................3.33 48 Korea, Rep..........................3.30 49 Kazakhstan .........................3.18 50 Morocco .............................3.18 51 Italy .....................................3.18 52 Russian Federation .............3.09 53 Venezuela ...........................3.08 54 Hungary ..............................3.04 55 Ukraine ...............................3.03 56 Turkey .................................2.84
2 Sweden ..............................6.32 3 Singapore............................6.19 4 Finland ................................6.17 5 Canada................................6.12 6 Norway ...............................6.10 7 Hong Kong SAR..................5.93 8 Australia ..............................5.76 9 Netherlands ........................5.76 10 Austria ................................5.70 11 Denmark.............................5.66 12 Bahrain ...............................5.65 13 Germany .............................5.62 14 United Kingdom..................5.62 15 Belgium ..............................5.61 16 Chile ...................................5.58 17 Switzerland .........................5.58 18 France.................................5.54 19 Israel...................................5.52 20 Hungary ..............................5.40 21 Malaysia..............................5.40 22 Japan ..................................5.36 23 United Arab Emirates .........5.36 24 Saudi Arabia........................5.36 25 Jordan.................................5.31 26 Thailand ..............................5.14 27 India ....................................5.13 28 Poland .................................5.12 29 Czech Republic ...................5.10 30 Panama...............................5.03 31 United States .....................4.98 32 Spain...................................4.87 33 Egypt ..................................4.83 34 Slovak Republic ..................4.82 35 Peru ....................................4.81 36 China ..................................4.79 37 Brazil ...................................4.76 38 Kuwait.................................4.75 39 Mexico................................4.70 40 Ireland.................................4.68 41 Philippines ..........................4.64 42 Romania .............................4.63 43 Indonesia ............................4.62 44 Turkey .................................4.37 45 Colombia ............................4.32 46 Korea, Rep..........................4.26 47 Pakistan ..............................4.23 48 Kazakhstan..........................4.19 49 Morocco .............................4.16 50 Venezuela ...........................3.98 51 Italy.....................................3.97 52 Russian Federation .............3.85 53 Vietnam ..............................3.84 54 Bangladesh .........................3.84 55 Argentina ............................3.80 56 Ukraine ...............................3.51 57 Nigeria ................................3.45
57 Bangladesh .........................2.77 SOURCE: World Economic Forum, Executive Opinion Survey SOURCE: World Economic Forum, Executive Opinion Survey
7
3: Data Tables | Institutional environment
1.07
301
3: Data Tables | Institutional environment
1.09
1.10
Ethical behavior of firms
Protection of minority shareholders’ interests
How would you compare the corporate ethics (ethical behavior in interactions with public officials, politicians, and other enterprises) of firms in your country with those of other countries in the world? [1 = among the worst in the world; 7 = among the best in the world] | 2009–10 weighted average
In your country, to what extent are the interests of minority shareholders protected by the legal system? [1 = not protected at all; 7 = fully protected] | 2009–10 weighted average
RANK COUNTRY/ECONOMY RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.64
1
MEAN: 4.53
1 Sweden ..............................6.05 1 Sweden ..............................6.78 2 Finland ................................6.62 3 Singapore ...........................6.58 4 Denmark.............................6.50 5 Switzerland .........................6.44 6 Norway ...............................6.37 7 Canada................................6.34 8 Netherlands ........................6.29 9 Australia ..............................6.17 10 Austria ................................6.15 11 Germany .............................6.04 12 United Kingdom..................6.02 13 Hong Kong SAR..................5.96 14 France.................................5.65 15 Japan ..................................5.64 16 Chile ...................................5.56 17 Belgium ..............................5.51 18 United Arab Emirates .........5.41 19 Israel...................................5.34 20 Ireland.................................5.34
302
SCORE
7
21 Bahrain ...............................5.33 22 United States......................5.16 23 Saudi Arabia........................5.16 24 Spain...................................4.70 25 Malaysia..............................4.67 26 Jordan.................................4.53 27 South Africa........................4.51 28 Kuwait.................................4.43 29 Poland.................................4.20 30 China...................................4.18 31 Panama ...............................4.15 32 Korea, Rep. .........................4.15 33 Egypt ..................................4.13 34 Colombia ............................3.95 35 Vietnam ..............................3.91 36 India....................................3.86 37 Thailand ..............................3.85 38 Morocco .............................3.77 39 Turkey..................................3.74 40 Italy.....................................3.70 41 Peru ....................................3.62 42 Kazakhstan .........................3.62 43 Czech Republic ...................3.61 44 Slovak Republic ..................3.59 45 Romania .............................3.58 46 Mexico................................3.55 47 Brazil...................................3.55 48 Indonesia ............................3.47 49 Pakistan ..............................3.44 50 Hungary ..............................3.34 51 Russian Federation .............3.29 52 Argentina ............................3.28 53 Bangladesh .........................3.27 54 Nigeria.................................3.11 55 Venezuela ...........................3.07 56 Philippines ..........................3.03
2 Finland ................................5.95 3 Norway ...............................5.84 4 South Africa........................5.61 5 Singapore ...........................5.52 6 Canada................................5.41 7 Denmark.............................5.36 8 Germany .............................5.23 9 Australia..............................5.20 10 United Kingdom..................5.14 11 Netherlands ........................5.11 12 Saudi Arabia ........................5.10 13 Bahrain................................5.10 14 United Arab Emirates .........5.07 15 Israel...................................5.04 16 Malaysia..............................5.02 17 Japan ..................................5.01 18 Belgium ..............................4.90 19 Jordan.................................4.89 20 Hong Kong SAR..................4.85 21 Chile ...................................4.83 22 Austria ................................4.78 23 United States .....................4.75 24 Switzerland .........................4.73 25 France.................................4.66 26 Thailand ..............................4.65 27 Panama...............................4.65 28 Egypt ..................................4.61 29 Indonesia ............................4.59 30 India....................................4.50 31 Ireland.................................4.48 32 Morocco .............................4.48 33 Poland.................................4.45 34 Peru ....................................4.40 35 Brazil...................................4.39 36 China ..................................4.37 37 Vietnam ..............................4.26 38 Slovak Republic ..................4.19 39 Spain...................................4.15 40 Hungary ..............................4.13 41 Romania..............................4.12 42 Philippines ..........................4.07 43 Mexico................................4.05 44 Kuwait .................................4.01 45 Czech Republic ...................3.97 46 Colombia ............................3.96 47 Pakistan ..............................3.93 48 Turkey .................................3.89 49 Korea, Rep..........................3.83 50 Kazakhstan .........................3.63 51 Nigeria ................................3.62 52 Argentina ............................3.50 53 Bangladesh .........................3.44 54 Italy.....................................3.39 55 Venezuela ...........................3.27 56 Russian Federation .............3.22 57 Ukraine ...............................2.82
57 Ukraine ...............................3.01 SOURCE: World Economic Forum, Executive Opinion Survey SOURCE: World Economic Forum, Executive Opinion Survey
7
1.12
Burden of government regulation
Centralization of economic policymaking
How burdensome is it for businesses in your country to comply with governmental administrative requirements (e.g., permits, regulations, reporting)? [1 = extremely burdensome; 7 = not burdensome at all] | 2009–10 weighted average
How centralized is economic policymaking in your country? [1 = highly centralized—national government controls almost all important decisions; 7 = decentralized—states and cities have significant control over economic development] | 2009–10 weighted average
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 3.22
7 RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 3.28
1 Singapore ...........................5.53 2 Hong Kong SAR..................5.15 3 Finland ................................4.32 4 United Arab Emirates .........4.31 5 Switzerland .........................4.21 6 Sweden ..............................4.04 7 Malaysia..............................4.04 8 Saudi Arabia........................4.04 9 Bahrain................................4.01 10 China ..................................4.00 11 Denmark.............................3.83 12 Indonesia ............................3.65 13 Austria ................................3.63 14 Panama...............................3.62 15 Canada................................3.62 16 Thailand ..............................3.60 17 Chile ...................................3.59 18 United States .....................3.48 19 Jordan.................................3.48 20 Norway ...............................3.41 21 Australia..............................3.40 22 Morocco .............................3.39 23 Japan ..................................3.28 24 Pakistan ..............................3.24 25 Kazakhstan .........................3.22 26 Netherlands ........................3.13 27 Egypt ..................................3.12 28 Turkey .................................3.08 29 Israel...................................3.07 30 Nigeria ................................3.06 31 Ireland.................................3.06 32 United Kingdom..................3.06 33 Germany .............................3.03 34 South Africa........................3.00 35 India....................................2.99 36 Romania .............................2.92 37 Bangladesh .........................2.89 38 Slovak Republic ..................2.84 39 Korea, Rep..........................2.81 40 Spain ...................................2.76 41 Poland.................................2.71 42 Mexico................................2.68 43 Kuwait.................................2.68 44 Czech Republic ...................2.67 45 Peru ....................................2.66 46 Vietnam ..............................2.62 47 Belgium ..............................2.62 48 France.................................2.61 49 Argentina ............................2.61 50 Colombia ............................2.61 51 Ukraine ...............................2.59 52 Philippines ..........................2.54 53 Russian Federation .............2.47 54 Italy.....................................2.22 55 Hungary ..............................2.20 56 Venezuela ...........................2.13 57 Brazil ...................................1.92
1 Switzerland .........................5.57 2 Belgium ..............................5.35
7
3: Data Tables | Institutional environment
1.11
3 Spain...................................5.15 4 Germany .............................4.76 5 Canada................................4.61 6 Australia..............................4.45 7 Indonesia ............................4.40 8 Poland.................................4.37 9 Austria ................................4.36 10 Czech Republic ...................4.27 11 United States......................4.16 12 Finland ................................4.08 13 Saudi Arabia ........................4.01 14 Netherlands ........................3.90 15 China ..................................3.87 16 Denmark.............................3.77 17 Hong Kong SAR ..................3.74 18 United Arab Emirates .........3.72 19 Israel...................................3.71 20 Sweden ..............................3.64 21 Malaysia..............................3.61 22 India....................................3.60 23 Italy.....................................3.52 24 Vietnam ..............................3.43 25 Kazakhstan .........................3.28 26 Peru ....................................3.27 27 Pakistan ..............................3.24 28 Slovak Republic ..................3.16 29 Colombia ............................3.09 30 Norway ...............................3.05 31 Romania .............................3.04 32 Mexico................................3.04 33 Morocco .............................3.01 34 Ukraine ...............................2.99 35 France.................................2.93 36 Korea, Rep..........................2.92 37 Hungary ..............................2.89 38 Russian Federation .............2.82 39 Philippines ..........................2.81 40 South Africa........................2.80 41 Bahrain................................2.76 42 Nigeria ................................2.75 43 Brazil...................................2.71 44 Thailand ..............................2.68 45 Jordan.................................2.58 46 United Kingdom..................2.53 47 Chile ...................................2.53 48 Japan ..................................2.45 49 Kuwait.................................2.38 50 Turkey .................................2.26 51 Panama...............................2.21 52 Egypt ..................................2.05 53 Singapore ...........................2.00 54 Bangladesh .........................1.92 55 Ireland .................................1.77 56 Argentina.............................1.68 57 Venezuela............................1.41
SOURCE: World Economic Forum, Executive Opinion Survey SOURCE: World Economic Forum, Executive Opinion Survey
303
3: Data Tables | Institutional environment
304
1.13
1.14
Regulation of securities exchanges
Property rights
How would you assess the regulation and supervision of securities exchanges in your country? [1 = ineffective; 7 = effective] | 2009â&#x20AC;&#x201C;10 weighted average
How would you rate the protection of property rights, including financial assets, in your country? [1 = very weak; 7 = very strong] | 2009â&#x20AC;&#x201C;10 weighted average
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.57
7
SCORE
1 South Africa........................6.04
1 Switzerland .........................6.41
2 Sweden ..............................5.91
2 Finland ................................6.41
3 Singapore ...........................5.78
3 Singapore ...........................6.34
4 Norway ...............................5.73
4 Hong Kong SAR..................6.29
5 Brazil...................................5.69
5 Sweden ..............................6.28
6 Finland ................................5.63
6 Austria ................................6.15
7 Switzerland .........................5.61
7 Germany .............................6.12
8 Australia..............................5.53
8 Norway ...............................6.07
9 Hong Kong SAR..................5.44
9 Canada................................6.06
10 Bahrain ...............................5.35
10 Denmark.............................6.03
11 Denmark.............................5.32
11 Ireland.................................5.89
12 India....................................5.28
12 Australia..............................5.87
13 France.................................5.22
13 Netherlands ........................5.84
14 Malaysia..............................5.19
14 France.................................5.83
15 Netherlands ........................5.17
15 United Kingdom..................5.75
16 Canada................................5.17
16 Bahrain ...............................5.62
17 Saudi Arabia........................5.09
17 Japan ..................................5.58
18 United Arab Emirates .........5.08
18 Belgium ..............................5.45
19 Jordan.................................5.03
19 Saudi Arabia........................5.42
20 Poland.................................4.99
20 South Africa........................5.40
21 Israel...................................4.98
21 Jordan.................................5.40
22 Germany .............................4.90
22 Chile ...................................5.21
23 Thailand ..............................4.84
23 China...................................5.11
24 Japan ..................................4.77
24 United States......................5.10
25 Belgium ..............................4.77
25 Malaysia..............................5.09
26 United Kingdom..................4.77
26 United Arab Emirates .........5.03
27 Morocco .............................4.75
27 Spain...................................4.92
28 Austria ................................4.66
28 Kuwait.................................4.92
29 Turkey .................................4.64
29 Israel...................................4.75
30 Czech Republic ...................4.64
30 Panama ...............................4.74
31 Indonesia ............................4.59
31 Korea, Rep..........................4.71
32 Hungary ..............................4.53
32 Egypt ..................................4.63
33 Bangladesh .........................4.41
33 Poland.................................4.59
34 China ..................................4.39
34 India....................................4.54
35 United States .....................4.32
35 Morocco .............................4.42
36 Egypt ..................................4.25
36 Czech Republic ...................4.39
37 Italy .....................................4.13
37 Hungary ..............................4.36
38 Philippines ..........................4.10
38 Italy.....................................4.30
39 Korea, Rep..........................4.05
39 Brazil...................................4.27
40 Pakistan ..............................4.05
40 Slovak Republic ..................4.25
41 Kuwait.................................4.04
41 Romania..............................4.17
42 Panama...............................4.02
42 Vietnam ..............................4.08
43 Nigeria ................................3.99
43 Turkey .................................4.05
44 Vietnam ..............................3.92
44 Indonesia ............................4.04
45 Slovak Republic ..................3.85
45 Mexico................................3.93
46 Ireland.................................3.80
46 Thailand ..............................3.91
47 Mexico................................3.79
47 Colombia ............................3.84
48 Venezuela ...........................3.75
48 Peru ....................................3.83
49 Romania ..............................3.74
49 Philippines ..........................3.67
50 Chile ...................................3.69
50 Pakistan ..............................3.57
51 Argentina ............................3.62
51 Kazakhstan .........................3.47
52 Spain...................................3.52
52 Bangladesh .........................3.44
53 Colombia ............................3.47
53 Nigeria ................................3.33
54 Peru ....................................3.42
54 Russian Federation .............2.94
55 Russian Federation .............3.32
55 Argentina ............................2.65
56 Kazakhstan .........................3.28
56 Ukraine ...............................2.60
57 Ukraine................................2.74
57 Venezuela............................1.75
SOURCE: World Economic Forum, Executive Opinion Survey
1
MEAN: 4.79
SOURCE: World Economic Forum, Executive Opinion Survey
7
1.16
Intellectual property protection
Diversion of public funds
How would you rate intellectual property protection, including anti-counterfeiting measures, in your country? [1 = very weak; 7 = very strong] | 2009â&#x20AC;&#x201C;10 weighted average
In your country, how common is diversion of public funds to companies, individuals, or groups due to corruption? [1 = very common; 7 = never occurs] | 2009â&#x20AC;&#x201C;10 weighted average
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.21
1 Sweden ..............................6.23
7
SCORE
2 Finland ................................6.16
2 Singapore ...........................6.43
3 Singapore............................6.12
3 Denmark.............................6.36
4 Switzerland .........................6.01
4 Finland ................................6.30
5 France.................................5.86
5 Switzerland .........................6.11
6 Germany .............................5.75
6 Hong Kong SAR..................5.99
7 Netherlands ........................5.68
7 Norway ...............................5.94
8 Austria ................................5.68
8 Netherlands ........................5.90
9 Denmark.............................5.67
9 United Kingdom..................5.81
10 Canada................................5.63
10 Australia..............................5.79
11 Australia..............................5.63
11 Germany .............................5.75
12 Ireland.................................5.60
12 Canada................................5.67
13 Norway ...............................5.59
13 Austria ................................5.67
14 United Kingdom..................5.50
14 Ireland.................................5.34
15 Hong Kong SAR..................5.35
15 Bahrain ...............................5.31
16 United Arab Emirates .........5.30
16 Israel...................................5.29
17 Japan ..................................5.22
17 France.................................5.20
18 Bahrain................................5.17
18 United Arab Emirates .........5.18
19 Belgium ..............................5.12
19 Japan ..................................5.16
20 United States......................5.11
20 Saudi Arabia........................5.12
21 South Africa........................4.92
21 Belgium ..............................5.06
22 Saudi Arabia........................4.80
22 United States .....................4.69
23 Malaysia..............................4.67
23 Chile ...................................4.63
24 Jordan.................................4.41
24 Jordan.................................4.26
25 Spain...................................4.26
25 Poland .................................4.17
26 Israel...................................4.20
26 Malaysia ..............................4.11
27 Korea, Rep. .........................4.13
27 Spain...................................3.97
28 Kuwait .................................4.10
28 China...................................3.76
29 Panama...............................4.03
29 Korea, Rep..........................3.68
30 China ..................................3.99
30 Kuwait.................................3.61
31 Hungary ..............................3.96
31 Indonesia ............................3.54
32 Czech Republic ...................3.94
32 Morocco .............................3.41
33 Slovak Republic ..................3.80
33 Thailand ..............................3.34
34 Indonesia ............................3.78
34 Vietnam ..............................3.30
35 Chile ...................................3.73
35 India....................................3.25
36 Poland.................................3.72
36 Panama...............................3.21
37 Italy.....................................3.66
37 Turkey .................................3.20
38 India....................................3.58
38 Italy .....................................3.15
39 Egypt ..................................3.58
39 South Africa ........................3.12
40 Morocco .............................3.39
40 Egypt...................................3.11
41 Romania..............................3.17
41 Romania .............................3.08
42 Thailand...............................3.11
42 Peru ....................................3.07
43 Mexico ................................3.10
43 Pakistan ..............................2.95
44 Pakistan ..............................3.10
44 Kazakhstan .........................2.81
45 Brazil...................................3.06
45 Mexico................................2.80
46 Colombia ............................2.95
46 Hungary ..............................2.73
47 Nigeria ................................2.88
47 Czech Republic ...................2.72
48 Kazakhstan .........................2.85
48 Colombia ............................2.64
49 Philippines ..........................2.78
49 Bangladesh .........................2.62
50 Vietnam ..............................2.70
50 Russian Federation .............2.61
51 Ukraine ...............................2.64
51 Slovak Republic ..................2.53
52 Turkey .................................2.59
52 Brazil...................................2.33
53 Russian Federation .............2.58
53 Nigeria ................................2.23
54 Bangladesh .........................2.56
54 Ukraine ...............................2.17
55 Peru ....................................2.56
55 Argentina ............................2.07
56 Argentina ............................2.49
56 Philippines ..........................2.00
57 Venezuela............................1.92
57 Venezuela............................1.94
SOURCE: World Economic Forum, Executive Opinion Survey
1
MEAN: 4.08
1 Sweden ..............................6.48
SOURCE: World Economic Forum, Executive Opinion Survey
7
3: Data Tables | Institutional environment
1.15
305
3: Data Tables | Institutional environment
306
1.17
1.18
Public trust of politicians
Corruption perceptions index
How would you rate the level of public trust in the ethical standards of politicians in your country? [1 = very low; 7 = very high] | 2009â&#x20AC;&#x201C;10 weighted average
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 | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 3.28
1 Singapore ...........................6.42
7
SCORE
1 Denmark ...............................9.30
2 Sweden ..............................5.82
2 Singapore ..............................9.20
3 Norway ...............................5.60
2 Sweden .................................9.20
4 United Arab Emirates .........5.59
4 Switzerland ...........................9.00
5 Saudi Arabia........................5.44
5 Finland...................................8.90
6 Denmark.............................5.42
5 Netherlands...........................8.90
7 Switzerland .........................5.20
7 Australia ................................8.70
8 Finland ................................5.08
7 Canada ..................................8.70
9 Netherlands ........................5.01
9 Norway..................................8.60
10 Hong Kong SAR..................4.66
10 Hong Kong SAR ....................8.20
11 Australia..............................4.65
11 Germany ...............................8.00
12 China ..................................4.26
11 Ireland ...................................8.00
13 Canada................................4.25
13 Austria....................................7.90
14 Bahrain ...............................4.07
14 Japan .....................................7.70
15 Austria ................................4.03
14 United Kingdom.....................7.70
16 Germany .............................4.03
16 United States.........................7.50
17 France.................................3.94
17 Belgium ..................................7.10
18 Vietnam ..............................3.91
18 France ...................................6.90
19 Chile ...................................3.79
19 Chile ......................................6.70
20 Malaysia..............................3.75
20 United Arab Emirates............6.50
21 Israel...................................3.69
21 Israel......................................6.10
22 Egypt ..................................3.63
21 Spain .....................................6.10
23 Jordan.................................3.54
23 Korea, Rep. ...........................5.50
24 Kuwait.................................3.41
24 Bahrain ..................................5.10
25 Kazakhstan .........................3.38
24 Hungary.................................5.10
26 Belgium ..............................3.37
26 Jordan ...................................5.00
27 Indonesia ............................3.33
26 Poland ...................................5.00
28 United States .....................3.28
28 Czech Republic......................4.90
29 United Kingdom..................3.24
29 South Africa ..........................4.70
30 Japan ..................................3.15
30 Malaysia ................................4.50
31 Morocco .............................3.15
30 Slovak Republic .....................4.50
32 Ireland.................................3.00
32 Turkey....................................4.40
33 Russian Federation .............2.90
33 Italy .......................................4.30
34 Spain...................................2.65
33 Saudi Arabia ..........................4.30
35 Turkey .................................2.50
35 Kuwait ...................................4.10
36 Poland.................................2.49
36 Romania ................................3.80
37 Thailand ..............................2.48
37 Brazil .....................................3.70
38 South Africa........................2.37
37 Colombia ...............................3.70
39 India....................................2.32
37 Peru .......................................3.70
40 Pakistan ..............................2.28
40 China .....................................3.60
41 Mexico................................2.18
41 India ......................................3.40
42 Colombia.............................2.16
41 Panama .................................3.40
43 Panama ...............................2.12
41 Thailand .................................3.40
44 Korea, Rep. .........................2.12
44 Mexico ..................................3.30
45 Italy.....................................2.04
44 Morocco................................3.30
46 Bangladesh .........................1.97
46 Argentina...............................2.90
47 Romania ..............................1.97
47 Egypt.....................................2.80
48 Peru.....................................1.90
47 Indonesia...............................2.80
49 Czech Republic....................1.89
49 Kazakhstan ............................2.70
50 Ukraine................................1.86
49 Vietnam .................................2.70
51 Nigeria.................................1.78
51 Nigeria...................................2.50
52 Brazil ...................................1.77
52 Bangladesh ...........................2.40
53 Hungary ..............................1.75
52 Pakistan.................................2.40
54 Slovak Republic...................1.68
52 Philippines.............................2.40
55 Philippines...........................1.64
55 Russian Federation................2.20
56 Argentina.............................1.50
55 Ukraine..................................2.20
57 Venezuela............................1.48
57 Venezuela ..............................1.90
SOURCE: World Economic Forum, Executive Opinion Survey
SOURCE: Transparency International, Corruption Perceptions Index 2009
1.20
Strength of legal rights index
Central bank transparency
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 | 2009
This index measures the degree of transparency that exists in a central bank’s policy actions. The index ranges from 0 to 15, with higher scores indicating that a central bank operates with greater transparency | 2009
RANK COUNTRY/ECONOMY RANK COUNTRY/ECONOMY
HARD DATA
SCORE
1 Sweden ...............................15.00 1 Hong Kong SAR ..................10.00 1 Malaysia ..............................10.00 1 Singapore ............................10.00 4 Australia ................................9.00 4 Denmark ...............................9.00 4 Israel .....................................9.00 4 Poland ...................................9.00 4 Slovak Republic.....................9.00 4 South Africa ..........................9.00 4 Ukraine..................................9.00 4 United Kingdom ....................9.00 12 India ......................................8.00 12 Ireland ...................................8.00 12 Nigeria...................................8.00 12 Romania ................................8.00 12 Switzerland ...........................8.00 12 United States ........................8.00 12 Vietnam.................................8.00 19 Austria....................................7.00 19 Bangladesh ............................7.00 19 Belgium..................................7.00 19 Finland ...................................7.00 19 France ....................................7.00 19 Germany ................................7.00 19 Hungary .................................7.00 19 Japan .....................................7.00 19 Korea, Rep. ............................7.00 19 Norway ..................................7.00 19 Peru........................................7.00 30 Canada ..................................6.00 30 China .....................................6.00 30 Czech Republic......................6.00 30 Netherlands...........................6.00 30 Pakistan.................................6.00 30 Panama .................................6.00 30 Spain .....................................6.00 37 Colombia ...............................5.00 37 Kazakhstan............................5.00 37 Sweden .................................5.00 40 Argentina...............................4.00 40 Bahrain ..................................4.00 40 Chile ......................................4.00 40 Jordan ...................................4.00 40 Kuwait ...................................4.00 40 Mexico ..................................4.00 40 Saudi Arabia ..........................4.00 40 Thailand.................................4.00 40 Turkey....................................4.00 40 United Arab Emirates............4.00 50 Brazil .....................................3.00 50 Egypt.....................................3.00 50 Indonesia...............................3.00 50 Italy .......................................3.00 50 Morocco................................3.00 50 Philippines.............................3.00 50 Russian Federation ...............3.00
2 United Kingdom ..................12.50 3 Austria..................................11.00 3 Belgium................................11.00 3 Canada .................................11.00 3 Finland .................................11.00 3 France ..................................11.00 3 Germany ..............................11.00 3 Hungary ...............................11.00 3 Ireland ..................................11.00 3 Italy ......................................11.00 3 Netherlands .........................11.00 3 Spain ....................................11.00 14 Australia...............................10.50 15 Japan ...................................10.00 15 Poland..................................10.00 15 United States ......................10.00 18 Israel .....................................9.50 18 Philippines.............................9.50 18 South Africa ..........................9.50 18 Switzerland............................9.50 18 Turkey....................................9.50 23 Brazil .....................................9.00 23 Korea, Rep. ...........................9.00 25 Indonesia...............................8.00 25 Norway .................................8.00 25 Peru.......................................8.00 25 Thailand.................................8.00 29 Argentina ...............................7.50 29 Chile.......................................7.50 29 Colombia................................7.50 29 Denmark ................................7.50 33 Mexico ...................................7.00 33 Singapore...............................7.00 35 Romania ................................6.50 36 Malaysia ................................6.00 36 Slovak Republic.....................6.00 38 Kazakhstan ............................5.50 39 China .....................................4.50 40 Nigeria...................................4.00 40 Ukraine..................................4.00 42 Bahrain ..................................3.50 42 Pakistan.................................3.50 44 Russian Federation ...............3.00 45 Egypt.....................................2.50 46 India ......................................2.00 46 Jordan ...................................2.00 46 Kuwait ...................................2.00 46 United Arab Emirates............2.00 50 Saudi Arabia...........................1.00 n/a Bangladesh..............................n/a n/a Czech Republic........................n/a n/a Hong Kong SAR ......................n/a n/a Morocco ..................................n/a n/a Panama....................................n/a n/a Venezuela ................................n/a n/a Vietnam ...................................n/a
57 Venezuela..............................2.00 SOURCE: Pierre L. Siklos. 2010. “Central Bank Transparency: An Updated SOURCE: The World Bank, Doing Business 2010
3: Data Tables | Institutional environment
1.19
Look.” Applied Economics Letters (forthcoming)
307
3: Data Tables | Institutional environment
308
1.21
1.22
Effectiveness of law-making bodies
Judicial independence
How effective is your national parliament/congress as a law-making institution? [1 = very ineffective; 7 = very effective—among the best in the world] | 2009–10 weighted average
To what extent is the judiciary in your country independent from influences of members of government, citizens, or firms? [1 = heavily influenced; 7 = entirely independent] | 2009–10 weighted average
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 3.79
7
SCORE
1 Singapore ...........................6.49
1 Sweden ..............................6.56
2 Sweden ..............................5.88
2 Denmark.............................6.40
3 Australia..............................5.66
3 Switzerland .........................6.39
4 Finland ................................5.48
4 Germany .............................6.37
5 Denmark.............................5.39
5 Finland ................................6.33
6 Norway ...............................5.24
6 United Kingdom..................6.29
7 Canada ................................5.11
7 Australia..............................6.28
8 United Kingdom..................5.06
8 Ireland.................................6.25
9 France.................................5.05
9 Canada................................6.24
10 Switzerland .........................4.96
10 Netherlands ........................6.23
11 Germany .............................4.95
11 Norway ...............................6.22
12 Malaysia..............................4.63
12 Israel...................................6.21
13 United Arab Emirates .........4.62
13 Hong Kong SAR..................6.15
14 Netherlands ........................4.60
14 Austria ................................5.77
15 Saudi Arabia........................4.53
15 Japan ..................................5.70
16 Austria ................................4.43
16 Singapore ...........................5.64
17 South Africa........................4.42
17 Chile ...................................5.36
18 China ..................................4.41
18 Belgium ..............................5.20
19 Japan ..................................4.40
19 Saudi Arabia........................5.20
20 Israel...................................4.32
20 Bahrain ...............................5.04
21 India....................................4.30
21 United States .....................4.97
22 Hong Kong SAR..................4.17
22 Kuwait.................................4.93
23 Vietnam ..............................4.15
23 United Arab Emirates .........4.89
24 Ireland.................................4.02
24 France.................................4.79
25 United States .....................3.98
25 India....................................4.77
26 Chile ...................................3.96
26 South Africa........................4.70
27 Turkey .................................3.95
27 Jordan.................................4.61
28 Egypt ..................................3.77
28 Malaysia..............................4.34
29 Kazakhstan .........................3.71
29 Poland.................................4.33
30 Morocco .............................3.68
30 Thailand ..............................4.32
31 Bahrain ...............................3.68
31 Hungary ..............................4.04
32 Indonesia ............................3.60
32 Korea, Rep..........................3.99
33 Spain...................................3.51
33 Czech Republic ...................3.97
34 Thailand ..............................3.36
34 China ..................................3.97
35 Belgium ..............................3.33
35 Egypt ..................................3.91
36 Nigeria ................................3.29
36 Vietnam ..............................3.87
37 Kuwait.................................3.29
37 Spain...................................3.82
38 Russian Federation .............3.29
38 Indonesia ............................3.80
39 Poland.................................3.26
39 Pakistan ..............................3.55
40 Czech Republic ...................3.07
40 Brazil...................................3.52
41 Slovak Republic ..................3.03
41 Colombia ............................3.48
42 Bangladesh .........................3.03
42 Morocco .............................3.48
43 Italy.....................................2.99
43 Nigeria ................................3.48
44 Jordan.................................2.92
44 Italy.....................................3.48
45 Pakistan ..............................2.86
45 Romania .............................3.47
46 Hungary ..............................2.86
46 Turkey .................................3.40
47 Romania .............................2.85
47 Bangladesh .........................3.39
48 Colombia ............................2.79
48 Mexico................................3.22
49 Philippines ..........................2.52
49 Slovak Republic ..................2.90
50 Mexico................................2.48
50 Kazakhstan .........................2.86
51 Panama...............................2.44
51 Philippines ..........................2.84
52 Brazil...................................2.44
52 Russian Federation .............2.72
53 Argentina ............................2.21
53 Peru ....................................2.61
54 Korea, Rep. .........................2.18
54 Argentina ............................2.56
55 Ukraine ...............................2.03
55 Panama...............................2.51
56 Peru.....................................1.86
56 Ukraine ...............................2.00
57 Venezuela............................1.57
57 Venezuela............................1.69
SOURCE: World Economic Forum, Executive Opinion Survey
1
MEAN: 4.47
SOURCE: World Economic Forum, Executive Opinion Survey
7
1.24
Irregular payments in judicial decisions
Time to enforce a contract
In your country, how common is it for firms to make undocumented extra payments or bribes connected with obtaining favorable judicial decisions? [1 = very common; 7 = never occurs] | 2009â&#x20AC;&#x201C;10 weighted average
This variable is the time in days to resolve a dispute related to a contract | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.72
7
SCORE
1 Sweden...............................6.76
1 Singapore ..........................150.00
2 Finland ................................6.71
2 Korea, Rep. .......................230.00
3 Singapore ...........................6.69
3 Hong Kong SAR ................280.00
4 Denmark.............................6.61
3 Norway .............................280.00
5 Norway ...............................6.53
5 Russian Federation ............281.00
6 Hong Kong SAR..................6.52
6 Vietnam.............................295.00
7 Switzerland .........................6.52
7 United States ....................300.00
8 Canada................................6.46
8 France................................331.00
9 Germany .............................6.45
9 Ukraine..............................345.00
10 Israel...................................6.37
10 Japan.................................360.00
11 Japan ..................................6.36
11 Finland...............................375.00
12 Ireland.................................6.36
12 Denmark ...........................380.00
13 Austria ................................6.33
13 Kazakhstan........................390.00
14 Netherlands ........................6.31
14 Germany ...........................394.00
15 Australia..............................6.23
15 Australia ............................395.00
16 United Kingdom..................6.23
15 Hungary ............................395.00
17 Belgium ..............................5.87
17 Austria................................397.00
18 Saudi Arabia........................5.84
18 United Kingdom ................399.00
19 United Arab Emirates .........5.84
19 China .................................406.00
20 France.................................5.82
20 Mexico ..............................415.00
21 Chile ...................................5.49
21 Switzerland ........................417.00
22 Bahrain ...............................5.47
22 Turkey................................420.00
23 South Africa........................5.30
23 Peru...................................428.00
24 Kuwait.................................5.26
24 Nigeria ...............................457.00
25 Spain...................................5.20
25 Thailand.............................479.00
26 Jordan.................................5.14
26 Chile ..................................480.00
27 United States .....................4.97
27 Belgium.............................505.00
28 Egypt ..................................4.95
28 Sweden .............................508.00
29 Poland.................................4.88
29 Venezuela ..........................510.00
30 Hungary ..............................4.51
30 Romania ............................512.00
31 India....................................4.46
31 Netherlands.......................514.00
32 Malaysia..............................4.40
32 Ireland ...............................515.00
33 Thailand ..............................4.40
32 Spain .................................515.00
34 Korea, Rep..........................4.24
34 United Arab Emirates ........537.00
35 Italy.....................................4.00
35 Slovak Republic.................565.00
36 Romania .............................3.99
36 Kuwait ...............................566.00
37 Czech Republic ...................3.96
37 Canada ..............................570.00
38 China ..................................3.96
37 Indonesia...........................570.00
39 Brazil...................................3.80
39 Malaysia ............................585.00
40 Turkey .................................3.60
40 Argentina...........................590.00
41 Nigeria ................................3.46
41 South Africa ......................600.00
42 Indonesia ............................3.35
42 Czech Republic ..................611.00
43 Morocco .............................3.33
43 Morocco ............................615.00
44 Colombia ............................3.26
44 Brazil..................................616.00
45 Vietnam ..............................3.22
45 Bahrain ..............................635.00
46 Pakistan ..............................3.20
45 Saudi Arabia ......................635.00
47 Panama ...............................3.19
47 Panama .............................686.00
48 Bangladesh .........................3.17
48 Jordan ...............................689.00
49 Argentina ............................3.15
49 Poland ...............................830.00
50 Russian Federation .............3.08
50 Philippines.........................842.00
51 Mexico................................2.97
51 Israel .................................890.00
52 Kazakhstan .........................2.91
52 Pakistan.............................976.00
53 Slovak Republic ..................2.90
53 Egypt ..............................1,010.00
54 Philippines ..........................2.64
54 Italy.................................1,210.00
55 Peru ....................................2.41
55 Colombia ........................1,346.00
56 Venezuela ...........................2.19
56 India ...............................1,420.00
57 Ukraine................................1.87
57 Bangladesh ....................1,442.00
SOURCE: World Economic Forum, Executive Opinion Survey
SOURCE: The World Bank, Doing Business 2010
3: Data Tables | Institutional environment
1.23
309
3: Data Tables | Institutional environment
310
1.25
1.26
Number of procedures to enforce a contract
Strength of investor protection index
This variable is the number of procedures from the moment the plaintiff files a lawsuit in court until the moment of payment | 2009
This index assesses the strength of investor protection on a 0-to-10 (best) scale | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
SCORE
1 Ireland .................................20.00
1 Singapore ..............................9.30
2 Singapore ............................21.00
2 Hong Kong SAR ....................9.00
3 Hong Kong SAR ..................24.00
3 Malaysia ................................8.70
4 Austria.................................25.00
4 Canada ..................................8.30
4 Belgium...............................25.00
4 Colombia ...............................8.30
4 Netherlands.........................25.00
4 Ireland ...................................8.30
7 Czech Republic ....................27.00
4 Israel .....................................8.30
8 Australia ..............................28.00
4 United States ........................8.30
9 France .................................29.00
9 South Africa ..........................8.00
9 Venezuela............................29.00
9 United Kingdom ....................8.00
11 Germany .............................30.00
11 Thailand..................................7.70
11 Japan...................................30.00
12 Belgium..................................7.00
11 Malaysia ..............................30.00
12 Japan .....................................7.00
11 Slovak Republic...................30.00
12 Saudi Arabia ...........................7.00
11 South Africa ........................30.00
15 Bangladesh ...........................6.70
11 Sweden ...............................30.00
15 Norway..................................6.70
11 Ukraine................................30.00
15 Peru .......................................6.70
11 United Kingdom ..................30.00
18 Denmark ...............................6.30
19 Panama................................31.00
18 Kuwait ...................................6.30
19 Romania ..............................31.00
18 Pakistan.................................6.30
19 Switzerland ..........................31.00
21 Chile ......................................6.00
22 Finland.................................32.00
21 India ......................................6.00
22 United States ......................32.00
21 Indonesia...............................6.00
24 Hungary ..............................33.00
21 Mexico ..................................6.00
24 Norway ...............................33.00
21 Poland ...................................6.00
26 China ...................................34.00
21 Romania ................................6.00
26 Colombia .............................34.00
27 Australia ................................5.70
26 Denmark .............................34.00
27 Bahrain ..................................5.70
26 Vietnam...............................34.00
27 Finland...................................5.70
30 Israel ...................................35.00
27 Italy .......................................5.70
30 Korea, Rep. .........................35.00
27 Kazakhstan ............................5.70
30 Thailand...............................35.00
27 Nigeria...................................5.70
30 Turkey..................................35.00
27 Sweden .................................5.70
34 Argentina.............................36.00
27 Turkey....................................5.70
34 Canada ................................36.00
35 Brazil .....................................5.30
34 Chile ....................................36.00
35 Egypt.....................................5.30
37 Philippines ...........................37.00
35 France ...................................5.30
37 Russian Federation ..............37.00
35 Korea, Rep. ...........................5.30
39 Jordan .................................38.00
39 China .....................................5.00
39 Kazakhstan..........................38.00
39 Czech Republic......................5.00
39 Mexico ................................38.00
39 Germany ...............................5.00
39 Poland .................................38.00
39 Russian Federation ...............5.00
43 Indonesia.............................39.00
39 Spain .....................................5.00
43 Nigeria.................................39.00
44 Argentina...............................4.70
43 Spain ...................................39.00
44 Netherlands...........................4.70
46 Italy .....................................40.00
44 Panama .................................4.70
46 Morocco..............................40.00
44 Slovak Republic .....................4.70
48 Bangladesh ..........................41.00
44 Ukraine..................................4.70
48 Egypt ...................................41.00
49 Hungary ................................4.30
48 Peru .....................................41.00
49 Jordan ...................................4.30
51 Saudi Arabia ........................43.00
49 United Arab Emirates............4.30
52 Brazil ...................................45.00
52 Austria...................................4.00
53 India ....................................46.00
52 Philippines.............................4.00
54 Pakistan ...............................47.00
54 Morocco................................3.00
55 Bahrain ................................48.00
54 Switzerland ...........................3.00
56 United Arab Emirates..........49.00
56 Vietnam .................................2.70
57 Kuwait .................................50.00
57 Venezuela ..............................2.30
SOURCE: The World Bank, Doing Business 2010
SOURCE: The World Bank, Doing Business 2010
Cost of enforcing contracts This variable is the cost of enforcing contracts as a percentage of legal claim | 2009
RANK COUNTRY/ECONOMY
SCORE
1 Norway..................................9.90 2 Korea, Rep...........................10.30
3: Data Tables | Institutional environment
1.27
3 Finland .................................10.40 4 China ....................................11.10 5 Poland .................................12.00 6 Thailand ...............................12.30 7 Hungary...............................13.00 8 Russian Federation..............13.40 9 Germany..............................14.40 9 United States ......................14.40 11 Bahrain ................................14.70 12 Argentina.............................16.50 12 Brazil....................................16.50 14 Belgium ...............................16.60 15 Spain ....................................17.20 16 France ..................................17.40 17 Austria .................................18.00 18 Kuwait .................................18.80 18 Turkey ..................................18.80 20 Hong Kong SAR ..................19.50 21 Australia ..............................20.70 22 Kazakhstan..........................22.00 23 Canada ................................22.30 24 Japan...................................22.70 25 Denmark .............................23.30 26 United Kingdom ..................23.40 27 Pakistan...............................23.80 28 Switzerland .........................24.00 29 Netherlands.........................24.40 30 Morocco..............................25.20 31 Israel ...................................25.30 32 Singapore ............................25.80 33 Philippines...........................26.00 34 Egypt...................................26.20 34 United Arab Emirates..........26.20 36 Ireland .................................26.90 37 Malaysia ...............................27.50 37 Saudi Arabia .........................27.50 39 Vietnam ...............................28.50 40 Chile ....................................28.60 41 Romania ..............................28.90 42 Italy .....................................29.90 43 Slovak Republic...................30.00 44 Jordan..................................31.20 44 Sweden ...............................31.20 46 Mexico ................................32.00 46 Nigeria.................................32.00 48 Czech Republic....................33.00 49 South Africa ........................33.20 50 Peru .....................................35.70 51 India ....................................39.60 52 Ukraine ................................41.50 53 Venezuela ............................43.70 54 Panama ...............................50.00 55 Colombia .............................52.60 56 Bangladesh .........................63.30 57 Indonesia...........................122.70 SOURCE: The World Bank, Doing Business 2010
311
Data Tables
Section II Business environment
3: Data Tables | Business environment
314
2.01
2.02
Quality of management schools
Quality of math and science education
How would you assess the quality of management or business schools in your country? [1 = poor; 7 = excellent—among the best in the world] | 2009–10 weighted average
How would you assess the quality of math and science education in your country’s schools? [1 = poor; 7 = excellent—among the best in the world] | 2009–10 weighted average
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.62
7
SCORE
1 Switzerland .........................6.07
1 Singapore ...........................6.46
2 Canada................................5.97
2 Belgium ..............................6.18
3 Belgium ..............................5.96
3 Finland ................................6.16
4 France .................................5.74
4 Switzerland .........................5.78
5 Singapore ...........................5.65
5 Canada................................5.44
6 Sweden ..............................5.63
6 France.................................5.36
7 Spain...................................5.62
7 Hong Kong SAR..................5.35
8 United Kingdom..................5.54
8 Netherlands ........................5.22
9 United States .....................5.52
9 Korea, Rep. .........................5.12
10 Netherlands ........................5.49
10 Denmark.............................5.05
11 Denmark.............................5.41
11 Sweden ..............................5.04
12 Chile ...................................5.34
12 Australia..............................4.91
13 Argentina ............................5.29
13 Czech Republic ...................4.90
14 Australia..............................5.29
14 United Arab Emirates .........4.89
15 Finland ................................5.28
15 Japan ..................................4.86
16 Norway ...............................5.23
16 Hungary ..............................4.82
17 South Africa ........................5.12
17 Malaysia..............................4.79
18 India....................................5.08
18 China ...................................4.74
19 Hong Kong SAR..................5.07
19 Ireland.................................4.73
20 Ireland.................................5.02
20 Austria ................................4.69
21 United Arab Emirates .........4.97
21 India....................................4.67
22 Germany .............................4.93
22 Germany .............................4.66
23 Austria ................................4.91
23 Poland.................................4.61
24 Malaysia..............................4.75
24 Ukraine ...............................4.59
25 Italy.....................................4.68
25 Romania .............................4.58
26 Peru ....................................4.61
26 Bahrain ...............................4.52
27 Bahrain ...............................4.56
27 Indonesia ............................4.49
28 Israel...................................4.55
28 Saudi Arabia........................4.47
29 Korea, Rep..........................4.53
29 Vietnam ..............................4.45
30 Morocco .............................4.52
30 United States .....................4.43
31 Mexico................................4.48
31 Jordan.................................4.42
32 Indonesia ............................4.43
32 Russian Federation .............4.42
33 Czech Republic ...................4.43
33 United Kingdom..................4.41
34 Venezuela ...........................4.39
34 Thailand ..............................4.27
35 Thailand ..............................4.35
35 Norway ...............................4.11
36 Colombia ............................4.34
36 Slovak Republic...................4.11
37 Saudi Arabia........................4.33
37 Morocco .............................4.01
38 Philippines ..........................4.29
38 Kazakhstan .........................3.77
39 Poland.................................4.23
39 Italy.....................................3.64
40 China ..................................4.20
40 Kuwait.................................3.54
41 Japan ..................................4.17
41 Pakistan ..............................3.54
42 Hungary ..............................4.12
42 Colombia ............................3.51
43 Brazil...................................4.07
43 Israel...................................3.50
44 Pakistan ..............................3.96
44 Turkey .................................3.42
45 Jordan.................................3.94
45 Bangladesh .........................3.23
46 Bangladesh .........................3.83
46 Argentina ............................3.18
47 Russian Federation .............3.75
47 Philippines...........................3.11
48 Kuwait.................................3.71
48 Spain...................................3.07
49 Romania .............................3.68
49 Venezuela ...........................2.89
50 Nigeria ................................3.67
50 Nigeria ................................2.86
51 Kazakhstan .........................3.60
51 Chile....................................2.76
52 Turkey .................................3.58
52 Egypt ..................................2.70
53 Vietnam ..............................3.50
53 Brazil...................................2.67
54 Ukraine ...............................3.49
54 Mexico................................2.57
55 Panama...............................3.49
55 Panama...............................2.57
56 Slovak Republic ..................3.45
56 Peru ....................................2.45
57 Egypt ..................................3.26
57 South Africa........................2.00
SOURCE: World Economic Forum, Executive Opinion Survey
1
MEAN: 4.22
SOURCE: World Economic Forum, Executive Opinion Survey
7
2.04
Extent of staff training
Local availability of specialized research and training services
To what extent do companies in your country invest in training and employee development? [1 = hardly at all; 7 = to a great extent] | 2009â&#x20AC;&#x201C;10 weighted average
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.34
7
In your country, to what extent are high-quality, specialized training services available? [1 = not available; 7 = widely available] | 2009â&#x20AC;&#x201C;10 weighted average
RANK COUNTRY/ECONOMY
SCORE
1 Sweden ..............................5.70
1 Switzerland .........................6.47
2 Switzerland .........................5.51
2 Germany .............................6.21
3 Norway ...............................5.47
3 Sweden...............................6.11
4 Singapore ...........................5.45
4 Netherlands ........................6.02
5 Japan ..................................5.42
5 France.................................5.89
6 Denmark.............................5.40
6 Austria ................................5.89
7 Germany .............................5.24
7 Finland ................................5.81
8 Finland ................................5.23
8 Denmark.............................5.80
9 United States .....................5.09
9 Belgium ..............................5.79
10 Netherlands ........................5.09
10 United States......................5.76
11 Canada................................4.98
11 Canada................................5.69
12 Malaysia..............................4.97
12 United Kingdom..................5.67
13 Austria ................................4.93
13 Japan ..................................5.55
14 Belgium ..............................4.92
14 Norway ...............................5.49
15 Bahrain ...............................4.88
15 Hong Kong SAR..................5.42
16 Australia..............................4.77
16 Czech Republic ...................5.36
17 Ireland.................................4.75
17 Singapore ...........................5.27
18 Israel...................................4.72
18 Australia..............................5.26
19 South Africa........................4.72
19 Poland.................................5.09
20 Hong Kong SAR..................4.71
20 United Arab Emirates .........5.08
21 United Kingdom..................4.70
21 Ireland.................................5.05
22 United Arab Emirates .........4.66
22 Malaysia..............................5.02
23 France.................................4.65
23 Spain ...................................5.01
24 Chile ...................................4.41
24 Israel...................................4.88
25 Saudi Arabia........................4.41
25 Chile ...................................4.86
26 Indonesia ............................4.39
26 Saudi Arabia........................4.70
27 Czech Republic ...................4.37
27 Brazil...................................4.67
28 Korea, Rep..........................4.36
28 Italy.....................................4.67
29 Philippines ..........................4.28
29 Korea, Rep..........................4.60
30 Panama...............................4.24
30 Slovak Republic ..................4.56
31 Poland.................................4.22
31 Argentina ............................4.53
32 Brazil ...................................4.19
32 Hungary ..............................4.43
33 China...................................4.12
33 Jordan.................................4.42
34 Vietnam...............................4.11
34 South Africa........................4.41
35 India ....................................4.10
35 China ..................................4.41
36 Thailand ..............................4.07
36 India....................................4.39
37 Romania .............................3.90
37 Indonesia ............................4.39
38 Nigeria ................................3.90
38 Mexico................................4.30
39 Slovak Republic ..................3.89
39 Turkey .................................4.24
40 Peru ....................................3.83
40 Morocco .............................4.23
41 Argentina ............................3.81
41 Panama...............................4.18
42 Mexico................................3.75
42 Egypt ..................................4.15
43 Turkey..................................3.74
43 Colombia.............................4.12
44 Morocco .............................3.71
44 Russian Federation .............4.09
45 Hungary ..............................3.70
45 Thailand ..............................4.08
46 Spain...................................3.69
46 Peru.....................................4.01
47 Russian Federation .............3.68
47 Kuwait.................................3.98
48 Venezuela ...........................3.67
48 Kazakhstan .........................3.97
49 Kuwait.................................3.60
49 Philippines ..........................3.95
50 Kazakhstan .........................3.59
50 Bahrain ...............................3.92
51 Colombia ............................3.57
51 Ukraine ...............................3.89
52 Jordan.................................3.55
52 Nigeria ................................3.72
53 Ukraine ...............................3.40
53 Romania .............................3.54
54 Egypt ..................................3.35
54 Pakistan ..............................3.52
55 Pakistan ..............................3.32
55 Vietnam ..............................3.42
56 Italy .....................................3.16
56 Venezuela ...........................3.04
57 Bangladesh .........................3.12
57 Bangladesh.........................3.00
SOURCE: World Economic Forum, Executive Opinion Survey
1
MEAN: 4.74
SOURCE: World Economic Forum, Executive Opinion Survey
7
3: Data Tables | Business environment
2.03
315
3: Data Tables | Business environment
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 Executive Opinion Survey: Does your country retain and attract talented people? [1 = no, the best and brightest normally leave to pursue opportunities in other countries; 7 = yes, there are many opportunities for talented people within the country]; To what extent does labor regulation in your country limit the ability to hire foreign labor? [1 = very much limits hiring foreign labor; 7 = does not limit hiring foreign labor at all] | 2009â&#x20AC;&#x201C;10 weighted average
This variable is the gross tertiary enrollment rate | 2007 or most recent available
RANK COUNTRY/ECONOMY
SCORE
1 Korea, Rep. .........................94.67 2 Finland.................................93.81 3 United States.......................81.68 4 Denmark .............................80.30
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.11
5 Ukraine5...............................79.44
7
6 Venezuela5 ...........................78.10
1 Switzerland .........................5.71
316
2 United Arab Emirates .........5.67
7 Norway................................76.24
3 Singapore ...........................5.45
8 Sweden ...............................75.18
4 United States......................5.11
9 Australia ..............................75.06
5 Hong Kong SAR..................5.05
10 Russian Federation ..............74.72
6 Ireland.................................4.99
11 Hungary...............................69.10
7 United Kingdom..................4.95
12 Spain ...................................68.91
8 Netherlands ........................4.91
13 Italy......................................68.12
9 Chile ...................................4.85
14 Argentina..............................67.13
10 Sweden ..............................4.82
15 Poland .................................66.95
11 Bahrain ...............................4.79
16 Belgium ...............................62.48
12 Saudi Arabia ........................4.76
17 Canada2 ...............................62.36
13 Norway ...............................4.74
18 Ireland..................................61.06
14 Finland ................................4.65
19 Israel ...................................60.41
15 Canada................................4.63
20 Netherlands.........................60.32
16 China ..................................4.61
21 Singapore5 ...........................59.80
17 Belgium ..............................4.59
22 United Kingdom ..................59.10
18 Denmark.............................4.58
23 Romania ..............................58.27
19 Indonesia ............................4.54
24 Japan...................................58.06
20 Kuwait.................................4.51
25 France .................................55.57
21 Malaysia..............................4.29
26 Czech Republic....................54.82
22 Germany .............................4.23
27 Austria .................................51.07
23 Korea, Rep..........................4.22
28 Slovak Republic ...................50.85
24 Australia..............................4.20
29 Chile5 ...................................49.80
25 Japan ..................................4.11
30 Thailand5 ..............................48.26
26 Thailand...............................4.10
31 Switzerland ..........................47.00
27 Peru ....................................4.08
32 Panama ...............................45.03
28 France.................................3.96
33 Germany4 ............................43.60
29 India....................................3.95
34 Kazakhstan6 .........................41.05
30 Austria ................................3.94
35 Jordan .................................39.91
31 Spain...................................3.94
36 Turkey..................................36.30
32 Czech Republic ...................3.92
37 Colombia .............................35.36
33 Brazil...................................3.92
38 Peru4 ....................................35.06
34 Argentina ............................3.89
39 Egypt3..................................34.75
35 Nigeria ................................3.88
40 Hong Kong SAR ..................33.84
36 Panama...............................3.88
41 Bahrain4 ...............................32.05
37 Hungary ..............................3.88
42 Malaysia4 .............................30.24
38 Vietnam ..............................3.84
43 Brazil ...................................29.99
39 Morocco .............................3.77
44 Saudi Arabia5 .......................29.85
40 Israel ...................................3.76
45 Philippines4..........................28.47
41 Pakistan ..............................3.65
46 Mexico ................................26.93
42 Slovak Republic ..................3.61
47 China ...................................22.89
43 Romania .............................3.61
48 United Arab Emirates5 ........22.85
44 Italy.....................................3.57
49 Kuwait4 .................................17.57
45 Colombia ............................3.50
50 Indonesia..............................17.46
46 Mexico................................3.49
51 South Africa4 .......................15.41
47 Poland.................................3.43
52 India.....................................13.48
48 Jordan.................................3.41
53 Morocco5 .............................12.29
49 Kazakhstan .........................3.39
54 Nigeria3 ................................10.15
50 Turkey .................................3.37
55 Vietnam1 ................................9.52
51 Ukraine ...............................3.34
56 Bangladesh ............................7.25
52 Philippines ..........................3.28
57 Pakistan5................................5.18
53 Russian Federation .............3.22 54 Egypt ..................................3.15
SOURCES: UNESCO Institute for Statistics (retrieved August 24, 2010);
The World Bank, World Development Indicators 2010; national sources
55 Bangladesh .........................3.09 56 South Africa........................2.99 57 Venezuela ...........................2.50 SOURCE: World Economic Forum, Executive Opinion Survey
1
2001
2
2004
3
2005
4
2006
5
2008
6
2009
2.08
Irregular payments in tax collection
Distortive effect of taxes and subsidies on competition
In your country, how common is it for firms to make undocumented extra payments or bribes connected with annual tax payments? [1 = very common; 7 = never occurs] | 2009â&#x20AC;&#x201C;10 weighted average
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 5.07
7
In your country, government subsidies and tax breaks seriously distort competition [1 = strongly agree; 7 = strongly disagree] | 2009â&#x20AC;&#x201C;10 weighted average
RANK COUNTRY/ECONOMY
SCORE
1 Sweden ..............................6.79
1 Singapore ...........................5.84
2 Singapore ...........................6.71
2 Hong Kong SAR..................5.67
3 Finland ................................6.68
3 Bahrain ...............................5.66
4 Denmark.............................6.65
4 Saudi Arabia........................5.42
5 Norway ...............................6.62
5 Chile ...................................5.41
6 Bahrain ...............................6.49
6 United Arab Emirates .........5.40
7 Hong Kong SAR..................6.47
7 Sweden...............................5.12
8 Switzerland .........................6.45
8 South Africa........................4.98
9 Canada................................6.43
9 Denmark.............................4.91
10 United Arab Emirates .........6.42
10 Kuwait.................................4.89
11 Japan ..................................6.32
11 Finland ................................4.88
12 Austria ................................6.31
12 Switzerland .........................4.82
13 Germany .............................6.31
13 Netherlands ........................4.81
14 Netherlands ........................6.22
14 Norway ...............................4.80
15 Australia ..............................6.19
15 China ..................................4.62
16 Ireland.................................6.14
16 Ireland.................................4.60
17 Chile....................................6.14
17 Australia..............................4.53
18 United Kingdom..................6.06
18 France.................................4.51
19 Saudi Arabia........................6.03
19 Peru ....................................4.50
20 France.................................6.02
20 Austria ................................4.47
21 Israel...................................6.02
21 United Kingdom..................4.44
22 Belgium ..............................5.75
22 Israel...................................4.41
23 South Africa........................5.73
23 Canada................................4.39
24 Kuwait.................................5.62
24 Egypt ..................................4.37
25 Spain...................................5.55
25 Belgium ..............................4.36
26 Poland.................................5.48
26 Indonesia ............................4.24
27 Turkey .................................5.34
27 Bangladesh .........................4.19
28 Peru ....................................5.27
28 Jordan.................................4.16
29 United States......................5.12
29 Malaysia..............................4.15
30 Slovak Republic ..................5.08
30 Japan ..................................4.15
31 Romania .............................5.07
31 Poland .................................4.10
32 Czech Republic ...................5.06
32 Czech Republic ...................4.08
33 Malaysia..............................5.01
33 Philippines ..........................4.06
34 Korea, Rep..........................4.87
34 Morocco .............................4.04
35 Hungary ..............................4.87
35 Panama...............................4.04
36 Jordan.................................4.65
36 Thailand ..............................4.04
37 Mexico................................4.56
37 India ....................................4.01
38 Panama...............................4.47
38 Pakistan ..............................3.97
39 Brazil ...................................4.19
39 Vietnam ..............................3.96
40 Egypt ..................................4.15
40 Korea, Rep..........................3.95
41 China...................................4.15
41 Brazil...................................3.92
42 Italy .....................................4.14
42 Turkey .................................3.91
43 Thailand ..............................4.12
43 Nigeria ................................3.89
44 Colombia.............................4.01
44 Italy.....................................3.82
45 India....................................3.95
45 Kazakhstan .........................3.82
46 Kazakhstan .........................3.92
46 United States .....................3.82
47 Russian Federation .............3.90
47 Mexico................................3.75
48 Argentina ............................3.66
48 Germany .............................3.71
49 Morocco .............................3.62
49 Colombia ............................3.55
50 Venezuela ...........................3.58
50 Spain...................................3.55
51 Indonesia ............................3.38
51 Russian Federation .............3.53
52 Ukraine ...............................3.24
52 Romania .............................3.53
53 Vietnam...............................3.11
53 Hungary ..............................3.50
54 Nigeria ................................3.04
54 Slovak Republic ..................3.45
55 Pakistan ..............................2.78
55 Ukraine ...............................2.89
56 Philippines ..........................2.61
56 Venezuela ...........................2.35
57 Bangladesh .........................2.28
57 Argentina ............................2.27
SOURCE: World Economic Forum, Executive Opinion Survey
1
MEAN: 4.25
SOURCE: World Economic Forum, Executive Opinion Survey
7
3: Data Tables | Business environment
2.07
317
3: Data Tables | Business environment
318
2.09
2.10
Marginal tax variation
Time to pay taxes
This is the 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 | 2010
This is the 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
SCORE
SCORE
1 China .................................–24.60
1 United Arab Emirates..........12.00
2 Czech Republic ..................–19.50
2 Bahrain ................................36.00
3 Romania ............................–18.20
3 Switzerland .........................63.00
4 Ukraine ..............................–18.10
4 Ireland .................................76.00
5 France.................................–17.30
5 Saudi Arabia ........................79.00
6 Belgium .............................–16.20
6 Hong Kong SAR ..................80.00
7 Italy....................................–15.90
7 Singapore ............................84.00
8 Bahrain ..............................–14.70
8 Norway ................................87.00
9 United Arab Emirates ........–14.10
9 Jordan ................................101.00
10 Kuwait................................–10.70
10 Australia .............................107.00
11 Sweden .............................–10.30
11 United Kingdom.................110.00
12 Saudi Arabia ........................–9.90
12 Kuwait................................118.00
13 Austria .................................–9.60
13 Canada...............................119.00
14 Brazil ....................................–7.30
14 Sweden .............................122.00
15 Germany..............................–6.20
15 France ...............................132.00
16 Egypt ...................................–5.60
16 Denmark............................135.00
17 Spain....................................–5.10
17 Malaysia ............................145.00
18 Finland.................................–3.60
18 Belgium .............................156.00
19 Turkey ..................................–3.10
19 Netherlands.......................164.00
20 Poland..................................–2.90
20 Austria................................171.00
21 Colombia .............................–0.90
21 United States.....................187.00
22 Ireland ...................................0.40
22 Philippines .........................195.00
23 Mexico...................................1.30
23 Germany............................196.00
24 Singapore ..............................3.10
24 South Africa ......................200.00
25 Argentina...............................5.60
25 Romania ............................202.00
26 Vietnam .................................5.80
26 Colombia ...........................208.00
27 Canada ...................................7.00
27 Spain .................................213.00
28 Switzerland ............................7.40
28 Turkey................................223.00
29 Morocco.................................7.80
29 Israel .................................230.00
30 Australia ................................9.00
30 Finland...............................243.00
31 Kazakhstan ..........................10.40
31 Korea, Rep. .......................250.00
32 Norway ................................12.10
32 Slovak Republic..................257.00
33 Jordan .................................12.60
33 Thailand.............................264.00
34 Chile ....................................13.20
34 Indonesia...........................266.00
35 Japan...................................13.50
35 India...................................271.00
36 India.....................................15.80
35 Kazakhstan ........................271.00
37 United Kingdom ...................17.00
37 Bangladesh .......................302.00
38 Indonesia..............................17.40
38 Chile ..................................316.00
39 Peru .....................................19.00
39 Russian Federation ...........320.00
40 Nigeria.................................20.30
40 Hungary ............................330.00
41 Israel ...................................20.70
41 Italy ...................................334.00
42 Denmark .............................22.80
42 Japan.................................355.00
43 United States ......................25.40
43 Morocco............................358.00
44 South Africa ........................25.60
44 Peru...................................380.00
n/a Bangladesh..............................n/a
45 Poland ...............................395.00
n/a Hong Kong SAR ......................n/a
46 Argentina...........................453.00
n/a Hungary...................................n/a
47 Egypt.................................480.00
n/a Korea, Rep...............................n/a
48 Panama .............................482.00
n/a Malaysia ..................................n/a
49 China .................................504.00
n/a Netherlands.............................n/a
50 Mexico ...............................517.00
n/a Pakistan...................................n/a
51 Pakistan.............................560.00
n/a Panama....................................n/a
52 Czech Republic..................613.00
n/a Philippines ...............................n/a
53 Ukraine..............................736.00
n/a Russian Federation..................n/a
54 Venezuela..........................864.00
n/a Slovak Republic .......................n/a
55 Nigeria...............................938.00
n/a Thailand ...................................n/a
56 Vietnam..........................1,050.00
n/a Venezuela ................................n/a
57 Brazil ..............................2,600.00
SOURCES: Top tax rate data from the Heritage Foundation, 2010 Index of
Economic Freedom; profit tax data from The World Bank, Doing Business 2010
SOURCE: The World Bank, Doing Business 2010
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] | 2009â&#x20AC;&#x201C;10 weighted average
New telephone lines for your business are [1 = scarce and difficult to obtain; 7 = widely available and highly reliable] | 2009â&#x20AC;&#x201C;10 weighted average
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 4.80
7
RANK COUNTRY/ECONOMY
SCORE
1 Switzerland .........................6.76
1 Norway ...............................6.97
2 Hong Kong SAR..................6.73
2 Hong Kong SAR..................6.93
3 Singapore ...........................6.62
3 Israel...................................6.91
4 France.................................6.59
4 Sweden ..............................6.87
5 Austria ................................6.42
5 Finland ................................6.86
6 Sweden ..............................6.42
6 Japan ..................................6.85
7 Finland ................................6.36
7 Switzerland .........................6.85
8 Germany .............................6.33
8 Singapore ...........................6.84
9 Denmark.............................6.32
9 Austria ................................6.81
10 United Arab Emirates .........6.20
10 Chile....................................6.76
11 Korea, Rep..........................6.02
11 Denmark.............................6.75
12 Canada................................6.00
12 France.................................6.75
13 Japan ..................................5.99
13 Canada................................6.73
14 Netherlands ........................5.92
14 Korea, Rep..........................6.69
15 Belgium ..............................5.82
15 Slovak Republic ..................6.63
16 Spain...................................5.79
16 Netherlands ........................6.63
17 United States .....................5.75
17 Hungary ..............................6.62
18 Chile ...................................5.71
18 Egypt ..................................6.58
19 Bahrain ...............................5.58
19 Jordan.................................6.57
20 Malaysia..............................5.47
20 Germany .............................6.55
21 Saudi Arabia........................5.46
21 United Arab Emirates .........6.54
22 United Kingdom..................5.26
22 Brazil...................................6.52
23 Australia..............................5.22
23 United Kingdom..................6.50
24 Jordan.................................5.22
24 Belgium ..............................6.50
25 Czech Republic ...................5.13
25 Czech Republic ...................6.45
26 Norway ...............................5.12
26 United States .....................6.45
27 Turkey .................................5.10
27 Bahrain ...............................6.42
28 Kuwait.................................4.91
28 Turkey .................................6.40
29 Thailand ..............................4.89
29 Peru ....................................6.39
30 Israel...................................4.87
30 Panama...............................6.35
31 Hungary ..............................4.79
31 India....................................6.32
32 South Africa........................4.60
32 Thailand ..............................6.30
33 Slovak Republic ..................4.37
33 Morocco .............................6.28
34 Panama...............................4.35
34 Colombia ............................6.25
35 Egypt ..................................4.30
35 Spain...................................6.16
36 Ireland.................................4.20
36 China...................................6.12
37 Ukraine ...............................4.08
37 Nigeria ................................6.08
38 Morocco .............................4.07
38 Mexico................................6.07
39 China ..................................4.07
39 Saudi Arabia........................6.06
40 Italy.....................................4.04
40 Ireland.................................6.06
41 Kazakhstan .........................3.99
41 Malaysia..............................6.02
42 Mexico................................3.90
42 Poland.................................5.96
43 Brazil...................................3.79
43 Vietnam ..............................5.96
44 Indonesia ............................3.71
44 Australia..............................5.90
45 India....................................3.64
45 Romania .............................5.73
46 Peru ....................................3.64
46 Argentina ............................5.62
47 Russian Federation .............3.61
47 Philippines ..........................5.59
48 Colombia ............................3.56
48 Ukraine ...............................5.50
49 Pakistan ..............................3.49
49 Pakistan ..............................5.48
50 Argentina ............................3.45
50 Italy.....................................5.46
51 Poland.................................3.35
51 Kuwait.................................5.37
52 Philippines ..........................3.21
52 Kazakhstan .........................5.33
53 Venezuela ...........................3.14
53 Bangladesh .........................5.04
54 Vietnam ..............................3.03
54 Indonesia ............................5.02
55 Bangladesh .........................2.74
55 Russian Federation .............4.97
56 Nigeria ................................2.42
56 South Africa........................4.47
57 Romania .............................2.36
57 Venezuela ...........................4.32
SOURCE: World Economic Forum, Executive Opinion Survey
1
MEAN: 6.19
SOURCE: World Economic Forum, Executive Opinion Survey
7
3: Data Tables | Business environment
2.11
319
3: Data Tables | Business environment
320
2.13
2.14
Internet users
Broadband Internet subscribers
This variable is Internet users per 100 inhabitants | 2008
This variable is the total broadband Internet subscribers per 100 inhabitants | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1 Sweden................................87.84
SCORE
1 Sweden................................41.19
2 Netherlands.........................86.55
2 Denmark ..............................37.12
3 Denmark .............................83.89
3 Netherlands.........................35.14
4 Finland.................................82.62
4 Switzerland..........................34.15
5 Norway................................82.55
5 Norway................................33.27
6 Switzerland ..........................77.00
6 Korea, Rep...........................32.14
7 Korea, Rep...........................76.50
7 Finland.................................30.50
8 United Kingdom ..................76.24
8 Canada ................................29.59
9 Canada ................................75.43
9 France .................................28.52
10 Japan...................................75.40
10 United Kingdom ..................28.21
11 Germany .............................75.33
11 Hong Kong SAR...................28.11
12 United States ......................74.00
12 Belgium................................27.97
13 Singapore ............................73.02
13 Germany ..............................27.47
14 Australia...............................71.98
14 Australia ..............................24.39
15 Austria .................................71.21
15 Israel ...................................23.88
16 Belgium ...............................68.86
16 Japan...................................23.65
17 France .................................68.21
17 United States ......................23.46
18 Hong Kong SAR...................67.00
18 Singapore .............................21.74
19 Slovak Republic ...................66.05
19 Austria .................................20.74
20 United Arab Emirates ..........65.15
20 Spain ...................................20.22
21 Ireland .................................62.54
21 Ireland .................................20.09
22 Hungary ..............................58.66
22 Italy .....................................18.93
23 Czech Republic....................58.41
23 Hungary ...............................17.48
24 Spain....................................56.74
24 Czech Republic.....................17.05
25 Malaysia ..............................55.80
25 Bahrain ................................14.18
26 Bahrain.................................51.95
26 Poland..................................12.58
27 Israel ...................................49.64
27 United Arab Emirates ..........12.43
28 Poland .................................49.02
28 Romania ...............................11.73
29 Italy......................................41.93
29 Slovak Republic....................11.20
30 Colombia .............................38.50
30 Chile ......................................8.49
31 Brazil ....................................37.52
31 Argentina ...............................7.99
32 Turkey..................................34.37
32 Turkey.....................................7.78
33 Kuwait .................................34.26
33 Mexico ...................................7.00
34 Morocco..............................33.04
34 Russian Federation................6.56
35 Chile ....................................32.47
35 China .....................................6.23
36 Russian Federation .............32.00
36 Panama..................................5.76
37 Saudi Arabia ........................30.80
37 Brazil .....................................5.26
38 Romania ..............................29.00
38 Malaysia ................................4.93
39 Argentina .............................28.11
39 Venezuela ..............................4.73
40 Panama ................................27.49
40 Kazakhstan ............................4.26
41 Jordan .................................26.00
41 Colombia ...............................4.23
42 Venezuela ............................25.49
42 Saudi Arabia ..........................4.16
43 Peru .....................................24.72
43 Ukraine..................................3.48
44 Vietnam ...............................23.92
44 Peru .......................................2.52
45 Thailand ...............................23.89
45 Vietnam .................................2.35
46 China ...................................22.28
46 Jordan ...................................2.24
47 Mexico.................................21.71
47 Morocco ................................1.53
48 Egypt ...................................16.65
48 Thailand .................................1.41
49 Nigeria .................................15.86
49 Kuwait....................................1.37
50 Kazakhstan...........................11.00
50 Philippines .............................1.16
51 Ukraine ................................10.60
51 Egypt.....................................0.94
52 Pakistan ...............................10.45
52 South Africa ..........................0.86
53 South Africa ..........................8.43
53 India ......................................0.45
54 Indonesia ...............................7.92
54 Indonesia...............................0.18
55 Philippines.............................6.22
55 Pakistan.................................0.09
56 India ......................................4.38
56 Nigeria...................................0.04
57 Bangladesh ...........................0.35
57 Bangladesh ...........................0.03
SOURCES: International Telecommunication Union, World
SOURCES: International Telecommunication Union, World
Telecommunication Indicators 2009; national sources
Telecommunication Indicators 2009; national sources
2.16
Telephone lines
Mobile telephone subscribers
This variable is the number of main telephone lines per 100 inhabitants | 2008
This indicator is the number of mobile cellular telephone subscribers per 100 inhabitants | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
SCORE
1 Switzerland ..........................64.11
1 Turkey................................208.65
2 Germany .............................62.48
2 Bahrain ..............................185.77
3 Hong Kong SAR ..................58.72
3 Hong Kong SAR ................165.85
4 Sweden................................57.83
4 Italy ....................................151.57
5 France .................................56.42
5 Romania ............................142.85
6 Canada ................................54.87
6 Poland ................................141.11
7 United Kingdom ..................54.24
7 Russian Federation ............138.15
8 Ireland .................................49.66
8 Czech Republic..................133.54
9 United States ......................49.62
9 Austria ...............................129.73
10 Israel ...................................45.72
10 Finland ...............................128.76
11 Denmark .............................45.64
11 Germany............................128.27
12 Spain ...................................45.41
12 Israel ..................................127.38
13 Australia ..............................44.46
13 Ukraine ..............................126.34
14 Korea, Rep. .........................44.29
14 Denmark............................125.72
15 Netherlands.........................44.27
15 Morocco ............................124.80
16 Belgium ...............................42.08
16 Hungary.............................122.09
17 Singapore ............................40.24
17 Thailand..............................121.09
18 Norway................................39.78
18 Ireland................................120.74
19 Austria .................................39.40
19 South Africa .......................118.33
20 Japan...................................38.04
20 Spain...................................117.97
21 Italy .....................................35.65
21 Argentina ...........................116.61
22 Vietnam ...............................33.98
22 Philippines .........................115.28
23 United Arab Emirates..........33.63
23 Pakistan .............................115.19
24 Russian Federation ..............31.75
24 Vietnam .............................114.54
25 Finland..................................31.11
25 Slovak Republic ..................111.67
26 Hungary ..............................30.90
26 Belgium ..............................111.63
27 Ukraine................................28.65
27 Nigeria................................110.16
28 Bahrain ................................28.42
28 Australia.............................104.96
29 Poland .................................25.49
29 Malaysia ............................102.59
30 China ...................................25.48
30 Saudi Arabia ......................102.23
31 Argentina.............................24.43
31 Kuwait .................................99.59
32 Turkey..................................23.68
32 United Kingdom ..................96.31
33 Romania ..............................23.58
33 Kazakhstan ..........................96.06
34 Venezuela ............................22.42
34 Korea, Rep. .........................94.71
35 Kazakhstan ..........................22.28
35 France .................................93.45
36 Czech Republic ....................21.94
36 Sweden ...............................92.01
37 Brazil ....................................21.43
37 Colombia .............................91.90
38 Chile ....................................20.99
38 Singapore ............................90.60
39 Slovak Republic ...................20.33
39 Switzerland..........................89.05
40 Mexico ................................19.04
40 Chile ....................................88.05
41 Kuwait .................................18.53
41 United Arab Emirates..........86.79
42 Colombia ..............................17.89
42 Japan...................................86.73
43 Saudi Arabia ........................16.27
43 Jordan .................................86.60
44 Malaysia ..............................15.89
44 United States ......................80.37
45 Panama ...............................15.42
45 Brazil ...................................78.47
46 Egypt ...................................14.64
46 Peru .....................................75.39
47 Indonesia.............................13.36
47 Panama ...............................72.66
48 Thailand ...............................10.42
48 Venezuela ............................72.19
49 Peru .......................................9.98
49 Mexico ................................69.37
50 Morocco................................9.46
50 Canada ................................66.42
51 South Africa ..........................8.91
51 Indonesia .............................61.83
52 Jordan ...................................8.46
52 Egypt...................................50.62
53 Philippines.............................4.51
53 Norway ................................49.74
54 India ......................................3.21
54 China....................................47.95
55 Pakistan.................................2.50
55 Netherlands .........................41.66
56 Nigeria...................................0.86
56 India ....................................29.36
57 Bangladesh ...........................0.84
57 Bangladesh ..........................27.90
SOURCES: International Telecommunication Union, World
SOURCES: International Telecommunication Union, World
Telecommunication Indicators 2009; national sources
Telecommunication Indicators 2009; national sources
3: Data Tables | Business environment
2.15
321
3: Data Tables | Business environment
322
2.17
2.18
Cost of starting a business
Cost of registering property
This indicator is the cost of starting a business as a percentage of income per capita | 2009
This variable is the cost of registering property as a percentage of income per capita | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1 Denmark ...............................0.00
SCORE
1 Saudi Arabia ..........................0.00
2 Ireland ...................................0.30
2 Kazakhstan ............................0.10
3 Canada ..................................0.40
2 Russian Federation................0.10
4 Bahrain ..................................0.50
2 Slovak Republic .....................0.10
5 Sweden .................................0.60
5 Switzerland............................0.40
6 Singapore ..............................0.70
6 Kuwait ...................................0.50
6 United Kingdom ....................0.70
6 Poland ...................................0.50
6 United States ........................0.70
6 United States ........................0.50
9 Australia ................................0.80
9 Denmark ...............................0.60
10 Finland...................................0.90
10 Bahrain ..................................0.90
10 France ...................................0.90
10 Egypt.....................................0.90
12 Kuwait....................................1.00
12 Thailand..................................1.10
13 Hong Kong SAR.....................1.80
12 Vietnam..................................1.10
14 Norway ..................................1.90
14 Chile ......................................1.30
15 Slovak Republic.....................2.00
14 Romania.................................1.30
15 Switzerland ...........................2.00
16 Canada...................................1.80
17 Russian Federation................2.70
17 Colombia ...............................2.00
18 Romania ................................2.90
17 United Arab Emirates............2.00
19 Israel .....................................4.20
19 Venezuela ..............................2.20
20 Germany ...............................4.70
20 Panama .................................2.40
21 Kazakhstan ............................4.80
21 Norway..................................2.50
22 China .....................................4.90
22 Malaysia ................................2.60
23 Austria ...................................5.10
22 Ukraine..................................2.60
24 Belgium .................................5.30
24 Brazil .....................................2.70
25 Netherlands...........................5.60
25 Singapore ..............................2.80
26 Pakistan.................................5.80
26 Czech Republic......................3.00
26 Ukraine..................................5.80
26 Sweden .................................3.00
28 South Africa ..........................5.90
26 Turkey....................................3.00
29 United Arab Emirates............6.20
29 China .....................................3.10
30 Thailand .................................6.30
30 Peru .......................................3.30
31 Brazil .....................................6.90
31 Finland ...................................4.10
31 Chile ......................................6.90
31 United Kingdom ....................4.10
33 Japan .....................................7.50
33 Philippines.............................4.30
34 Saudi Arabia ...........................7.70
34 Austria ...................................4.50
35 Hungary ................................8.00
35 Italy .......................................4.60
36 Czech Republic......................9.20
36 Australia ................................4.90
37 Panama................................10.30
36 Morocco................................4.90
38 Argentina .............................11.00
38 Hong Kong SAR ....................5.00
39 Mexico .................................11.70
38 Israel .....................................5.00
40 Malaysia ...............................11.90
38 Japan.....................................5.00
41 Colombia .............................12.80
41 Korea, Rep.............................5.10
42 Vietnam ...............................13.30
42 Germany ...............................5.20
43 Turkey ..................................14.20
42 Mexico ..................................5.20
44 Korea, Rep...........................14.70
44 France....................................6.10
45 Spain ...................................15.00
45 Netherlands...........................6.20
46 Egypt ...................................16.10
46 Ireland ...................................6.70
46 Morocco ..............................16.10
47 Argentina ...............................7.00
48 Italy ......................................17.90
48 Pakistan .................................7.20
48 Poland ..................................17.90
48 Spain ......................................7.20
50 Venezuela............................24.00
50 India .......................................7.40
51 Peru .....................................24.50
51 Jordan ....................................7.50
52 Indonesia.............................26.00
52 South Africa ..........................8.70
53 Philippines...........................28.20
53 Bangladesh..........................10.20
54 Bangladesh .........................36.20
54 Indonesia.............................10.70
55 Jordan .................................49.50
55 Hungary ...............................11.00
56 India.....................................66.10
56 Belgium ...............................12.70
57 Nigeria .................................76.70
57 Nigeria.................................20.90
SOURCE: The World Bank, Doing Business 2010
SOURCE: The World Bank, Doing Business 2010
2.20
Cost of closing a business
Time to start a business
This variable is the cost of closing a business as a percentage of the estate | 2009
This variable is the time in days to start a business | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1 Colombia ...............................1.00
SCORE
1 Australia ................................2.00
1 Kuwait....................................1.00
2 Singapore ..............................3.00
1 Norway ..................................1.00
3 Belgium.................................4.00
1 Singapore ..............................1.00
3 Hungary ................................4.00
5 Belgium.................................4.00
5 Canada ..................................5.00
5 Canada ..................................4.00
5 Saudi Arabia ..........................5.00
5 Denmark ...............................4.00
7 Denmark ...............................6.00
5 Finland...................................4.00
7 Hong Kong SAR ....................6.00
5 Japan.....................................4.00
7 Turkey....................................6.00
5 Korea, Rep. ...........................4.00
7 United States ........................6.00
5 Netherlands...........................4.00
11 Egypt .....................................7.00
5 Pakistan.................................4.00
11 France ....................................7.00
5 Switzerland ...........................4.00
11 Norway ..................................7.00
14 United Kingdom ....................6.00
14 Bahrain ..................................9.00
15 Peru........................................7.00
15 Italy......................................10.00
15 United States.........................7.00
15 Netherlands.........................10.00
17 Australia ................................8.00
15 Romania ..............................10.00
17 Bangladesh ...........................8.00
18 Malaysia ...............................11.00
17 Germany ...............................8.00
19 Morocco ..............................12.00
20 France ...................................9.00
19 Panama ...............................12.00
20 Hong Kong SAR ....................9.00
21 Ireland .................................13.00
20 India ......................................9.00
21 Jordan .................................13.00
20 Ireland ...................................9.00
21 Mexico ................................13.00
20 Jordan ...................................9.00
21 United Kingdom ..................13.00
20 Russian Federation ...............9.00
25 Finland.................................14.00
20 Sweden .................................9.00
25 Korea, Rep...........................14.00
27 Bahrain ................................10.00
27 Czech Republic....................15.00
28 Romania ...............................11.00
27 Sweden ...............................15.00
29 Argentina.............................12.00
27 United Arab Emirates..........15.00
29 Brazil....................................12.00
30 Slovak Republic ...................16.00
31 Chile ....................................15.00
31 Germany..............................18.00
31 Czech Republic....................15.00
32 Colombia .............................20.00
31 Hungary...............................15.00
32 Kazakhstan..........................20.00
31 Kazakhstan ..........................15.00
32 Pakistan...............................20.00
31 Malaysia ..............................15.00
32 Switzerland .........................20.00
31 Spain ...................................15.00
36 South Africa ........................22.00
31 Turkey..................................15.00
37 Japan...................................23.00
31 Vietnam ...............................15.00
38 Argentina .............................27.00
39 Austria .................................18.00
38 Chile.....................................27.00
39 Indonesia.............................18.00
38 Ukraine ................................27.00
39 Mexico ................................18.00
41 Austria.................................28.00
39 Morocco..............................18.00
42 India ....................................30.00
39 Panama ...............................18.00
42 Russian Federation .............30.00
39 Slovak Republic ...................18.00
44 Nigeria .................................31.00
39 South Africa ........................18.00
45 Poland .................................32.00
46 Poland .................................20.00
45 Thailand...............................32.00
47 China ...................................22.00
47 Israel ...................................34.00
47 Egypt...................................22.00
48 Kuwait .................................35.00
47 Italy .....................................22.00
49 China....................................37.00
47 Nigeria.................................22.00
50 Peru .....................................41.00
47 Saudi Arabia ........................22.00
51 Bangladesh .........................44.00
52 Israel ...................................23.00
52 Spain ....................................47.00
53 United Arab Emirates..........30.00
53 Vietnam...............................50.00
54 Thailand...............................36.00
54 Philippines...........................52.00
55 Philippines...........................38.00
55 Indonesia.............................60.00
55 Venezuela............................38.00
56 Brazil..................................120.00
57 Ukraine................................42.00
57 Venezuela ..........................141.00
SOURCE: The World Bank, Doing Business 2010
SOURCE: The World Bank, Doing Business 2010
3: Data Tables | Business environment
2.19
323
3: Data Tables | Business environment
324
2.21
2.22
Time to register property
Time to close a business
This variable is the time in days to register property | 2009
This variable is the time in years to close a business | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1 Saudi Arabia ..........................2.00
SCORE
1 Ireland ...................................0.40
1 Thailand.................................2.00
2 Japan.....................................0.60
1 United Arab Emirates............2.00
3 Canada ..................................0.80
4 Norway .................................3.00
3 Singapore ..............................0.80
5 Australia ................................5.00
5 Belgium .................................0.90
5 Netherlands...........................5.00
5 Finland...................................0.90
5 Singapore ..............................5.00
5 Norway..................................0.90
8 Turkey....................................6.00
8 Australia.................................1.00
9 United Kingdom ....................8.00
8 Spain......................................1.00
10 Korea, Rep. ..........................11.00
8 United Kingdom.....................1.00
11 United States ......................12.00
11 Austria....................................1.10
12 Finland.................................14.00
11 Denmark ................................1.10
12 Japan...................................14.00
11 Hong Kong SAR .....................1.10
12 Peru .....................................14.00
11 Netherlands ...........................1.10
15 Sweden ...............................15.00
15 Germany ................................1.20
16 Switzerland..........................16.00
16 Kazakhstan ............................1.50
17 Canada .................................17.00
16 Korea, Rep. ............................1.50
17 Hungary ...............................17.00
16 Saudi Arabia...........................1.50
17 Slovak Republic....................17.00
16 United States.........................1.50
20 Spain ...................................18.00
20 China .....................................1.70
21 Colombia .............................20.00
21 Italy........................................1.80
22 Jordan..................................21.00
21 Mexico...................................1.80
23 Indonesia.............................22.00
21 Morocco ................................1.80
24 South Africa ........................24.00
24 France ....................................1.90
25 Italy ......................................27.00
25 Hungary ................................2.00
26 China ...................................29.00
25 Nigeria...................................2.00
27 Bahrain ................................31.00
25 South Africa ..........................2.00
27 Chile ....................................31.00
25 Sweden .................................2.00
29 Austria.................................32.00
29 Malaysia ................................2.30
29 Panama ...............................32.00
30 Bahrain ..................................2.50
31 Philippines...........................33.00
30 Panama .................................2.50
32 Ireland .................................38.00
32 Thailand .................................2.70
33 Germany .............................40.00
33 Argentina...............................2.80
33 Kazakhstan..........................40.00
33 Pakistan.................................2.80
35 Brazil ...................................42.00
35 Ukraine..................................2.90
35 Denmark .............................42.00
36 Colombia ...............................3.00
37 Russian Federation .............43.00
36 Poland ...................................3.00
38 India ....................................44.00
36 Switzerland ...........................3.00
39 Hong Kong SAR ..................45.00
39 Peru .......................................3.10
40 Morocco ..............................47.00
40 Romania ................................3.30
40 Venezuela.............................47.00
40 Turkey....................................3.30
42 Romania ..............................48.00
42 Russian Federation................3.80
43 Pakistan...............................50.00
43 Bangladesh ...........................4.00
44 Argentina.............................52.00
43 Brazil .....................................4.00
45 Kuwait .................................55.00
43 Israel .....................................4.00
46 Vietnam................................57.00
43 Slovak Republic.....................4.00
47 Egypt...................................72.00
43 Venezuela..............................4.00
48 Mexico.................................74.00
48 Egypt.....................................4.20
49 Czech Republic....................78.00
48 Kuwait ...................................4.20
50 Belgium...............................79.00
50 Jordan ...................................4.30
51 Nigeria.................................82.00
51 Chile ......................................4.50
52 Ukraine................................93.00
52 Vietnam.................................5.00
53 France .................................98.00
53 United Arab Emirates ............5.10
54 Israel..................................144.00
54 Indonesia...............................5.50
54 Malaysia ............................144.00
55 Philippines.............................5.70
56 Poland ................................197.00
56 Czech Republic......................6.50
57 Bangladesh .......................245.00
57 India .......................................7.00
SOURCE: The World Bank, Doing Business 2010
SOURCE: The World Bank, Doing Business 2010
Data Tables
Section III Financial stability
3: Data Tables | Financial stability
326
3.01
3.02
Change in real effective exchange rate (REER)
External vulnerability indicator
This is the average percentage change in real effective exchange rate from year to year over the period 2005–09. Higher REER represents appreciation | As of 2009
The external vulnerability indicator is the sum of several measures of external exposure as a percentage of foreign exchange reserves | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
SCORE
1 Venezuela ............................14.54
1 Saudi Arabia ...........................7.00
2 Indonesia..............................11.62
2 China ...................................12.40
3 Brazil .....................................9.90
3 Egypt ...................................15.20
4 Malaysia ................................9.14
4 Peru .....................................22.40
5 Romania ................................6.88
5 Bangladesh .........................22.70
6 Russian Federation................5.58
6 Brazil ...................................22.80
7 Philippines.............................5.38
7 Morocco...............................27.80
8 Egypt.....................................5.36
8 Malaysia ..............................29.60
9 Chile ......................................4.76
9 Panama................................30.10
10 Czech Republic......................4.32
10 Philippines...........................30.30
11 Slovak Republic .....................3.88
11 Thailand ...............................31.90
12 Norway..................................3.32
12 Pakistan...............................33.70
13 China .....................................3.24
13 Russian Federation..............33.90
14 Israel .....................................2.84
14 Mexico ................................40.00
15 Colombia ...............................2.76
15 India.....................................40.10
16 Belgium .................................2.50
16 Colombia .............................43.60
16 Thailand .................................2.50
17 Vietnam................................47.40
18 Singapore ..............................2.28
18 Indonesia.............................54.30
18 Spain .....................................2.28
19 Korea, Rep. .........................66.80
20 Kuwait ...................................2.18
20 Romania ..............................68.10
21 Ukraine ..................................1.90
21 Israel ...................................68.60
22 Ireland....................................1.88
22 South Africa .........................74.50
23 Poland ....................................1.74
23 Czech Republic ....................76.20
24 Australia.................................1.54
24 Jordan..................................81.20
25 Peru........................................1.18
25 Kuwait .................................83.50
26 Saudi Arabia...........................1.18
26 Argentina...........................100.20
27 France ....................................1.04
27 Venezuela ..........................106.60
28 Panama .................................0.88
28 Chile...................................115.20
29 Pakistan.................................0.72
29 Kazakhstan ........................126.80
30 Netherlands...........................0.66
30 Poland................................130.50
31 Italy .......................................0.64
31 Ukraine ..............................138.80
32 Morocco................................0.62
32 Turkey ................................154.50
33 Denmark ...............................0.60
33 Hungary .............................201.40
33 Finland...................................0.60
34 United Arab Emirates ........257.70
35 Japan.....................................0.50
35 Bahrain ..............................775.20
36 Austria ...................................0.44
n/a Australia ..................................n/a
37 Germany ...............................0.40
n/a Austria .....................................n/a
38 Hungary ................................0.08
n/a Belgium ...................................n/a
39 Turkey....................................0.00
n/a Canada ....................................n/a
40 India.....................................–0.36
n/a Denmark..................................n/a
41 Switzerland..........................–0.42
n/a Finland.....................................n/a
42 United States ......................–0.66
n/a France......................................n/a
43 Mexico .................................–1.18
n/a Germany..................................n/a
44 Sweden................................–1.46
n/a Hong Kong SAR ......................n/a
45 Argentina .............................–1.58
n/a Ireland .....................................n/a
46 Canada .................................–1.74
n/a Italy..........................................n/a
47 South Africa .........................–1.76
n/a Japan .......................................n/a
48 Hong Kong SAR ..................–2.02
n/a Netherlands.............................n/a
49 Korea, Rep...........................–3.18
n/a Nigeria .....................................n/a
50 Bahrain ................................–3.34
n/a Norway....................................n/a
51 United Kingdom ..................–4.48
n/a Singapore ................................n/a
n/a Bangladesh..............................n/a
n/a Slovak Republic .......................n/a
n/a Jordan .....................................n/a
n/a Spain .......................................n/a
n/a Kazakhstan ..............................n/a
n/a Sweden ...................................n/a
n/a Nigeria .....................................n/a
n/a Switzerland..............................n/a
n/a United Arab Emirates ..............n/a
n/a United Kingdom ......................n/a
n/a Vietnam ...................................n/a
n/a United States ..........................n/a
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
3.04
Current account balance to GDP
Dollarization vulnerability indicator
This variable is the three-year average of current account balance to GDP and provides an indicator of the difficulty a country might have in mobilizing the foreign exchange necessary for debt service | 2007–09
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 | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1 Kuwait ..................................37.10
SCORE
1 Australia ................................0.00
2 Singapore ............................21.97
1 Austria...................................0.00
3 Saudi Arabia ........................19.22
1 Belgium.................................0.00
4 Nigeria .................................16.93
1 Brazil .....................................0.00
5 Malaysia ..............................16.65
1 Canada ..................................0.00
6 Norway................................15.50
1 Colombia ...............................0.00
7 Hong Kong SAR ..................12.35
1 Denmark ...............................0.00
8 Bahrain.................................10.16
1 Finland...................................0.00
9 China .....................................8.73
1 France ...................................0.00
10 Venezuela...............................7.86
1 Germany ...............................0.00
11 Sweden..................................7.59
1 Hong Kong SAR ....................0.00
12 Switzerland ............................7.04
1 Ireland ...................................0.00
13 Germany ...............................6.37
1 Italy .......................................0.00
14 Netherlands...........................6.23
1 Japan.....................................0.00
15 Russian Federation................5.33
1 Netherlands...........................0.00
16 United Arab Emirates............4.95
1 Norway .................................0.00
17 Thailand .................................4.88
1 Singapore ..............................0.00
18 Philippines .............................4.14
1 Slovak Republic.....................0.00
19 Japan.....................................3.61
1 Spain .....................................0.00
20 Finland...................................2.87
1 Sweden .................................0.00
21 Austria ...................................2.66
1 Switzerland ...........................0.00
22 Denmark ...............................2.55
1 United Kingdom ....................0.00
23 Israel .....................................2.43
1 United States ........................0.00
24 Argentina...............................2.19
24 Venezuela ..............................0.60
25 Bangladesh ............................1.97
25 Thailand .................................2.50
26 Korea, Rep. ............................1.69
26 Morocco................................3.60
27 Chile ......................................1.68
27 India ......................................4.30
28 Indonesia ...............................1.47
28 Mexico .................................11.40
29 Egypt.....................................0.03
29 Indonesia .............................15.10
30 Belgium ...............................–0.21
30 Hungary ..............................25.20
31 Canada ................................–0.39
31 Argentina.............................25.80
32 Peru .....................................–0.79
32 Russian Federation..............33.50
33 Mexico ................................–0.96
33 Jordan .................................34.30
34 Brazil ....................................–1.05
34 Pakistan ...............................37.80
35 France ..................................–1.57
35 Philippines...........................39.90
36 India .....................................–1.78
36 Kazakhstan ..........................43.20
37 United Kingdom...................–1.84
37 Romania ..............................49.10
38 Kazakhstan ..........................–2.14
38 Peru .....................................50.80
39 Czech Republic....................–2.41
39 Ukraine................................56.80
40 Colombia .............................–2.50
40 Egypt...................................62.00
41 Italy......................................–3.07
41 Turkey..................................85.90
42 Morocco ..............................–3.45
42 Vietnam .............................104.50
43 Poland..................................–3.83
n/a Bahrain ....................................n/a
44 Ukraine ................................–4.14
n/a Bangladesh..............................n/a
45 United States ......................–4.33
n/a Chile ........................................n/a
46 Ireland .................................–4.49
n/a China .......................................n/a
47 Hungary...............................–4.53
n/a Czech Republic........................n/a
48 Turkey ..................................–4.57
n/a Israel........................................n/a
49 Australia ..............................–4.86
n/a Korea, Rep...............................n/a
50 Slovak Republic ...................–5.00
n/a Kuwait .....................................n/a
51 South Africa.........................–6.08
n/a Malaysia ..................................n/a
52 Pakistan...............................–6.28
n/a Nigeria .....................................n/a
53 Panama................................–6.29
n/a Panama....................................n/a
54 Spain ...................................–8.22
n/a Poland......................................n/a
55 Vietnam ...............................–9.84
n/a Saudi Arabia ............................n/a
56 Romania.............................–10.01
n/a South Africa.............................n/a
57 Jordan.................................–11.15
n/a United Arab Emirates ..............n/a
SOURCE: IMF, World Economic Outlook Database (April 2010)
3: Data Tables | Financial stability
3.03
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
327
3: Data Tables | Financial stability
328
3.05
3.06
External debt to GDP (developing economies)
Net international investment position to GDP (advanced economies)
This variable is the external debt as a percentage of GDP | 2009
This variable is the net international investment position as a percentage of GDP | 2009
RANK COUNTRY/ECONOMY
SCORE
RANK COUNTRY/ECONOMY
SCORE
1 China .....................................9.40
1 Hong Kong SAR ................353.10
2 Brazil....................................15.40
2 Switzerland ........................131.90
3 Egypt ...................................16.80
3 Japan...................................55.30
4 India.....................................19.70
4 Germany ..............................27.70
5 Kuwait .................................20.70
5 Netherlands.........................18.60
6 Mexico.................................22.10
6 Finland.................................–6.70
7 Saudi Arabia ........................22.50
7 Canada .................................–7.80
8 Venezuela ............................22.70
8 Denmark..............................–8.40
9 Colombia .............................23.20
9 United Kingdom.................–13.10
10 South Africa ........................24.40
10 Austria ...............................–15.50
11 Thailand ...............................25.70
11 Italy....................................–19.20
12 Bangladesh .........................25.80
12 Sweden .............................–19.30
13 Morocco..............................26.80
12 United States ....................–19.30
14 Peru .....................................28.10
14 Slovak Republic ..................–57.60
15 Pakistan ...............................31.50
15 Australia .............................–61.20
16 Indonesia.............................32.40
16 Ireland ...............................–64.90
17 Malaysia ..............................34.90
17 Spain .................................–93.60
18 Korea, Rep. .........................36.50
n/a Argentina.................................n/a
18 Vietnam ...............................36.50
n/a Bahrain ....................................n/a
20 Argentina.............................38.20
n/a Bangladesh..............................n/a
21 Russian Federation..............38.30
n/a Belgium ...................................n/a
22 Philippines...........................39.40
n/a Brazil........................................n/a
23 Turkey ..................................45.10
n/a Chile ........................................n/a
24 Chile ....................................45.30
n/a China .......................................n/a
25 Czech Republic....................45.50
n/a Colombia .................................n/a
26 Israel ...................................46.60
n/a Czech Republic........................n/a
27 Panama................................49.10
n/a Egypt .......................................n/a
28 Poland .................................58.70
n/a France......................................n/a
29 United Arab Emirates ..........61.80
n/a Hungary...................................n/a
30 Jordan..................................63.10
n/a India.........................................n/a
31 Romania ..............................68.10
n/a Indonesia.................................n/a
32 Ukraine................................88.60
n/a Israel........................................n/a
33 Kazakhstan ..........................94.70
n/a Jordan .....................................n/a
34 Hungary.............................139.40
n/a Kazakhstan ..............................n/a
35 Bahrain ..............................169.60
n/a Korea, Rep...............................n/a
n/a Australia ..................................n/a
n/a Kuwait .....................................n/a
n/a Austria .....................................n/a
n/a Malaysia ..................................n/a
n/a Belgium ...................................n/a
n/a Mexico ....................................n/a
n/a Canada ....................................n/a
n/a Morocco ..................................n/a
n/a Denmark..................................n/a
n/a Nigeria .....................................n/a
n/a Finland.....................................n/a
n/a Norway....................................n/a
n/a France......................................n/a
n/a Pakistan...................................n/a
n/a Germany..................................n/a
n/a Panama....................................n/a
n/a Hong Kong SAR ......................n/a
n/a Peru .........................................n/a
n/a Ireland .....................................n/a
n/a Philippines ...............................n/a
n/a Italy..........................................n/a
n/a Poland......................................n/a
n/a Japan .......................................n/a
n/a Romania ..................................n/a
n/a Netherlands.............................n/a
n/a Russian Federation..................n/a
n/a Nigeria .....................................n/a
n/a Saudi Arabia ............................n/a
n/a Norway....................................n/a
n/a Singapore ................................n/a
n/a Singapore ................................n/a
n/a South Africa.............................n/a
n/a Slovak Republic .......................n/a
n/a Thailand ...................................n/a
n/a Spain .......................................n/a
n/a Turkey ......................................n/a
n/a Sweden ...................................n/a
n/a Ukraine ....................................n/a
n/a Switzerland..............................n/a
n/a United Arab Emirates ..............n/a
n/a United Kingdom ......................n/a
n/a Venezuela ................................n/a
n/a United States ..........................n/a
n/a Vietnam ...................................n/a
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
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 2010. Recent crises are weighted more heavily | As of 2010
This is the weighted average financial strength rating by bank assets | 2010
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1 Australia ................................0.00
SCORE
1 Australia ................................9.00
1 Bahrain ..................................0.00
1 Canada ..................................9.00
1 Canada ..................................0.00
1 Hong Kong SAR ....................9.00
1 Hong Kong SAR ....................0.00
1 Singapore ..............................9.00
1 Italy .......................................0.00
5 Finland...................................8.00
1 Pakistan.................................0.00
6 Chile.......................................7.00
1 Saudi Arabia ..........................0.00
6 France ....................................7.00
1 Singapore ..............................0.00
6 Switzerland ............................7.00
1 South Africa ..........................0.00
6 United States.........................7.00
1 United Arab Emirates............0.00
10 Belgium.................................6.00
11 Egypt.....................................0.50
10 Brazil .....................................6.00
11 Israel .....................................0.50
10 Czech Republic......................6.00
11 Morocco................................0.50
10 Denmark ...............................6.00
14 Kuwait ...................................0.75
10 Italy .......................................6.00
14 Peru .......................................0.75
10 Jordan ...................................6.00
16 Bangladesh ............................1.00
10 Mexico ..................................6.00
16 Jordan....................................1.00
10 Netherlands...........................6.00
16 Panama..................................1.00
10 Norway .................................6.00
16 Romania ................................1.00
10 Saudi Arabia ..........................6.00
20 Chile ......................................1.25
10 Spain .....................................6.00
20 Finland ...................................1.25
10 Sweden .................................6.00
20 India .......................................1.25
22 Bahrain ..................................5.00
20 Nigeria ...................................1.25
22 Germany ...............................5.00
20 Norway ..................................1.25
22 Israel .....................................5.00
20 Poland ....................................1.25
22 Japan.....................................5.00
20 Venezuela ..............................1.25
22 Korea, Rep. ...........................5.00
27 China .....................................1.50
22 Kuwait ...................................5.00
27 Czech Republic ......................1.50
22 Malaysia ................................5.00
27 Indonesia ...............................1.50
22 South Africa ..........................5.00
27 Japan .....................................1.50
22 Turkey....................................5.00
27 Korea, Rep. ............................1.50
22 United Kingdom ....................5.00
27 Malaysia.................................1.50
32 Austria...................................4.00
27 Slovak Republic .....................1.50
32 Colombia ...............................4.00
27 Vietnam .................................1.50
32 Hungary ................................4.00
35 Austria...................................2.00
32 India ......................................4.00
35 Belgium.................................2.00
32 Morocco................................4.00
35 Denmark ...............................2.00
32 Peru.......................................4.00
35 France ...................................2.00
32 Poland ...................................4.00
35 Germany ...............................2.00
32 Slovak Republic.....................4.00
35 Ireland ...................................2.00
32 United Arab Emirates............4.00
35 Kazakhstan............................2.00
41 Argentina...............................3.00
35 Mexico ..................................2.00
41 Egypt.....................................3.00
35 Netherlands...........................2.00
41 Indonesia...............................3.00
35 Switzerland ...........................2.00
41 Panama .................................3.00
35 United Kingdom ....................2.00
41 Philippines.............................3.00
46 Brazil .....................................2.25
41 Romania ................................3.00
46 Colombia ...............................2.25
41 Thailand.................................3.00
46 Philippines.............................2.25
48 China .....................................2.00
46 Thailand .................................2.25
48 Ireland ...................................2.00
46 Turkey....................................2.25
48 Pakistan.................................2.00
51 Spain .....................................2.50
48 Russian Federation ...............2.00
52 United States ........................3.00
48 Vietnam.................................2.00
53 Hungary ................................3.25
53 Kazakhstan ............................1.00
53 Sweden .................................3.25
53 Ukraine ..................................1.00
55 Russian Federation................3.50
53 Venezuela ..............................1.00
55 Ukraine..................................3.50
n/a Bangladesh..............................n/a
57 Argentina...............................4.50
n/a Nigeria .....................................n/a
SOURCE: Luc Laeven and Fabian Valencia. 2008. “Systemic Banking
Crises: A New Database.” IMF Working Paper 08/224, Washington, DC: IMF. Updated June 2010. All weighting is based on World Economic Forum analysis
3: Data Tables | Financial stability
3.07
SOURCE: Moody’s Country Credit Statistical Handbook (May 2010)
329
3: Data Tables | Financial stability
3.09
3.10
Aggregate measure of real estate bubbles
Financial Stress Index
This is the aggregate measure of real estate bubbles based on price-to-income ratio and price-to-rent ratio | 2009
This measures the extent to which a country’s financial system is under strain | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1 Ireland ...................................6.84
330
SCORE
1 Thailand ...............................–0.19
2 Peru .......................................6.71
2 Turkey ..................................–0.07
3 Panama .................................6.68
3 China .....................................0.09
4 Malaysia ................................6.66
4 Philippines.............................0.35
5 Chile ......................................6.57
5 Morocco................................0.44
6 Hungary ................................6.56
6 Finland...................................0.48
7 Mexico ..................................6.33
7 Malaysia ................................0.63
8 Colombia ...............................6.27
8 Argentina ...............................1.18
9 Brazil .....................................6.26
9 Sweden .................................1.36
10 Netherlands...........................6.19
10 Brazil ......................................1.42
11 Jordan ...................................6.12
11 France ....................................1.58
12 Belgium .................................5.91
12 Austria ...................................1.92
13 Argentina...............................5.86
13 Chile ......................................2.83
14 Indonesia...............................5.84
14 Spain .....................................3.16
15 Turkey....................................5.72
15 Australia ................................3.84
16 Egypt.....................................5.65
16 Switzerland............................3.91
17 United Arab Emirates............5.58
17 Japan.....................................4.00
18 Germany ...............................5.43
18 Indonesia...............................4.18
19 Poland ...................................5.33
19 Italy .......................................4.56
20 Thailand .................................5.31
20 South Africa ...........................4.74
21 Italy .......................................5.18
21 Mexico ..................................4.83
22 Israel......................................5.17
22 Slovak Republic .....................4.89
23 Japan .....................................5.11
23 Poland ...................................5.24
24 Slovak Republic .....................4.98
24 Peru .......................................5.45
25 Austria ...................................4.95
25 Korea, Rep. ...........................5.58
26 Denmark ...............................4.94
26 Colombia ...............................5.91
27 Canada ..................................4.93
27 Israel......................................6.14
28 Ukraine..................................4.84
28 Pakistan.................................6.21
29 Finland...................................4.80
29 Russian Federation................6.77
30 Romania ................................4.68
30 Denmark ...............................8.45
31 Australia ................................4.66
31 Czech Republic......................8.83
32 Switzerland............................4.66
32 Romania ................................9.54
33 Morocco................................4.55
33 Canada.................................10.14
34 Philippines.............................4.46
34 Germany..............................10.31
35 Spain .....................................4.32
35 Belgium ...............................10.75
36 Czech Republic......................4.07
36 Hungary...............................12.81
37 Singapore ..............................4.00
37 Netherlands.........................13.55
38 France ...................................3.96
38 United States ......................14.82
39 South Africa ..........................3.80
39 United Kingdom...................15.11
40 United States ........................3.70
n/a Bahrain ....................................n/a
41 United Kingdom.....................3.11
n/a Bangladesh..............................n/a
42 Hong Kong SAR ....................3.01
n/a Egypt .......................................n/a
43 India .......................................1.16
n/a Hong Kong SAR ......................n/a
44 China .....................................1.00
n/a India.........................................n/a
44 Russian Federation ................1.00
n/a Ireland .....................................n/a
n/a Bahrain ....................................n/a
n/a Jordan .....................................n/a
n/a Bangladesh..............................n/a
n/a Kazakhstan ..............................n/a
n/a Kazakhstan ..............................n/a
n/a Kuwait .....................................n/a
n/a Korea, Rep...............................n/a
n/a Nigeria .....................................n/a
n/a Kuwait .....................................n/a
n/a Norway....................................n/a
n/a Nigeria .....................................n/a
n/a Panama....................................n/a
n/a Norway....................................n/a
n/a Saudi Arabia ............................n/a
n/a Pakistan...................................n/a
n/a Singapore ................................n/a
n/a Saudi Arabia ............................n/a
n/a Ukraine ....................................n/a
n/a Sweden ...................................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
n/a Vietnam ...................................n/a
SOURCE: Global Property Guide website (data retrieved August 4, 2010),
www.globalpropertyguide.com
SOURCE: Ravi Balakrishnan, Stephan Danninger, Selim Elekdag, and Irina
Tytell. 2009. The Transmission of Financial Stress from Advanced to Emerging Economies. Washington DC: IMF.
3.12
Tier 1 capital ratio
Output loss during banking crises
This is the weighted average Tier 1 regulatory capital ratio at the 10 largest banks | 2009 or most recent year available
This is the difference between actual and trend real GDP during a banking crisis. Output loss during recent crises is weighted more heavily | 2010 RANK COUNTRY/ECONOMY
SCORE
1 Australia ................................0.00 RANK COUNTRY/ECONOMY
SCORE
1 Bahrain ..................................0.00
1 Jordan .................................16.84
1 Bangladesh ...........................0.00
2 Switzerland..........................15.44
1 Canada ..................................0.00
3 Ukraine ................................14.44
1 Czech Republic......................0.00
4 Saudi Arabia ........................14.40
1 Hong Kong SAR ....................0.00
5 Mexico ................................13.47
1 India ......................................0.00
6 United Arab Emirates ..........13.44
1 Italy .......................................0.00
7 Turkey ..................................12.88
1 Kazakhstan............................0.00
8 Finland.................................12.50
1 Nigeria...................................0.00
9 Brazil....................................12.42
1 Pakistan.................................0.00
10 Kuwait .................................12.41
1 Poland ...................................0.00
11 Russian Federation ..............12.01
1 Romania ................................0.00
12 Canada .................................11.89
1 Russian Federation ...............0.00
13 Belgium................................11.82
1 Saudi Arabia ..........................0.00
14 Denmark ..............................11.55
1 Singapore ..............................0.00
15 Pakistan................................11.54
1 Slovak Republic.....................0.00
16 South Africa .........................11.52
1 South Africa ..........................0.00
17 Malaysia ...............................11.38
1 Switzerland ...........................0.00
18 Thailand................................11.33
1 United Arab Emirates............0.00
19 Philippines............................11.32
1 Vietnam.................................0.00
20 Poland...................................11.11
22 Egypt.....................................0.44
21 Hong Kong SAR ...................11.05
23 Venezuela ..............................1.45
22 Austria..................................11.05
24 Norway..................................6.43
23 Germany..............................10.81
25 Ukraine ................................10.00
24 Sweden ...............................10.47
26 Morocco ..............................10.96
25 Singapore ............................10.45
27 Chile ....................................16.41
26 United Kingdom ....................9.84
28 China ...................................29.10
27 Kazakhstan ............................9.65
29 Austria.................................34.00
28 Spain .....................................9.56
30 Mexico .................................37.01
29 United States ........................9.32
31 Germany .............................38.00
30 France ...................................8.93
32 Israel....................................38.01
31 Norway..................................8.86
33 Peru .....................................41.40
32 Romania ................................8.26
34 France .................................42.00
33 Australia ................................8.15
35 Belgium...............................46.00
34 Italy ........................................7.87
36 Malaysia ...............................47.17
35 Korea, Rep. ............................7.71
37 United Kingdom ..................48.00
36 Netherlands ...........................7.55
38 Netherlands.........................50.00
37 Ireland ....................................7.19
38 United States ......................50.00
38 Japan .....................................7.09
40 Brazil ...................................62.30
39 Panama .................................6.91
41 Japan ...................................67.50
40 India ......................................6.79
42 Philippines ...........................68.76
41 Indonesia...............................6.75
43 Denmark .............................72.00
42 China .....................................6.63
44 Turkey ..................................81.78
43 Israel .....................................6.38
45 Hungary ..............................84.00
44 Bangladesh ...........................5.95
46 Panama ...............................85.04
n/a Argentina.................................n/a
47 Korea, Rep. .........................86.38
n/a Bahrain ....................................n/a
48 Finland.................................86.99
n/a Chile ........................................n/a
49 Colombia ...........................100.32
n/a Colombia .................................n/a
50 Sweden .............................103.13
n/a Czech Republic........................n/a
51 Indonesia...........................103.53
n/a Egypt .......................................n/a
52 Jordan................................106.37
n/a Hungary...................................n/a
53 Spain ..................................107.25
n/a Morocco ..................................n/a
54 Kuwait ................................107.58
n/a Nigeria .....................................n/a
55 Argentina...........................165.92
n/a Peru .........................................n/a
56 Thailand .............................182.57
n/a Slovak Republic .......................n/a
57 Ireland ...............................220.00
n/a Venezuela ................................n/a n/a Vietnam ...................................n/a SOURCE: BankScope database, data retrieved July 2010
SOURCE: Luc Laeven and Fabian Valencia. 2008. â&#x20AC;&#x153;Systemic Banking
Crises: A New Database.â&#x20AC;? IMF Working Paper 08/224, Washington, DC: IMF. Updated June 2010. All weighting is based on World Economic Forum analysis
3: Data Tables | Financial stability
3.11
331
3: Data Tables | Financial stability
332
3.13
3.14
Local currency sovereign rating
Foreign currency sovereign rating
This variable measures the probability that a country will pay its local currency borrowing in full and in a timely manner | 2010
This variable measures the probability that a country will pay its foreign currency borrowing in full and in a timely manner | 2010
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
SCORE
1 Australia ..............................20.00
1 Australia ..............................20.00
1 Austria.................................20.00
1 Austria.................................20.00
1 Canada ................................20.00
1 Canada ................................20.00
1 Denmark .............................20.00
1 Denmark .............................20.00
1 Finland.................................20.00
1 Finland.................................20.00
1 France .................................20.00
1 France .................................20.00
1 Germany .............................20.00
1 Germany .............................20.00
1 Netherlands.........................20.00
1 Netherlands.........................20.00
1 Norway ...............................20.00
1 Norway ...............................20.00
1 Singapore ............................20.00
1 Singapore ............................20.00
1 Sweden ...............................20.00
1 Sweden ...............................20.00
1 Switzerland .........................20.00
1 Switzerland .........................20.00
1 United Kingdom ..................20.00
1 United States ......................20.00
1 United States ......................20.00
14 United Kingdom ..................19.70
15 Belgium ...............................19.00
15 Belgium ...............................19.00
15 Hong Kong SAR ..................19.00
15 Hong Kong SAR ..................19.00
17 Chile ....................................18.00
17 Ireland ..................................17.70
17 Ireland .................................18.00
17 Japan....................................17.70
17 Japan...................................18.00
17 Spain ....................................17.70
17 Spain ...................................18.00
20 Kuwait ..................................17.00
21 Israel ....................................17.00
20 Saudi Arabia .........................17.00
21 Kuwait ..................................17.00
22 Chile ....................................16.00
21 Saudi Arabia .........................17.00
22 China ...................................16.00
24 China ...................................16.00
22 Italy .....................................16.00
24 Czech Republic....................16.00
22 Slovak Republic ...................16.00
24 Italy .....................................16.00
26 Bahrain ................................15.00
24 Korea, Rep...........................16.00
26 Czech Republic....................15.00
24 Malaysia ..............................16.00
26 Israel....................................15.00
24 Slovak Republic ...................16.00
26 Korea, Rep...........................15.00
24 South Africa ........................16.00
30 Malaysia ..............................14.00
31 Bahrain ................................15.00
30 Poland .................................14.00
31 Mexico ................................15.00
32 South Africa.........................12.70
31 Poland .................................15.00
32 Thailand ...............................12.70
34 Thailand ...............................14.00
34 Mexico ................................12.00
35 Brazil....................................13.00
34 Russian Federation..............12.00
35 Colombia .............................13.00
36 Brazil ....................................11.00
35 Morocco ..............................13.00
36 Hungary ...............................11.00
35 Peru .....................................13.00
36 India .....................................11.00
35 Russian Federation..............13.00
36 Kazakhstan...........................11.00
40 Kazakhstan ..........................12.00
36 Morocco...............................11.00
41 Egypt....................................11.00
36 Panama ................................11.00
41 Hungary ...............................11.00
36 Peru......................................11.00
41 India .....................................11.00
43 Colombia .............................10.30
41 Jordan ..................................11.00
44 Egypt ...................................10.00
41 Panama ................................11.00
44 Romania ..............................10.00
41 Romania ...............................11.00
46 Indonesia...............................9.30
47 Indonesia.............................10.00
46 Turkey....................................9.30
47 Philippines ...........................10.00
48 Jordan ...................................9.00
47 Turkey ..................................10.00
49 Vietnam .................................8.70
47 Vietnam ...............................10.00
50 Bangladesh ...........................8.00
51 Bangladesh ...........................8.00
50 Philippines.............................8.00
51 Venezuela..............................8.00
50 Venezuela..............................8.00
53 Nigeria ...................................7.00
53 Nigeria ...................................7.00
53 Ukraine ..................................7.00
54 Ukraine..................................6.00
55 Argentina...............................5.00
55 Argentina...............................5.00
55 Pakistan.................................5.00
55 Pakistan.................................5.00
n/a United Arab Emirates ..............n/a
n/a United Arab Emirates ..............n/a
SOURCE: Standard and Poorâ&#x20AC;&#x2122;s, July 2010
SOURCE: Standard and Poorâ&#x20AC;&#x2122;s, July 2010
3.16
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 | 2009 or most recent available
This variable is based on total debt owed by government to domestic residents, foreign nationals, and multilateral institutions as a percentage of GDP | 2009
RANK COUNTRY/ECONOMY
SCORE
1 Panama..................................6.01 2 Bahrain ..................................5.96
RANK COUNTRY/ECONOMY
SCORE
3 China .....................................5.94
1 Chile ......................................6.13
4 Saudi Arabia ..........................5.84
2 Russian Federation................8.29
5 Philippines.............................5.82
3 Kuwait ...................................9.48
6 Malaysia ................................5.82
4 Nigeria .................................13.12
7 Peru .......................................5.77
5 Kazakhstan ..........................13.73
8 Korea, Rep.............................5.76
6 China ...................................16.89
9 Jordan....................................5.76
7 Venezuela .............................17.36
10 Poland ...................................5.73
8 Ukraine................................20.20
11 Hong Kong SAR ....................5.71
9 Australia...............................21.99
12 United States ........................5.66
10 Saudi Arabia ........................22.97
13 India ......................................5.61
11 Korea, Rep. .........................23.53
14 Australia ................................5.58
12 Romania ..............................24.02
15 United Arab Emirates............5.53
13 Peru .....................................25.04
16 Japan.....................................5.50
14 Indonesia .............................27.38
17 France ...................................5.46
15 South Africa ........................29.96
18 Canada ..................................5.45
16 Czech Republic....................33.15
19 Switzerland............................5.43
17 Slovak Republic ...................35.66
20 Slovak Republic .....................5.39
18 Sweden ...............................36.06
21 Belgium .................................5.38
19 Hong Kong SAR ...................37.39
22 Indonesia...............................5.34
20 Bangladesh ..........................37.48
23 Thailand .................................5.30
21 Bahrain ................................38.81
24 Israel .....................................5.26
22 Mexico ................................39.09
25 Austria ...................................5.26
23 Switzerland..........................40.33
26 Singapore ..............................5.26
24 Denmark ..............................41.57
27 Kazakhstan ............................5.21
25 Finland.................................44.38
28 Bangladesh............................5.15
26 Panama ...............................44.40
29 Sweden .................................5.09
27 Colombia .............................46.15
30 Morocco................................5.05
28 Turkey..................................46.28
31 Mexico ..................................4.95
29 Thailand ...............................46.34
32 Germany ...............................4.94
30 Poland .................................46.46
33 Norway..................................4.94
31 Pakistan ...............................47.99
34 Czech Republic......................4.92
32 Argentina.............................48.67
35 Argentina...............................4.82
33 Norway................................49.20
36 Brazil .....................................4.81
34 United Arab Emirates..........49.84
37 Colombia ...............................4.80
35 Vietnam ...............................52.20
38 Finland...................................4.67
36 United States ......................52.92
39 United Kingdom ....................4.65
37 Spain ...................................53.24
40 Kuwait ...................................4.64
38 Malaysia ..............................53.73
41 Vietnam .................................4.62
39 Morocco...............................57.22
42 Denmark ...............................4.48
40 Philippines............................57.33
43 Chile ......................................4.48
41 Jordan .................................59.39
44 Netherlands...........................4.45
42 Netherlands .........................61.02
45 Spain .....................................4.10
43 India.....................................62.15
46 Nigeria...................................4.05
44 Brazil ...................................62.79
47 Ireland ...................................3.89
45 Ireland .................................63.27
48 South Africa ..........................3.80
46 Austria..................................67.15
49 Italy........................................3.74
47 United Kingdom ..................68.08
50 Romania ................................3.63
48 Hungary ...............................71.83
51 Egypt.....................................3.50
49 Germany .............................73.30
52 Hungary ................................3.37
50 France ..................................77.05
53 Russian Federation................3.30
51 Israel ...................................78.35
54 Turkey....................................2.99
52 Egypt...................................80.90
55 Pakistan.................................2.92
53 Canada ................................82.45
56 Venezuela ..............................2.37
54 Belgium ...............................96.70
57 Ukraine ..................................1.72
55 Singapore...........................113.14 56 Italy ....................................115.77
SOURCES: GDP and inflation level data from the IMF, World Economic
Outlook Database (April 2010); deposit interest rate data from the World Bank, Financial Development Indicators, retrieved August 2010; inflation volatility data from Bloomberg, retrieved September 2010
57 Japan.................................189.21 SOURCES: Public debt data from the Economist Intelligence Unit
CountryData Database, data retrieved August 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
3: Data Tables | Financial stability
3.15
333
3: Data Tables | Financial stability
3.17 Credit default swap spreads This measure shows the spreads on sovereign credit default swaps | 2010
RANK COUNTRY/ECONOMY
SCORE
1 Norway................................25.95 2 Finland.................................33.20 3 United States.......................37.93 4 Denmark ..............................41.44 5 Sweden ...............................41.97 6 Germany .............................42.55 7 Canada ................................42.96 8 Netherlands .........................47.29 9 Singapore ............................50.12 10 Switzerland ..........................51.50 11 Hong Kong SAR ...................57.87 12 Australia ..............................59.64 13 Saudi Arabia ........................72.24 14 United Kingdom...................74.61 15 France .................................86.35 16 Austria .................................89.23 17 China ...................................90.04 18 Slovak Republic ...................91.73 19 Japan...................................96.04 20 Czech Republic....................99.99 21 Malaysia.............................100.14
334
22 Chile ..................................102.29 23 Israel ..................................119.66 24 Morocco ............................124.64 25 Korea, Rep.........................126.15 26 Belgium .............................129.33 27 Panama .............................130.07 28 Thailand .............................132.11 29 Peru ...................................133.59 30 Mexico ..............................134.30 31 Brazil..................................136.49 32 Colombia ...........................145.76 33 Poland................................149.70 34 Philippines .........................170.87 35 South Africa.......................172.66 36 Italy....................................173.23 37 Bahrain ..............................175.69 38 Indonesia...........................179.67 39 Turkey ................................186.42 40 Russian Federation............189.34 41 Egypt..................................211.92 42 Kazakhstan.........................227.29 43 Spain .................................245.86 44 Vietnam .............................252.82 45 Ireland ...............................254.15 46 United Arab Emirates........298.60 47 Hungary ............................332.48 48 Romania ............................378.80 49 Ukraine..............................628.68 50 Pakistan .............................718.10 51 Argentina...........................970.13 52 Venezuela .......................1,402.69 n/a Bangladesh..............................n/a n/a India.........................................n/a n/a Jordan .....................................n/a n/a Kuwait .....................................n/a n/a Nigeria .....................................n/a SOURCE: CMA DataVision and Markit CDS, data retrieved July 2010
Data Tables
Section IV Banking financial services
3: Data Tables | Banking financial services
336
4.01
4.02
Deposit money bank assets to GDP
Central Bank assets to GDP
These are claims on domestic real nonfinancial sector by deposit money banks as a share of GDP | 2008
These are claims on domestic real nonfinancial sector by the central bank as a share of GDP | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
SCORE
1 Denmark............................219.51
1 Egypt...................................23.78
2 Ireland ...............................208.28
2 Brazil....................................13.33
3 Netherlands.......................200.84
3 Japan...................................12.27
4 Spain ..................................197.85
4 Panama ...............................12.02
5 United Kingdom ................189.59
5 Philippines.............................6.94
6 Switzerland........................184.57
6 Indonesia...............................6.31
7 Japan.................................150.86
7 Australia.................................6.17
8 Canada ..............................140.72
8 Bangladesh............................6.10
9 Hong Kong SAR ................140.43
9 Pakistan.................................6.04
10 Sweden..............................131.96
10 Argentina...............................5.80
11 Italy.....................................127.11
11 United States ........................5.26
12 Austria ...............................122.99
12 Italy .......................................4.52
13 Germany ............................121.28
13 Jordan ...................................4.04
14 France ................................121.25
14 Canada ..................................3.13
15 Australia .............................121.23
15 Thailand .................................2.76
16 Jordan................................119.79
16 Singapore ..............................2.24
17 Korea, Rep. ........................114.33
17 India.......................................2.15
18 Belgium ..............................111.06
18 Morocco................................2.03
19 Singapore...........................110.56
19 Turkey ....................................1.78
20 Malaysia ............................102.64
20 United Kingdom.....................1.70
21 Vietnam .............................102.49
21 Korea, Rep. ............................1.66
22 Israel ...................................95.54
22 Chile ......................................1.63
23 Thailand ...............................88.43
23 Austria ...................................1.42
24 South Africa .........................87.66
24 Nigeria ...................................1.35
25 Panama ...............................83.90
25 Spain......................................1.25
26 Finland.................................83.70
26 Vietnam .................................1.21
27 Norway................................83.33
27 Switzerland ............................1.17
28 Brazil ...................................83.22
28 France ...................................0.86
29 Morocco ..............................81.38
29 Russian Federation................0.83
30 Hungary ..............................79.65
30 Malaysia ................................0.79
31 Chile ....................................71.85
31 Belgium .................................0.72
32 Kuwait .................................70.45
32 Hungary ................................0.59
33 United States ......................69.12
33 South Africa ..........................0.55
34 Kazakhstan ..........................66.19
34 Venezuela ..............................0.44
35 India ....................................64.97
35 Colombia ...............................0.38
36 Egypt...................................62.36
36 Denmark ...............................0.36
37 Czech Republic....................60.95
37 Netherlands...........................0.22
38 Slovak Republic ...................53.53
38 Germany................................0.18
39 Bangladesh .........................52.88
39 Kazakhstan ............................0.14
40 Saudi Arabia.........................51.52
40 Slovak Republic .....................0.02
41 Poland .................................50.56
n/a Bahrain ....................................n/a
42 Turkey..................................48.51
n/a China .......................................n/a
43 Colombia..............................47.50
n/a Czech Republic........................n/a
44 Russian Federation ..............41.35
n/a Finland.....................................n/a
45 Pakistan...............................39.85
n/a Hong Kong SAR ......................n/a
46 Romania ..............................38.56
n/a Ireland .....................................n/a
47 Mexico ................................33.50
n/a Israel........................................n/a
48 Nigeria .................................33.13
n/a Kuwait .....................................n/a
49 Philippines...........................32.40
n/a Mexico ....................................n/a
50 Indonesia.............................30.25
n/a Norway....................................n/a
51 Venezuela ............................29.55
n/a Peru .........................................n/a
52 Peru .....................................20.55
n/a Poland......................................n/a
53 Argentina.............................20.45
n/a Romania ..................................n/a
n/a Bahrain ....................................n/a
n/a Saudi Arabia ............................n/a
n/a China .......................................n/a
n/a Sweden ...................................n/a
n/a Ukraine ....................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a United Arab Emirates ..............n/a
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
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
4.04
Financial system deposits to GDP
M2 to GDP
This variable shows the demand, time, and saving deposits in deposit-money banks and other financial institutions as a share of GDP | 2008
This variable is the money and quasi-money supply as a percentage of GDP | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
SCORE
1 Hong Kong SAR ................285.19
1 Hong Kong SAR ................329.54
2 Japan.................................182.69
2 China..................................181.96
3 Switzerland ........................157.73
3 Spain ..................................167.39
4 United Kingdom.................151.55
4 Japan .................................159.10
5 Spain .................................135.97
5 Switzerland........................154.64
6 Netherlands.......................122.81
6 Malaysia ............................146.69
7 Singapore...........................115.93
7 United Kingdom ................146.47
8 Canada...............................114.77
8 Jordan ...............................145.50
9 Malaysia ............................109.42
9 Singapore ..........................144.08
10 Jordan................................108.24
10 Netherlands .......................139.10
11 Germany............................103.58
11 Germany............................125.31
12 Australia ...............................97.58
12 Vietnam .............................122.72
13 Belgium................................97.02
13 Ireland ................................121.10
14 Ireland .................................96.90
14 Thailand ..............................117.27
15 Austria .................................89.29
15 Belgium .............................114.07
16 Israel ...................................86.90
16 Austria ...............................105.27
17 Morocco..............................85.89
17 Morocco ............................102.13
18 Thailand ...............................84.48
18 Australia ..............................99.36
19 Panama ...............................82.91
19 Bahrain ................................93.65
20 United States.......................77.91
20 Panama ...............................88.15
21 Egypt ...................................76.53
21 United Arab Emirates ..........87.69
22 Vietnam ...............................73.55
22 India .....................................87.69
23 France .................................68.27
23 Italy ......................................87.14
24 Italy......................................68.12
24 France..................................86.16
25 Denmark ..............................67.03
25 Canada ................................85.55
26 South Africa ........................63.35
26 Egypt...................................82.21
27 India ....................................63.25
27 Kuwait ..................................77.19
28 Czech Republic ....................61.51
28 Saudi Arabia ........................75.05
29 Brazil ...................................59.96
29 Denmark .............................73.63
30 Kuwait .................................58.93
30 Korea, Rep. .........................72.66
31 Korea, Rep...........................55.76
31 Czech Republic ....................71.34
32 Sweden ...............................52.33
32 Finland.................................70.75
33 Chile .....................................51.74
33 South Africa ........................69.44
34 Philippines ...........................51.03
34 Sweden................................67.04
35 Finland.................................50.60
35 Norway................................63.52
36 Norway................................50.60
36 United States ......................59.97
37 Bangladesh .........................50.53
37 Slovak Republic ...................59.72
38 Slovak Republic ...................48.52
38 Chile ....................................56.45
39 Hungary ...............................47.17
39 Hungary...............................55.19
40 Saudi Arabia ........................45.42
40 Ukraine................................53.82
41 Poland .................................40.41
41 Israel ...................................53.75
42 Turkey..................................39.94
42 Poland .................................53.29
43 Pakistan...............................36.05
43 Bangladesh .........................50.40
44 Indonesia.............................33.65
44 Philippines...........................48.59
45 Kazakhstan ..........................31.87
45 Kazakhstan...........................47.52
46 Russian Federation ..............31.73
46 Pakistan...............................40.64
47 Venezuela ............................30.08
47 Russian Federation..............40.23
48 Romania ..............................29.38
48 Nigeria.................................39.82
49 Peru .....................................24.26
49 Romania ..............................38.27
50 Mexico ................................22.13
50 Indonesia.............................38.10
51 Colombia .............................20.97
51 Brazil ....................................37.14
52 Nigeria.................................20.33
52 Colombia .............................36.01
53 Argentina.............................20.13
53 Peru .....................................34.38
n/a Bahrain ....................................n/a
54 Turkey..................................32.86
n/a China .......................................n/a
55 Venezuela.............................31.74
n/a Ukraine ....................................n/a
56 Mexico ................................30.55
n/a United Arab Emirates ..............n/a
57 Argentina .............................27.60
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
SOURCES: M2 supply data from the Economist Intelligence Unit
CountryData Database, data retrieved August 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
3: Data Tables | Banking financial services
4.03
337
3: Data Tables | Banking financial services
338
4.05
4.06
Private credit to GDP
Bank deposits to GDP
This variable shows private credit by deposit-money banks and other financial institutions as a percentage of GDP | 2008
This variable shows the demand, time, and savings deposits in deposit-money banks as a share of GDP | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
SCORE
1 United States ....................210.73
1 Hong Kong SAR ................289.12
2 Denmark ...........................209.82
2 Japan .................................183.10
3 Ireland ...............................205.76
3 United Kingdom ................153.63
4 Netherlands.......................192.60
4 China .................................144.78
5 United Kingdom ................189.56
5 Spain .................................136.95
6 Spain .................................188.49
6 Switzerland ........................133.17
7 Switzerland ........................174.81
7 Netherlands .......................121.99
8 South Africa.......................162.42
8 Canada...............................116.48
9 Canada ..............................134.03
9 Singapore...........................112.61
10 Hong Kong SAR ................126.48
10 Malaysia ............................109.44
11 Sweden .............................124.08
11 Jordan ................................108.11
12 Australia .............................121.43
12 Germany............................103.60
13 Austria ................................111.58
13 Australia ..............................98.15
14 France ................................106.74
14 Belgium................................97.00
15 Italy....................................103.33
15 Ireland .................................96.13
16 Germany ............................102.17
16 Austria .................................89.03
17 Norway...............................101.96
17 Israel ...................................86.89
18 Malaysia ..............................96.39
18 Morocco..............................85.25
19 Japan...................................94.88
19 Thailand ...............................84.06
20 Jordan .................................94.18
20 Panama ...............................83.00
21 Belgium ...............................93.70
21 Bahrain ................................79.29
22 Singapore ............................90.91
22 United States ......................78.26
23 Vietnam ...............................90.56
23 Egypt ...................................76.43
24 Korea, Rep. .........................89.84
24 Vietnam ...............................73.70
25 Israel ...................................86.58
25 France .................................68.29
26 Chile ....................................86.48
26 Denmark ..............................67.29
27 Panama ...............................80.58
27 Italy ......................................67.26
28 Finland.................................80.54
28 United Arab Emirates..........66.40
29 Thailand................................77.90
29 South Africa ........................63.41
30 Kuwait ..................................74.19
30 India ....................................63.20
31 Morocco..............................69.81
31 Czech Republic ....................61.35
32 Hungary ..............................64.21
32 Korea, Rep. .........................60.94
33 Kazakhstan ..........................64.20
33 Brazil ...................................60.66
34 Brazil ...................................54.49
34 Kuwait .................................60.27
35 Czech Republic....................48.42
35 Sweden ...............................52.58
36 India .....................................47.91
36 Chile ....................................52.11
37 Colombia .............................42.96
37 Finland.................................50.73
38 Slovak Republic ...................42.51
38 Bangladesh .........................50.34
39 Egypt....................................41.01
39 Slovak Republic ...................48.56
40 Poland .................................40.55
40 Hungary ...............................47.14
41 Russian Federation..............38.97
41 Philippines...........................45.77
42 Saudi Arabia ........................38.44
42 Saudi Arabia ........................45.36
43 Romania ..............................36.87
43 Poland .................................40.34
44 Bangladesh .........................35.88
44 Turkey..................................39.79
45 Turkey..................................30.83
45 Pakistan...............................35.26
46 Pakistan ...............................27.62
46 Indonesia.............................33.66
47 Philippines ............................27.11
47 Kazakhstan ..........................32.26
48 Venezuela ............................26.64
48 Russian Federation..............30.87
49 Nigeria.................................24.59
49 Venezuela ............................30.67
50 Mexico ................................23.48
50 Romania ..............................29.33
51 Indonesia.............................22.80
51 Ukraine................................25.86
52 Peru .....................................19.81
52 Peru .....................................24.25
53 Argentina.............................13.98
53 Mexico.................................21.94
n/a Bahrain ....................................n/a
54 Colombia .............................21.05
n/a China .......................................n/a
55 Nigeria.................................20.84
n/a Ukraine ....................................n/a
56 Argentina.............................20.07
n/a United Arab Emirates ..............n/a
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
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
4.08
Money market instruments to GDP
Aggregate profitability indicator
This variable is total money market instruments (US$ billions) as a percentage of GDP | 2009
This variable is based on a three-year average of three measures of profitability: net interest margin, bank return on assets, and bank return on equity | 2006–08
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
SCORE
1 Ireland .................................43.55
1 Netherlands...........................6.49
2 Netherlands .........................11.00
2 Belgium .................................6.31
3 Sweden ...............................10.48
3 United Arab Emirates............6.29
4 United Kingdom...................10.11
4 Saudi Arabia ..........................6.18
5 Belgium .................................6.66
5 Kuwait ...................................6.13
6 Finland...................................6.56
6 Bahrain ..................................6.02
7 Australia ................................5.04
7 Bangladesh ...........................5.22
8 Denmark ...............................4.67
8 Singapore ..............................5.20
9 Austria ...................................3.90
9 Australia ................................5.12
10 Spain .....................................3.05
10 Panama .................................5.06
11 Germany ................................2.74
11 Vietnam .................................5.05
12 France ...................................2.53
12 Finland...................................5.00
13 Norway ..................................1.89
13 Egypt.....................................4.84
14 Singapore...............................1.13
14 Hong Kong SAR ....................4.75
15 Hong Kong SAR.....................1.07
15 Nigeria ...................................4.74
16 Korea, Rep. ...........................0.81
16 Turkey ....................................4.74
17 United Arab Emirates............0.51
17 Czech Republic......................4.71
18 United States ........................0.43
18 Venezuela ..............................4.69
19 Canada ..................................0.14
19 South Africa ..........................4.65
20 Brazil .....................................0.07
20 Switzerland............................4.64
21 Japan.....................................0.05
21 Malaysia ................................4.60
22 Switzerland............................0.04
22 Spain .....................................4.59
23 Argentina...............................0.02
23 India ......................................4.50
24 Mexico...................................0.01
24 Korea, Rep. ...........................4.49
25 Italy .......................................0.00
25 China .....................................4.46
26 Bahrain ..................................0.00
26 Poland ...................................4.46
26 Bangladesh ...........................0.00
27 Slovak Republic .....................4.40
26 Chile ......................................0.00
28 Morocco................................4.39
26 China .....................................0.00
29 Israel .....................................4.37
26 Colombia ...............................0.00
30 Canada ..................................4.27
26 Czech Republic......................0.00
31 Jordan ...................................4.25
26 Egypt.....................................0.00
32 Denmark ...............................4.21
26 Hungary ................................0.00
33 France ...................................4.20
26 India ......................................0.00
34 Austria ...................................4.12
26 Indonesia...............................0.00
35 Norway..................................4.06
26 Israel .....................................0.00
36 Sweden .................................4.01
26 Jordan ...................................0.00
37 Brazil .....................................3.92
26 Kazakhstan............................0.00
38 Kazakhstan ............................3.88
26 Kuwait ...................................0.00
39 Indonesia ...............................3.76
26 Malaysia ................................0.00
40 Germany ................................3.74
26 Morocco................................0.00
41 Colombia ...............................3.64
26 Nigeria...................................0.00
42 United Kingdom ....................3.61
26 Pakistan.................................0.00
43 Russian Federation................3.52
26 Panama .................................0.00
44 Italy .......................................3.40
26 Peru.......................................0.00
45 Ireland ...................................3.40
26 Philippines.............................0.00
46 United States ........................3.20
26 Poland ...................................0.00
47 Ukraine ..................................3.19
26 Romania ................................0.00
48 Japan.....................................3.05
26 Russian Federation ...............0.00
49 Philippines.............................3.03
26 Slovak Republic.....................0.00
50 Pakistan.................................2.97
26 South Africa ..........................0.00
51 Peru .......................................2.67
26 Thailand.................................0.00
52 Argentina...............................2.44
26 Turkey....................................0.00
53 Romania ................................2.41
26 Ukraine..................................0.00
54 Hungary ................................2.39
26 Venezuela..............................0.00
55 Chile ......................................2.34
26 Vietnam.................................0.00
56 Thailand .................................2.28
n/a Saudi Arabia ............................n/a
57 Mexico...................................1.32
SOURCES: Bank for International Settlements, Quarterly Review June
2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
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
3: Data Tables | Banking financial services
4.07
339
3: Data Tables | Banking financial services
340
4.09
4.10
Bank overhead costs
Public ownership of banks
This is bank overhead costs as a percentage of total assets | 2008
This variable is the percentage of assets held by the 10 largest banks that is located in banks that are more than 25 percent governmentowned | 2009 or most recent available
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
SCORE
1 Singapore ..............................0.55
1 Austria...................................0.00
2 Vietnam .................................0.84
1 Belgium.................................0.00
3 China .....................................0.97
1 Canada ..................................0.00
4 Finland ...................................1.03
1 Colombia ...............................0.00
5 Spain......................................1.09
1 Czech Republic......................0.00
6 Norway ..................................1.14
1 Denmark ...............................0.00
7 United Arab Emirates ............1.29
1 Finland...................................0.00
8 Hong Kong SAR.....................1.32
1 France ...................................0.00
9 Japan .....................................1.32
1 Hong Kong SAR ....................0.00
10 Korea, Rep. ............................1.37
1 Israel .....................................0.00
11 Morocco ................................1.40
1 Japan.....................................0.00
12 Saudi Arabia...........................1.40
1 Jordan ...................................0.00
13 Sweden .................................1.43
1 Kazakhstan............................0.00
14 United Kingdom.....................1.43
1 Nigeria...................................0.00
15 Australia.................................1.57
1 Pakistan.................................0.00
16 India .......................................1.61
1 Panama .................................0.00
17 Malaysia.................................1.67
1 Singapore ..............................0.00
18 Thailand .................................1.86
1 South Africa ..........................0.00
19 Italy........................................1.98
1 Spain .....................................0.00
20 Czech Republic......................2.06
20 Slovak Republic .....................0.65
21 Kuwait ...................................2.06
21 Netherlands...........................2.32
22 Jordan ...................................2.07
22 Australia ................................2.87
23 Ireland ...................................2.09
23 Sweden .................................3.01
24 Pakistan .................................2.10
24 Mexico ..................................3.27
25 Canada ..................................2.10
25 Hungary ................................3.86
26 Israel .....................................2.23
26 Switzerland............................4.80
27 Slovak Republic .....................2.33
27 Thailand .................................5.57
28 Bangladesh ...........................2.39
28 Peru .......................................6.55
29 Philippines.............................2.49
29 Germany ................................7.61
30 Denmark ...............................2.51
30 Romania .................................7.76
31 Poland ...................................2.53
31 Norway ..................................7.94
32 France ...................................2.65
32 Italy........................................8.10
33 Egypt.....................................2.83
33 Morocco................................9.36
34 Indonesia...............................2.90
34 Venezuela ............................10.83
35 Kazakhstan ............................3.04
35 Argentina..............................11.67
36 Chile ......................................3.07
36 Ukraine.................................11.91
37 Austria ...................................3.24
37 United States ......................13.25
38 Bahrain ..................................3.50
38 Philippines ...........................16.08
39 United States ........................3.54
39 Bahrain .................................17.33
40 Nigeria...................................3.63
40 Chile ....................................18.48
41 Belgium .................................3.68
41 Korea, Rep. ..........................21.04
42 Ukraine..................................3.69
42 United Kingdom ..................24.81
43 Switzerland............................3.71
43 Turkey..................................26.27
44 Turkey....................................3.89
44 Kuwait .................................26.73
45 Peru .......................................4.42
45 Poland ..................................27.98
46 South Africa ..........................4.43
46 Ireland .................................28.20
47 Panama .................................4.66
47 Saudi Arabia.........................31.69
48 Venezuela ..............................4.85
48 Russian Federation ..............37.87
49 Germany ...............................4.96
49 Brazil ...................................38.08
50 Netherlands...........................5.26
50 Malaysia ..............................39.92
51 Colombia ...............................5.35
51 China ...................................52.16
52 Romania ................................6.79
52 Indonesia.............................56.51
53 Russian Federation ................7.58
53 United Arab Emirates..........58.18
54 Argentina................................7.74
54 Bangladesh .........................58.73
55 Brazil....................................10.36
55 Egypt...................................62.35
56 Hungary...............................16.62
56 India .....................................67.31
57 Mexico ................................20.89
57 Vietnam ...............................69.06
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
SOURCE: BankScope database, data retrieved July 2010
4.12
Bank operating costs to assets
Non-performing bank loans to total loans
This is non-interest expense as a percentage of average assets in last reported year | 2009 or most recent available
This variable is the percentage of non-performing bank loans relative to total number of loans outstanding | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
SCORE
1 Ireland ...................................0.56
1 Australia .................................1.10
2 China .....................................0.74
1 Norway ..................................1.10
3 Germany ...............................0.86
3 Canada...................................1.20
4 Denmark ...............................0.87
4 Panama..................................1.40
5 Belgium .................................0.87
5 Hong Kong SAR.....................1.50
6 Japan.....................................0.87
5 Israel ......................................1.50
7 Norway..................................0.94
7 China .....................................1.60
8 Sweden .................................0.95
8 Japan .....................................1.80
9 France ....................................1.06
9 Sweden .................................2.00
10 Singapore ..............................1.07
10 Austria ...................................2.30
11 Finland ...................................1.10
10 Singapore ..............................2.30
12 Netherlands............................1.11
12 India ......................................2.40
13 Bahrain...................................1.13
13 Venezuela ..............................2.60
14 Hong Kong SAR.....................1.16
14 Belgium .................................2.70
15 United Kingdom.....................1.21
14 Peru .......................................2.70
16 United Arab Emirates ............1.24
16 Argentina ...............................3.10
17 Australia.................................1.31
17 United Kingdom ....................3.30
18 Saudi Arabia...........................1.36
18 Mexico ..................................3.40
19 Spain......................................1.41
19 Indonesia...............................3.80
20 Kuwait....................................1.49
19 Malaysia ................................3.80
21 Kazakhstan ............................1.53
21 Slovak Republic .....................4.30
22 Italy........................................1.56
22 Brazil .....................................4.50
23 Egypt .....................................1.56
23 Colombia ...............................4.60
24 Austria ...................................1.62
23 United Arab Emirates............4.60
25 Jordan....................................1.66
25 Spain .....................................5.10
26 Malaysia.................................1.75
26 Czech Republic......................5.30
27 Switzerland ............................1.75
27 United States ........................5.40
28 Canada...................................1.91
28 Morocco................................5.50
29 Czech Republic ......................1.92
28 South Africa ..........................5.50
30 Vietnam .................................1.97
30 Turkey....................................5.70
31 Korea, Rep. ...........................2.23
31 Hungary ................................5.90
32 Slovak Republic .....................2.31
32 Italy .......................................6.20
33 Morocco................................2.32
33 Jordan ...................................6.40
34 Thailand .................................2.36
34 Nigeria...................................6.60
35 United States ........................2.38
35 Poland ....................................7.00
36 Chile ......................................2.46
36 Ireland ....................................7.50
37 India ......................................2.57
37 Pakistan...............................12.20
38 Bangladesh ...........................2.61
38 Egypt ...................................14.70
39 Russian Federation ................2.74
39 Romania ..............................14.80
40 Turkey....................................2.80
40 Kazakhstan ..........................21.20
41 South Africa ..........................2.84
41 Ukraine................................33.80
42 Pakistan.................................2.84
n/a Bahrain ....................................n/a
43 Poland ...................................2.93
n/a Bangladesh..............................n/a
44 Mexico ..................................3.09
n/a Chile ........................................n/a
45 Philippines.............................3.26
n/a Denmark..................................n/a
46 Romania ................................3.27
n/a Finland.....................................n/a
47 Israel .....................................3.31
n/a France......................................n/a
48 Indonesia...............................3.69
n/a Germany..................................n/a
49 Panama .................................3.71
n/a Korea, Rep...............................n/a
50 Brazil .....................................4.02
n/a Kuwait .....................................n/a
51 Ukraine..................................4.05
n/a Netherlands.............................n/a
52 Peru .......................................4.18
n/a Philippines ...............................n/a
53 Venezuela ..............................5.68
n/a Russian Federation..................n/a
54 Colombia ...............................5.69
n/a Saudi Arabia ............................n/a
55 Nigeria...................................5.83
n/a Switzerland..............................n/a
56 Hungary ................................5.85
n/a Thailand ...................................n/a
57 Argentina ...............................7.00
n/a Vietnam ...................................n/a
SOURCE: BankScope database, data retrieved July 2010
SOURCE: IMF, Global Financial Stability Report, October 2010
3: Data Tables | Banking financial services
4.11
341
3: Data Tables | Banking financial services
342
4.13
4.14
Private credit bureau coverage
Public credit registry coverage
This variable is the percentage of adults covered by a private credit registry | 2009
This variable is the percentage of adults covered by a public credit registry | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
SCORE
1 Argentina...........................100.00
1 China ...................................62.10
1 Australia ............................100.00
2 Belgium ...............................56.50
1 Canada ..............................100.00
3 Malaysia ..............................48.50
1 Ireland ...............................100.00
4 Spain ...................................45.30
1 Norway..............................100.00
5 Argentina.............................34.30
1 Sweden .............................100.00
6 Chile ....................................32.90
1 United Kingdom ................100.00
7 France .................................32.50
1 United States ....................100.00
8 Brazil ...................................23.70
9 Germany .............................98.30
9 Peru.....................................23.00
10 Korea, Rep. .........................93.80
10 Indonesia.............................22.00
11 Israel ...................................89.80
11 Vietnam ...............................19.00
12 Netherlands.........................83.50
12 Turkey ..................................15.90
13 Malaysia ..............................82.00
13 Italy......................................12.20
14 Italy ......................................77.50
14 United Arab Emirates ............7.30
14 Mexico .................................77.50
15 Romania ................................5.70
16 Japan ...................................76.20
16 Pakistan.................................5.60
17 Czech Republic ....................73.10
17 Czech Republic......................4.90
18 Hong Kong SAR...................71.90
18 Egypt.....................................2.50
19 Poland .................................68.30
19 Austria ...................................1.40
20 Colombia .............................60.50
19 Slovak Republic .....................1.40
21 Brazil ...................................59.20
21 Jordan....................................1.00
22 South Africa ........................54.70
22 Bangladesh ...........................0.90
23 Panama ...............................45.90
23 Germany ...............................0.80
24 Slovak Republic...................44.00
24 Australia ................................0.00
25 Turkey..................................42.90
24 Bahrain ..................................0.00
26 Singapore ............................40.30
24 Canada ..................................0.00
27 Austria .................................39.20
24 Colombia ...............................0.00
28 Bahrain ................................34.90
24 Denmark ...............................0.00
29 Chile ....................................33.90
24 Finland...................................0.00
30 Thailand ...............................32.90
24 Hong Kong SAR ....................0.00
31 Peru .....................................31.80
24 Hungary ................................0.00
32 Kuwait .................................30.40
24 India ......................................0.00
33 Romania ..............................30.20
24 Ireland ...................................0.00
34 Kazakhstan ..........................29.50
24 Israel .....................................0.00
35 Switzerland..........................22.50
24 Japan.....................................0.00
36 Saudi Arabia .........................17.90
24 Kazakhstan............................0.00
37 Finland.................................14.70
24 Korea, Rep. ...........................0.00
38 Russian Federation..............14.30
24 Kuwait ...................................0.00
39 Morocco ..............................14.00
24 Mexico ..................................0.00
40 United Arab Emirates ..........12.60
24 Morocco................................0.00
41 Hungary...............................10.30
24 Netherlands...........................0.00
42 India.....................................10.20
24 Nigeria...................................0.00
43 Egypt.....................................8.20
24 Norway .................................0.00
44 Spain ......................................7.60
24 Panama .................................0.00
45 Philippines .............................6.10
24 Philippines.............................0.00
46 Denmark ...............................5.20
24 Poland ...................................0.00
47 Ukraine..................................3.00
24 Russian Federation ...............0.00
48 Pakistan .................................1.50
24 Saudi Arabia ..........................0.00
49 Bangladesh ...........................0.00
24 Singapore ..............................0.00
49 Belgium.................................0.00
24 South Africa ..........................0.00
49 China .....................................0.00
24 Sweden .................................0.00
49 France ...................................0.00
24 Switzerland ...........................0.00
49 Indonesia...............................0.00
24 Thailand.................................0.00
49 Jordan ...................................0.00
24 Ukraine..................................0.00
49 Nigeria...................................0.00
24 United Kingdom ....................0.00
49 Venezuela..............................0.00
24 United States ........................0.00
49 Vietnam.................................0.00
24 Venezuela..............................0.00
SOURCE: The World Bank, Doing Business 2010
SOURCE: The World Bank, Doing Business 2010
Data Tables
Section V Non-banking financial services
3: Data Tables | Non-banking financial services
344
5.01
5.02
IPO market share
IPO proceeds amount
This is the three-year average of percentage of world initial public offerings (IPOs) issued in a given country as measured by US dollars | 2007â&#x20AC;&#x201C;09
This is the three-year average of total initial public offering (IPO) proceeds as a percentage of GDP | 2007â&#x20AC;&#x201C;09
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
1 China ...................................22.02
HARD DATA
1 Kazakhstan.............................1.12
2 United States.......................21.25
2 Brazil ......................................1.09
3 Brazil....................................10.46
3 Singapore ..............................1.06
4 United Kingdom ....................4.40
4 China .....................................0.82
5 Russian Federation ...............4.00
5 United Arab Emirates............0.81
6 India ......................................3.92
6 Hong Kong SAR ....................0.77
7 Spain .....................................3.32
7 Malaysia ................................0.75
8 Germany ...............................2.38
8 Israel .....................................0.67
9 Australia ................................2.05
9 India ......................................0.53
10 Japan .....................................1.60
10 Morocco................................0.52
11 Canada...................................1.55
11 Jordan ...................................0.51
12 Italy........................................1.37
12 Ukraine..................................0.49
13 Poland ....................................1.23
13 Colombia ...............................0.48
14 France ....................................1.20
14 Russian Federation................0.45
15 Singapore ..............................1.20
15 Czech Republic......................0.45
16 United Arab Emirates ............1.19
16 Poland ...................................0.42
17 Turkey ....................................1.09
17 Ireland ...................................0.40
18 Indonesia ...............................1.08
18 Austria ...................................0.36
19 Korea, Rep. ............................1.03
19 Spain .....................................0.35
20 Hong Kong SAR.....................1.02
20 Indonesia...............................0.34
21 Malaysia ................................0.95
21 Vietnam .................................0.34
22 Austria ...................................0.88
22 Philippines.............................0.33
23 Belgium .................................0.88
23 Australia ................................0.32
24 Mexico ..................................0.85
24 Belgium .................................0.29
25 Kazakhstan ............................0.83
25 United Kingdom ....................0.27
26 Israel .....................................0.80
26 Egypt.....................................0.27
27 Netherlands...........................0.70
27 Nigeria...................................0.26
28 Colombia ...............................0.68
28 Turkey....................................0.26
29 Ireland ...................................0.63
29 United States ........................0.24
30 Czech Republic......................0.56
30 Norway..................................0.20
31 Norway..................................0.51
31 Kuwait ...................................0.19
32 Ukraine..................................0.45
32 Argentina...............................0.19
33 Switzerland............................0.40
33 Korea, Rep.............................0.17
34 Argentina...............................0.36
34 Canada ..................................0.17
35 Philippines.............................0.33
35 South Africa...........................0.15
36 Nigeria...................................0.30
36 Peru .......................................0.14
37 Morocco................................0.28
37 Thailand .................................0.14
38 Egypt.....................................0.27
38 Netherlands...........................0.14
39 South Africa ..........................0.27
39 Mexico ..................................0.14
40 Sweden .................................0.27
40 Switzerland............................0.13
41 Thailand .................................0.23
41 Germany ................................0.11
42 Saudi Arabia ..........................0.22
42 Italy........................................0.10
43 Vietnam .................................0.18
43 Finland ...................................0.10
44 Kuwait ...................................0.16
44 Sweden .................................0.09
45 Finland...................................0.15
45 Saudi Arabia ..........................0.08
46 Peru .......................................0.11
46 Chile ......................................0.08
47 Denmark................................0.10
47 France ...................................0.07
48 Chile ......................................0.08
48 Bangladesh ...........................0.06
49 Jordan ...................................0.07
49 Japan.....................................0.05
50 Romania ................................0.05
50 Denmark ...............................0.05
51 Pakistan.................................0.04
51 Romania ................................0.05
52 Hungary ................................0.04
52 Hungary ................................0.05
53 Bangladesh ...........................0.03
53 Pakistan.................................0.04
n/a Bahrain ....................................n/a
n/a Bahrain ....................................n/a
n/a Panama....................................n/a
n/a Panama....................................n/a
n/a Slovak Republic .......................n/a
n/a Slovak Republic .......................n/a
n/a Venezuela ................................n/a
n/a Venezuela ................................n/a
SOURCE: Dealogic Analytics, data retrieved July 2010
SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
5.04
Share of world IPOs
M&A market share
This is the three-year average of the number of initial public offering (IPO) issues as a percentage of total global number of issues | 2007â&#x20AC;&#x201C;09
This is the three-year average of the dollar value of mergers and acquisitions (M&As) occurring in a given country as a percentage of the total global value | 2007â&#x20AC;&#x201C;09
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
1 China ...................................12.57
HARD DATA
1 United States ......................36.00
2 United States .......................11.39
2 United Kingdom ....................9.26
3 Canada ................................10.09
3 Germany ...............................4.56
4 Japan.....................................6.40
4 Japan.....................................4.16
5 Poland ...................................6.00
5 Canada ..................................4.14
6 Korea, Rep.............................5.76
6 China .....................................3.91
7 India ......................................5.50
7 France ...................................3.61
8 United Kingdom ....................5.33
8 Spain .....................................3.54
9 Australia ................................5.03
9 Netherlands...........................3.36
10 Brazil .....................................2.55
10 Russian Federation................3.13
11 France ...................................2.25
11 Australia ................................3.04
12 Malaysia ................................2.18
12 Italy .......................................2.99
13 Singapore ..............................2.14
13 Brazil ......................................1.79
14 Israel......................................2.01
14 Switzerland ............................1.57
15 Germany ................................1.84
15 Korea, Rep. ............................1.45
15 Hong Kong SAR.....................1.84
16 India .......................................1.21
17 South Africa ...........................1.58
17 Sweden..................................1.13
18 Italy........................................1.54
18 Norway..................................0.99
19 Indonesia ...............................1.51
19 Belgium .................................0.97
20 Thailand .................................1.31
20 South Africa ..........................0.73
21 Belgium .................................1.04
21 Hong Kong SAR ....................0.72
22 Bangladesh ............................0.74
22 Malaysia ................................0.66
23 Russian Federation................0.70
23 Singapore ..............................0.65
24 Norway..................................0.54
24 Austria ...................................0.49
24 Sweden .................................0.54
25 Mexico ..................................0.46
26 Morocco................................0.50
26 Turkey....................................0.43
26 Philippines.............................0.50
27 Indonesia...............................0.39
28 Spain .....................................0.47
28 Ireland ...................................0.38
29 Denmark ...............................0.44
29 Denmark ...............................0.35
29 Switzerland............................0.44
30 Egypt.....................................0.34
29 Ukraine..................................0.44
31 Philippines.............................0.33
32 Saudi Arabia ..........................0.37
32 Poland ...................................0.32
33 Netherlands...........................0.34
33 Finland...................................0.30
33 Nigeria...................................0.34
34 Kazakhstan ............................0.27
33 Pakistan.................................0.34
35 Chile ......................................0.25
33 Turkey....................................0.34
36 Israel .....................................0.20
37 United Arab Emirates............0.30
37 Hungary ................................0.20
38 Ireland ...................................0.27
38 Czech Republic......................0.19
38 Romania ................................0.27
39 Colombia ...............................0.19
40 Austria ...................................0.23
40 Thailand .................................0.16
40 Kazakhstan ............................0.23
41 United Arab Emirates ............0.16
40 Mexico ..................................0.23
42 Ukraine ..................................0.15
40 Vietnam .................................0.23
43 Saudi Arabia ..........................0.12
44 Argentina...............................0.20
44 Argentina ...............................0.11
44 Chile ......................................0.20
45 Romania ................................0.11
46 Czech Republic ......................0.17
46 Kuwait ...................................0.09
46 Jordan....................................0.17
47 Venezuela ..............................0.08
48 Colombia ...............................0.13
48 Peru .......................................0.06
48 Finland...................................0.13
49 Morocco................................0.06
48 Peru .......................................0.13
50 Pakistan.................................0.05
51 Egypt .....................................0.10
51 Nigeria...................................0.05
51 Kuwait ...................................0.10
52 Vietnam .................................0.05
53 Hungary ................................0.03
53 Bahrain ..................................0.05
n/a Bahrain ....................................n/a
54 Jordan ...................................0.03
n/a Panama....................................n/a
55 Slovak Republic .....................0.02
n/a Slovak Republic .......................n/a
56 Panama..................................0.01
n/a Venezuela ................................n/a
57 Bangladesh............................0.01
SOURCE: Dealogic Analytics, data retrieved July 2010
SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
3: Data Tables | Non-banking financial services
5.03
345
3: Data Tables | Non-banking financial services
346
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 mergers and acquisitions (M&A) transactions in US dollars (including the net debt of the target) as a percentage of GDP | 2007â&#x20AC;&#x201C;09
This is the three-year average of the percentage of world mergers and acquisitions (M&A) deals occurring in a given country as measured by the share of the total number of global M&A deals | 2007â&#x20AC;&#x201C;09
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
1 Netherlands .........................14.16
HARD DATA
1 United States ......................22.96
2 Singapore ............................12.58
2 Japan.....................................8.82
3 United Kingdom ..................12.47
3 China .....................................8.60
4 Hong Kong SAR....................11.74
4 United Kingdom.....................7.44
5 Malaysia ...............................11.36
5 Canada ..................................4.51
6 Switzerland ..........................11.34
6 Australia ................................4.20
7 Australia...............................10.45
7 Germany ...............................3.93
8 Canada ................................10.03
8 Russian Federation................3.63
9 South Africa ..........................8.88
9 Korea, Rep. ...........................3.53
10 Sweden .................................8.73
10 France....................................3.15
11 United States ........................8.69
11 India.......................................3.10
12 Norway..................................8.37
12 Spain .....................................2.43
13 Spain .....................................8.10
13 Malaysia ................................2.03
14 Bahrain...................................7.86
14 Sweden .................................2.02
15 Kazakhstan.............................7.84
15 Italy........................................1.93
16 Russian Federation ................7.72
16 Hong Kong SAR.....................1.38
17 Egypt......................................7.34
17 Netherlands ...........................1.34
18 Philippines..............................7.21
18 Singapore...............................1.14
19 Belgium .................................6.97
19 Switzerland ............................1.10
20 Korea, Rep. ...........................5.34
20 Brazil ......................................1.06
21 Ireland ...................................5.15
21 Poland ...................................0.93
22 Chile ......................................5.10
22 Norway..................................0.83
23 Hungary ................................4.85
23 Denmark ................................0.74
24 Italy .......................................4.72
24 South Africa ..........................0.73
25 Jordan ...................................4.70
25 Ukraine..................................0.72
26 France ...................................4.58
26 Thailand .................................0.68
27 Germany ...............................4.55
27 Belgium .................................0.62
28 Austria ...................................4.31
28 Indonesia...............................0.60
29 Finland...................................4.16
29 Austria ...................................0.53
30 Brazil .....................................4.03
29 Finland...................................0.53
31 Denmark ...............................3.73
31 Mexico ..................................0.40
32 Israel .....................................3.66
32 Ireland ...................................0.37
33 Ukraine..................................3.59
33 Czech Republic......................0.34
34 India ......................................3.53
34 Philippines.............................0.33
35 Czech Republic......................3.38
35 Vietnam .................................0.31
36 China .....................................3.15
36 Israel .....................................0.29
37 Japan.....................................3.00
37 Chile ......................................0.29
38 Colombia ...............................2.87
38 Romania ................................0.28
39 Indonesia...............................2.71
39 Turkey....................................0.27
40 Kuwait ...................................2.51
40 Argentina...............................0.27
41 Poland ...................................2.42
41 Hungary ................................0.23
42 United Arab Emirates............2.29
42 Colombia ...............................0.22
43 Morocco................................2.24
43 Peru .......................................0.19
44 Turkey....................................2.23
44 United Arab Emirates............0.18
45 Thailand .................................2.13
45 Egypt .....................................0.12
46 Romania ................................2.08
46 Kazakhstan ............................0.11
47 Vietnam .................................1.87
47 Slovak Republic .....................0.10
48 Peru .......................................1.75
48 Pakistan.................................0.07
49 Mexico...................................1.60
49 Saudi Arabia ..........................0.07
50 Panama..................................1.56
50 Kuwait ...................................0.06
51 Argentina ...............................1.28
50 Venezuela ..............................0.06
52 Pakistan .................................1.08
52 Nigeria...................................0.05
53 Saudi Arabia...........................1.02
53 Jordan ...................................0.04
54 Venezuela ..............................0.91
53 Morocco................................0.04
55 Slovak Republic .....................0.89
55 Bahrain ..................................0.04
56 Nigeria...................................0.88
56 Panama .................................0.04
57 Bangladesh ...........................0.24
57 Bangladesh ...........................0.02
SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
5.08
Life insurance density
Nonâ&#x20AC;&#x201C;life insurance density
This variable is the direct life insurance premiums from domestic sources to GDP | 2009
This variable is the direct non-life insurance premiums from domestic sources to GDP | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
1 Ireland .................................15.56
HARD DATA
1 Netherlands...........................9.36
2 South Africa.........................10.02
2 United States ........................4.54
3 United Kingdom ....................9.97
3 Switzerland............................4.47
4 Hong Kong SAR ....................9.62
4 United Kingdom ....................4.19
5 Japan .....................................7.87
5 Korea, Rep.............................4.15
6 Finland ...................................7.56
6 Canada ..................................4.13
7 France ....................................7.25
7 Ireland ...................................4.02
8 Korea, Rep. ...........................6.90
8 Venezuela..............................4.00
9 Denmark ...............................6.80
9 Germany ...............................3.78
10 Sweden .................................6.14
10 Denmark ...............................3.48
11 Italy .......................................5.44
11 France ...................................3.33
12 Belgium .................................5.40
12 Austria ...................................3.30
13 Switzerland............................5.33
13 Belgium .................................3.20
14 Singapore ..............................5.11
14 Russian Federation................3.17
15 India ......................................4.62
15 Spain .....................................2.98
16 Netherlands...........................4.25
16 Singapore ..............................2.93
17 United States ........................3.45
17 South Africa ..........................2.86
18 Germany ...............................3.33
18 Australia ................................2.79
19 Canada ..................................3.27
19 Italy .......................................2.55
20 Australia ................................3.26
20 Israel .....................................2.49
21 Malaysia ................................2.97
21 Panama .................................2.46
22 Austria ...................................2.71
22 Czech Republic ......................2.17
23 Spain .....................................2.68
23 Ukraine ..................................2.17
24 Norway..................................2.61
24 Argentina ...............................2.11
25 Chile ......................................2.55
25 Japan .....................................2.11
26 Israel .....................................2.53
26 Norway..................................2.10
27 Thailand .................................2.35
27 Jordan....................................2.01
28 China .....................................2.22
28 Finland ...................................1.95
29 Poland ....................................1.93
29 Sweden .................................1.94
30 Czech Republic ......................1.59
30 Morocco ................................1.94
31 Brazil ......................................1.57
31 United Arab Emirates ............1.91
32 Hungary .................................1.57
32 Poland ....................................1.86
33 Slovak Republic .....................1.48
33 Bahrain...................................1.77
34 Philippines.............................0.97
34 Chile ......................................1.72
35 Panama .................................0.97
35 Slovak Republic .....................1.69
36 Indonesia...............................0.94
36 Malaysia.................................1.65
37 Morocco................................0.91
37 Thailand .................................1.61
38 Mexico ..................................0.88
38 Colombia ...............................1.58
39 Colombia ...............................0.74
39 Brazil ......................................1.52
40 Vietnam .................................0.73
40 Hungary .................................1.51
41 Bahrain ..................................0.68
41 Romania.................................1.46
42 Bangladesh ...........................0.67
42 Hong Kong SAR.....................1.39
43 Peru .......................................0.54
43 Mexico ...................................1.10
44 Argentina...............................0.46
44 China......................................1.10
45 Egypt.....................................0.37
45 Turkey ....................................1.09
46 Romania ................................0.33
46 Saudi Arabia ..........................0.98
47 Pakistan.................................0.33
47 Vietnam .................................0.83
48 United Arab Emirates............0.32
48 Peru .......................................0.82
49 Jordan ...................................0.21
49 Kazakhstan ............................0.65
50 Turkey ....................................0.19
50 India ......................................0.64
51 Venezuela ..............................0.15
51 Philippines.............................0.52
52 Ukraine..................................0.09
52 Egypt.....................................0.46
53 Nigeria...................................0.08
53 Nigeria...................................0.45
54 Kuwait ...................................0.08
54 Indonesia...............................0.41
55 Saudi Arabia ..........................0.07
55 Pakistan.................................0.39
56 Kazakhstan ............................0.06
56 Kuwait ...................................0.33
57 Russian Federation................0.05
57 Bangladesh ...........................0.22
SOURCES: Swiss Re, World Insurance in 2009: Premiums Dipped, but
Industry Capital Improved; GDP data from the IMF, World Economic Outlook Database (April 2010)
SOURCES: Swiss Re, World Insurance in 2009: Premiums Dipped, but
Industry Capital Improved; GDP data from the IMF, World Economic Outlook Database (April 2010)
3: Data Tables | Non-banking financial services
5.07
347
3: Data Tables | Non-banking financial services
348
5.09
5.10
Real growth of direct insurance premiums
Life insurance coverage
This is the annual real rate of growth (%) of direct premiums (life and non-life) based on local currency prices | 2008
This is the direct domestic premiums for life insurance to per capita GDP | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
HARD DATA
1 China .....................................0.31
1 India ....................................55.41
2 Poland ...................................0.30
2 China ...................................29.68
3 Saudi Arabia ..........................0.22
3 United States ......................10.62
4 Panama..................................0.17
4 Japan ...................................10.05
5 Colombia ...............................0.15
5 United Kingdom ....................6.16
6 Romania ................................0.15
6 South Africa ..........................4.94
7 United Arab Emirates ............0.14
7 France ...................................4.54
8 Argentina...............................0.12
8 Korea, Rep. ...........................3.36
9 Egypt .....................................0.11
9 Italy .......................................3.25
10 Peru .......................................0.10
10 Brazil......................................3.01
11 Chile ......................................0.10
11 Germany ...............................2.73
12 Australia ................................0.09
12 Indonesia...............................2.17
13 Brazil .....................................0.08
13 Thailand .................................1.58
14 Morocco................................0.08
14 Spain......................................1.23
15 Russian Federation................0.07
15 Bangladesh ............................1.11
16 Japan.....................................0.07
16 Canada ...................................1.10
17 Slovak Republic .....................0.05
17 Mexico ..................................0.95
18 Mexico ..................................0.05
18 Philippines.............................0.90
19 South Africa ..........................0.04
19 Malaysia ................................0.82
20 Spain .....................................0.04
20 Poland ...................................0.73
21 Israel .....................................0.03
21 Australia ................................0.71
22 Singapore ..............................0.02
22 Netherlands...........................0.70
23 Malaysia ................................0.02
23 Ireland ...................................0.69
24 Sweden .................................0.01
24 Hong Kong SAR ....................0.68
25 Canada ..................................0.01
25 Vietnam .................................0.63
26 Finland ...................................0.01
26 Belgium .................................0.58
27 Thailand .................................0.01
27 Sweden .................................0.57
28 Denmark................................0.01
28 Pakistan.................................0.53
29 India ......................................0.00
29 Chile ......................................0.43
30 Netherlands...........................0.00
30 Finland...................................0.40
31 Austria ..................................-0.01
31 Switzerland............................0.39
32 Switzerland ..........................–0.01
32 Denmark ...............................0.37
33 Vietnam ...............................–0.01
33 Colombia ...............................0.33
34 Korea, Rep. ..........................–0.01
34 Morocco................................0.29
35 Germany ..............................–0.01
35 Egypt.....................................0.29
36 Czech Republic ....................–0.01
36 Singapore ..............................0.24
37 Norway................................–0.02
37 Austria ...................................0.22
38 Belgium ...............................–0.03
38 Argentina...............................0.19
39 Turkey ..................................–0.03
39 Israel......................................0.18
40 United States ......................–0.03
40 Czech Republic ......................0.17
41 Philippines ...........................–0.04
41 Hungary.................................0.16
42 Jordan .................................–0.05
42 Peru .......................................0.16
43 Indonesia.............................–0.05
43 Turkey ....................................0.13
44 Hong Kong SAR ..................–0.06
44 Nigeria ...................................0.13
45 France..................................–0.09
45 Norway..................................0.13
46 Hungary ...............................–0.10
46 Slovak Republic .....................0.08
47 Italy ......................................–0.11
47 Russian Federation................0.07
48 United Kingdom ..................–0.13
48 Romania ................................0.07
49 Kazakhstan ..........................–0.23
49 Venezuela ..............................0.04
n/a Bahrain ....................................n/a
50 Ukraine..................................0.04
n/a Bangladesh..............................n/a
51 Panama .................................0.03
n/a Ireland .....................................n/a
52 Saudi Arabia ..........................0.02
n/a Kuwait .....................................n/a
53 United Arab Emirates............0.02
n/a Nigeria .....................................n/a
54 Jordan....................................0.01
n/a Pakistan...................................n/a
55 Kazakhstan ............................0.01
n/a Ukraine ....................................n/a
56 Bahrain ..................................0.01
n/a Venezuela ................................n/a
57 Kuwait ...................................0.00
SOURCE: Swiss Re, World Insurance in 2008: Emerging Markets Leading
the Way
SOURCES: Swiss Re, World Insurance in 2009: Premiums Dipped, but
Industry Capital Improved; GDP data from the IMF, World Economic Outlook Database (April 2010)
5.12
Nonâ&#x20AC;&#x201C;life insurance coverage
Relative value-added of insurance to GDP
This is the direct domestic premiums for non-life insurance to per capita GDP | 2009
This is the value added by insurance and pension services to the economy after costs are subtracted, as a percentage of GDP | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
HARD DATA
1 China ...................................14.65
1 Bahrain ..................................5.94
2 United States ......................13.96
2 Hong Kong SAR ....................4.53
3 India .......................................7.73
3 Singapore ..............................3.46
4 Russian Federation................4.48
4 Switzerland............................3.37
5 Germany................................3.10
5 United States ........................3.00
6 Brazil .....................................2.92
6 Ireland ...................................2.88
7 Japan.....................................2.69
7 Israel......................................2.76
8 United Kingdom ....................2.59
8 Malaysia ................................2.62
9 France ...................................2.08
9 Egypt.....................................2.24
10 Korea, Rep. ...........................2.02
10 Ukraine..................................2.22
11 Netherlands ...........................1.54
11 South Africa...........................2.14
12 Italy........................................1.53
12 Australia ................................2.12
13 South Africa ...........................1.41
13 Korea, Rep. ............................1.90
14 Canada...................................1.39
14 Brazil ......................................1.81
15 Spain......................................1.36
15 Japan .....................................1.76
16 Mexico ...................................1.19
16 Morocco.................................1.74
17 Venezuela...............................1.15
17 Jordan....................................1.66
18 Thailand .................................1.08
18 Netherlands ...........................1.59
19 Ukraine..................................0.99
19 Chile ......................................1.55
20 Indonesia...............................0.95
20 United Kingdom.....................1.52
21 Argentina...............................0.85
21 Russian Federation ................1.45
22 Turkey....................................0.77
22 Argentina ...............................1.26
23 Vietnam .................................0.73
23 United Arab Emirates ............1.26
24 Colombia ...............................0.71
24 Denmark ................................1.14
25 Poland ...................................0.71
25 Canada ...................................1.14
26 Nigeria...................................0.69
26 Indonesia ...............................1.14
27 Pakistan.................................0.64
27 Turkey ....................................1.14
28 Morocco................................0.61
28 Colombia................................1.14
29 Australia ................................0.61
29 Poland ....................................1.07
30 Philippines.............................0.48
30 Sweden .................................1.02
31 Malaysia ................................0.46
31 Austria ...................................0.98
32 Bangladesh ...........................0.36
32 India ......................................0.94
33 Egypt.....................................0.35
33 Czech Republic......................0.94
34 Belgium .................................0.35
34 France ...................................0.94
35 Switzerland............................0.33
35 Norway..................................0.93
36 Romania ................................0.31
36 Peru .......................................0.93
37 Chile ......................................0.29
37 Belgium .................................0.88
38 Austria ...................................0.27
38 Kuwait ...................................0.85
39 Saudi Arabia ..........................0.25
39 Panama .................................0.78
40 Peru .......................................0.24
40 Philippines.............................0.77
41 Czech Republic......................0.23
41 Slovak Republic .....................0.77
42 Denmark................................0.19
42 Italy .......................................0.64
43 Israel......................................0.18
43 Spain .....................................0.64
44 Sweden .................................0.18
44 Finland...................................0.63
45 Ireland ...................................0.18
45 Pakistan.................................0.62
46 Hungary.................................0.15
46 Germany ...............................0.62
47 Singapore ..............................0.14
47 Vietnam .................................0.59
48 Jordan ...................................0.12
48 China .....................................0.52
49 Finland ...................................0.10
49 Hungary ................................0.51
50 Norway..................................0.10
50 Thailand .................................0.50
51 Kazakhstan ............................0.10
51 Saudi Arabia ..........................0.49
52 Hong Kong SAR ....................0.10
52 Bangladesh ...........................0.48
53 United Arab Emirates............0.09
53 Nigeria...................................0.39
54 Slovak Republic .....................0.09
54 Mexico ..................................0.34
55 Panama .................................0.09
55 Romania ................................0.18
56 Bahrain ..................................0.02
56 Venezuela ..............................0.18
57 Kuwait ...................................0.01
n/a Kazakhstan ..............................n/a
SOURCES: Swiss Re, World Insurance in 2009: Premiums Dipped, but
Industry Capital Improved; GDP data from the IMF, World Economic Outlook Database (April 2010)
SOURCE: Global Insight, World Industry Services, August 2010
3: Data Tables | Non-banking financial services
5.11
349
3: Data Tables | Non-banking financial services
350
5.13
5.14
Securitization to GDP
Share of total number of securitization deals
This is the 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 | 2007â&#x20AC;&#x201C;09
This is the three-year average of the sum of asset-backed securities (ABS), mortgage-backed securities (MBS), high-yield bonds, and highly leveraged loans deals as a percentage of total deals | 2007â&#x20AC;&#x201C;09
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
HARD DATA
1 United States ......................10.75
1 United States.......................61.68
2 United Kingdom ....................5.82
2 Korea, Rep.............................5.01
3 Netherlands...........................4.96
3 Russian Federation................3.62
4 Ireland ...................................4.47
4 Argentina...............................3.09
5 Jordan ...................................3.66
5 United Kingdom ....................2.66
6 Spain .....................................3.36
6 Canada ..................................2.45
7 Singapore ..............................3.22
7 Japan .....................................2.01
8 Kazakhstan ............................3.20
8 France ....................................1.94
9 Korea, Rep. ...........................3.04
9 Germany ................................1.39
10 Denmark ...............................2.89
10 India .......................................1.37
11 Canada ..................................2.85
11 Mexico...................................1.26
12 Australia ................................2.84
11 Spain......................................1.26
13 Finland...................................2.66
13 Brazil ......................................1.22
14 Russian Federation................2.61
14 Ukraine ..................................1.12
15 Philippines.............................2.31
15 Australia.................................1.00
16 Ukraine..................................2.27
16 Italy .......................................0.93
17 Belgium .................................2.26
17 Netherlands ...........................0.76
18 Malaysia ................................2.01
18 Indonesia...............................0.73
19 Egypt .....................................1.84
19 Peru .......................................0.49
20 United Arab Emirates ............1.79
20 Philippines.............................0.43
21 Turkey ....................................1.79
21 Kazakhstan ............................0.42
22 Hong Kong SAR.....................1.67
22 Ireland ...................................0.38
23 France ....................................1.67
23 China .....................................0.37
24 Germany ................................1.66
24 Turkey....................................0.37
25 Sweden .................................1.63
25 Malaysia ................................0.35
26 Kuwait....................................1.38
26 Colombia ...............................0.32
27 South Africa ...........................1.35
27 Singapore ..............................0.32
28 Mexico...................................1.26
28 Chile ......................................0.26
29 Argentina ...............................1.20
29 Belgium .................................0.24
30 Vietnam .................................1.18
30 United Arab Emirates............0.21
31 Indonesia ...............................1.16
31 Pakistan.................................0.21
32 Venezuela...............................1.15
32 Hong Kong SAR ....................0.20
33 Colombia................................1.13
33 Vietnam .................................0.19
34 Italy ........................................1.11
34 Norway..................................0.18
35 Hungary .................................1.06
35 Sweden .................................0.18
36 Switzerland ............................1.03
35 Switzerland............................0.18
37 Norway ..................................1.01
37 South Africa...........................0.14
38 Peru .......................................0.97
38 Finland...................................0.12
39 Japan.....................................0.82
39 Denmark................................0.12
40 Chile ......................................0.81
40 Hungary ................................0.09
41 Brazil .....................................0.75
41 Poland ...................................0.08
42 Morocco................................0.72
42 Egypt.....................................0.07
43 Pakistan.................................0.69
42 Thailand .................................0.07
44 India ......................................0.58
44 Austria ...................................0.06
45 Austria ...................................0.48
44 Kuwait ...................................0.06
46 Slovak Republic .....................0.47
44 Nigeria...................................0.06
47 Romania ................................0.40
44 Romania ................................0.06
48 Panama .................................0.39
48 Saudi Arabia ..........................0.04
49 Nigeria...................................0.38
48 Slovak Republic .....................0.04
50 Saudi Arabia ..........................0.29
50 Czech Republic......................0.04
51 Poland ...................................0.24
51 Venezuela ..............................0.03
52 Czech Republic......................0.24
52 Israel .....................................0.02
53 Thailand .................................0.15
52 Jordan ...................................0.02
54 Israel......................................0.14
52 Morocco................................0.02
55 China .....................................0.11
55 Panama..................................0.01
56 Bahrain ..................................0.08
56 Bahrain ..................................0.01
57 Bangladesh............................0.01
56 Bangladesh............................0.01
SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
SOURCE: Dealogic Analytics, data retrieved July 2010
Data Tables
Section VI Financial markets
3: Data Tables | Financial markets
352
6.01
6.02
Spot foreign exchange turnover
Outright forward foreign exchange turnover
This is the percentage share of the world total of spot foreign exchange turnover | April 2007
This is the percentage share of the world total of outright forward foreign exchange turnover | April 2007
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
HARD DATA
1 United Kingdom ..................26.29
1 United Kingdom ..................29.21
2 United States ......................24.40
2 United States ......................26.72
3 Switzerland............................8.50
3 Japan.....................................6.03
4 Japan .....................................7.91
4 Singapore ..............................5.93
5 Singapore ..............................6.99
5 Germany ...............................5.32
6 Australia ................................3.47
6 Switzerland............................3.96
7 Hong Kong SAR ....................2.97
7 Hong Kong SAR ....................3.46
8 Russian Federation................2.66
8 Australia ................................3.41
9 France ....................................1.96
9 Denmark ...............................2.35
10 Germany ................................1.92
10 France ....................................1.76
11 Korea, Rep. ............................1.36
11 Belgium .................................1.71
12 Denmark ................................1.18
12 India .......................................1.48
13 Belgium..................................1.15
13 Netherlands ...........................1.34
14 India .......................................1.12
14 Korea, Rep. ............................1.21
15 Canada...................................1.07
15 Canada ...................................1.01
16 Italy .......................................0.88
16 Italy .......................................0.60
17 China .....................................0.65
17 Norway..................................0.57
18 Sweden .................................0.61
18 Spain .....................................0.48
19 Spain .....................................0.48
19 Austria ...................................0.45
20 Austria ...................................0.43
20 Sweden .................................0.37
21 Brazil .....................................0.40
21 Chile ......................................0.35
22 Mexico ..................................0.35
22 Russian Federation................0.26
23 Ireland ...................................0.30
23 South Africa ..........................0.22
24 Israel .....................................0.28
24 Czech Republic......................0.21
25 Norway..................................0.27
25 Ireland ...................................0.21
26 South Africa ..........................0.27
26 Bahrain ..................................0.17
27 Netherlands...........................0.24
27 Thailand .................................0.16
28 Saudi Arabia ..........................0.21
28 Turkey ....................................0.15
29 Poland....................................0.19
29 Poland....................................0.12
30 Hungary.................................0.17
30 Indonesia...............................0.12
31 Chile ......................................0.16
31 Colombia ...............................0.11
32 Indonesia...............................0.13
32 Mexico...................................0.10
33 Malaysia ................................0.13
33 Finland...................................0.09
34 Bahrain ..................................0.12
34 Malaysia ................................0.08
35 Czech Republic ......................0.11
35 Brazil .....................................0.08
36 Thailand .................................0.11
36 Peru .......................................0.05
37 Colombia ...............................0.10
37 Philippines.............................0.05
38 Argentina...............................0.09
38 Hungary ................................0.04
39 Philippines.............................0.08
39 Saudi Arabia ..........................0.03
40 Romania ................................0.08
40 Romania ................................0.02
41 Turkey....................................0.06
41 China .....................................0.01
42 Finland...................................0.05
42 Argentina...............................0.00
43 Peru .......................................0.05
43 Slovak Republic.....................0.00
44 Slovak Republic .....................0.02
n/a Bangladesh..............................n/a
n/a Bangladesh..............................n/a
n/a Egypt .......................................n/a
n/a Egypt .......................................n/a
n/a Israel........................................n/a
n/a Jordan .....................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Kazakhstan ..............................n/a
n/a Kuwait .....................................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Nigeria .....................................n/a
n/a Pakistan...................................n/a
n/a Pakistan...................................n/a
n/a Panama....................................n/a
n/a Panama....................................n/a
n/a Ukraine ....................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
6.04
Foreign exchange swap turnover
Interest rate derivatives turnover: Forward rate agreements
This is the percentage share of the world total of foreign exchange swap turnover | April 2007
RANK COUNTRY/ECONOMY
HARD DATA
1 United Kingdom ..................40.82
This is the percentage share of world total of over-the-counter single currency forward interest rate agreements turnover | April 2007
RANK COUNTRY/ECONOMY
HARD DATA
1 United Kingdom...................45.11
2 United States ......................10.83
2 United States ......................26.90
3 Hong Kong SAR ....................5.54
3 Germany ................................7.27
4 Switzerland............................5.28
4 France ...................................5.58
5 Singapore ..............................5.27
5 Sweden .................................2.58
6 Japan.....................................5.08
6 Switzerland ............................1.83
7 Australia ................................5.02
7 Canada...................................1.81
8 France ...................................3.96
8 Norway ..................................1.56
9 Denmark ...............................2.77
9 Denmark ................................1.09
10 Germany ...............................2.34
10 Australia.................................1.05
11 Canada...................................1.90
11 Japan .....................................1.00
12 Sweden .................................1.49
12 Italy........................................0.74
13 Belgium..................................1.19
13 South Africa ..........................0.68
14 Norway ..................................1.18
14 Belgium .................................0.49
15 Italy .......................................0.99
15 Singapore ..............................0.47
16 Russian Federation................0.68
16 Poland ...................................0.42
17 Netherlands...........................0.68
17 Netherlands...........................0.28
18 India ......................................0.61
18 Hong Kong SAR ....................0.21
19 Korea, Rep. ...........................0.49
19 Hungary.................................0.17
20 Austria ...................................0.47
20 Austria ...................................0.16
21 Mexico ..................................0.46
21 Spain .....................................0.16
22 South Africa ..........................0.43
22 Czech Republic......................0.14
23 Spain .....................................0.36
23 Korea, Rep.............................0.13
24 Finland...................................0.32
24 Mexico ..................................0.09
25 Poland ...................................0.27
25 Finland...................................0.05
26 Ireland ...................................0.26
26 Ireland ...................................0.03
27 Israel .....................................0.20
27 Thailand.................................0.00
28 Hungary ................................0.20
28 Malaysia ................................0.00
29 Thailand .................................0.19
29 Turkey....................................0.00
30 Slovak Republic .....................0.14
30 Colombia ...............................0.00
31 Czech Republic......................0.12
31 Indonesia...............................0.00
32 Turkey....................................0.09
31 Philippines.............................0.00
33 Romania ................................0.06
31 Saudi Arabia ..........................0.00
34 Malaysia ................................0.06
34 Chile ......................................0.00
35 Saudi Arabia ..........................0.06
n/a Argentina.................................n/a
36 Philippines.............................0.05
n/a Bahrain ....................................n/a
37 China .....................................0.04
n/a Bangladesh..............................n/a
38 Bahrain ..................................0.03
n/a Brazil........................................n/a
39 Indonesia...............................0.03
n/a China .......................................n/a
40 Chile ......................................0.02
n/a Egypt .......................................n/a
41 Colombia ...............................0.00
n/a India.........................................n/a
42 Brazil .....................................0.00
n/a Israel........................................n/a
n/a Argentina.................................n/a
n/a Jordan .....................................n/a
n/a Bangladesh..............................n/a
n/a Kazakhstan ..............................n/a
n/a Egypt .......................................n/a
n/a Kuwait .....................................n/a
n/a Jordan .....................................n/a
n/a Morocco ..................................n/a
n/a Kazakhstan ..............................n/a
n/a Nigeria .....................................n/a
n/a Kuwait .....................................n/a
n/a Pakistan...................................n/a
n/a Morocco ..................................n/a
n/a Panama....................................n/a
n/a Nigeria .....................................n/a
n/a Peru .........................................n/a
n/a Pakistan...................................n/a
n/a Romania ..................................n/a
n/a Panama....................................n/a
n/a Russian Federation..................n/a
n/a Peru .........................................n/a
n/a Slovak Republic .......................n/a
n/a Ukraine ....................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
3: Data Tables | Financial markets
6.03
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
353
3: Data Tables | Financial markets
354
6.05
6.06
Interest rate derivatives turnover: Swaps
Interest rate derivatives turnover: Options
This is the percentage share of the world total of over-the-counter single currency interest rate swaps turnover | April 2007
This is the percentage share of the world total of over-the-counter interest rate options turnover | April 2007
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
HARD DATA
1 United Kingdom ..................45.84
1 United States ......................42.38
2 United States ......................20.52
2 United Kingdom ..................34.08
3 France ...................................8.97
3 Japan.....................................8.79
4 Germany ...............................4.09
4 France ...................................6.03
5 Switzerland............................3.51
5 Belgium .................................1.52
6 Singapore ..............................3.50
6 Canada...................................1.33
7 Japan .....................................3.17
7 Italy........................................1.00
8 Netherlands ...........................1.64
8 Germany ...............................0.73
9 Italy........................................1.59
9 Singapore ..............................0.57
10 Australia .................................1.15
10 Sweden .................................0.55
11 Hong Kong SAR.....................1.03
11 Denmark ...............................0.53
12 Belgium .................................1.02
12 Australia ................................0.49
13 Spain......................................1.00
13 Finland...................................0.33
14 Canada ..................................0.70
14 South Africa ..........................0.31
15 Ireland ...................................0.45
15 Spain .....................................0.25
16 Denmark ...............................0.31
16 Netherlands...........................0.22
17 Korea, Rep. ...........................0.29
17 Hong Kong SAR ....................0.21
18 Austria ...................................0.26
18 Korea, Rep.............................0.16
19 India ......................................0.22
19 Thailand .................................0.15
20 Mexico ..................................0.15
20 Austria ...................................0.09
21 Sweden .................................0.13
21 Mexico ..................................0.09
22 Finland...................................0.13
22 Saudi Arabia ..........................0.06
23 South Africa ..........................0.09
23 Ireland ...................................0.06
24 Poland ...................................0.08
24 Turkey....................................0.03
25 Norway..................................0.08
25 Norway..................................0.03
26 Thailand .................................0.02
26 Switzerland............................0.02
27 Hungary ................................0.02
27 Poland ...................................0.00
28 Czech Republic ......................0.01
28 Czech Republic......................0.00
29 Bahrain ..................................0.01
29 Indonesia...............................0.00
30 Brazil......................................0.01
29 Malaysia ................................0.00
31 Malaysia ................................0.01
31 Brazil .....................................0.00
32 Saudi Arabia ..........................0.01
n/a Argentina.................................n/a
33 Indonesia...............................0.00
n/a Bahrain ....................................n/a
34 Turkey....................................0.00
n/a Bangladesh..............................n/a
35 Chile ......................................0.00
n/a Chile ........................................n/a
36 Philippines.............................0.00
n/a China .......................................n/a
36 Romania ................................0.00
n/a Colombia .................................n/a
38 Colombia ...............................0.00
n/a Egypt .......................................n/a
n/a Argentina.................................n/a
n/a Hungary...................................n/a
n/a Bangladesh..............................n/a
n/a India.........................................n/a
n/a China .......................................n/a
n/a Israel........................................n/a
n/a Egypt .......................................n/a
n/a Jordan .....................................n/a
n/a Israel........................................n/a
n/a Kazakhstan ..............................n/a
n/a Jordan .....................................n/a
n/a Kuwait .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Morocco ..................................n/a
n/a Kuwait .....................................n/a
n/a Nigeria .....................................n/a
n/a Morocco ..................................n/a
n/a Pakistan...................................n/a
n/a Nigeria .....................................n/a
n/a Panama....................................n/a
n/a Pakistan...................................n/a
n/a Peru .........................................n/a
n/a Panama....................................n/a
n/a Philippines ...............................n/a
n/a Peru .........................................n/a
n/a Romania ..................................n/a
n/a Russian Federation..................n/a
n/a Russian Federation..................n/a
n/a Slovak Republic .......................n/a
n/a Slovak Republic .......................n/a
n/a Ukraine ....................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
6.08
Foreign exchange derivatives turnover: Currency swaps
Foreign exchange derivatives turnover: Options
This is the percentage share of the world total of over-the-counter foreign exchange currency swaps turnover | April 2007
RANK COUNTRY/ECONOMY
HARD DATA
1 United Kingdom ..................46.65
This is the percentage share of the world total of over-the-counter foreign exchange options turnover | April 2007
RANK COUNTRY/ECONOMY
HARD DATA
1 United Kingdom ..................42.39
2 United States ......................16.98
2 United States ......................29.95
3 Australia ................................5.55
3 Switzerland............................4.73
4 Canada ..................................4.20
4 Japan.....................................4.29
5 France ...................................3.64
5 Singapore ..............................4.01
6 Korea, Rep.............................3.15
6 Hong Kong SAR ....................2.28
7 Singapore ..............................3.05
7 France ...................................2.21
8 Japan.....................................2.71
8 Australia.................................1.85
9 Denmark ................................1.92
9 India .......................................1.52
10 Hong Kong SAR.....................1.64
10 Canada...................................1.04
11 Turkey ....................................1.46
11 Germany ...............................0.99
12 India .......................................1.25
12 Italy........................................0.74
13 Netherlands ...........................1.03
13 Sweden .................................0.69
14 Ireland....................................1.03
14 Belgium .................................0.60
15 Belgium .................................0.94
15 Denmark ...............................0.55
16 Brazil .....................................0.70
16 Austria ...................................0.31
17 Saudi Arabia ..........................0.69
17 Spain .....................................0.29
18 Austria ...................................0.49
18 Netherlands...........................0.26
19 Germany ...............................0.48
19 Korea, Rep. ...........................0.25
20 Spain .....................................0.34
20 Ireland ...................................0.18
21 Italy .......................................0.33
21 Israel......................................0.16
22 Indonesia...............................0.28
22 Poland....................................0.14
23 Thailand .................................0.28
23 Turkey....................................0.07
24 Switzerland............................0.20
24 Bahrain ..................................0.06
25 Poland....................................0.18
25 Hungary ................................0.06
26 Norway..................................0.14
26 Mexico ..................................0.05
27 Bahrain ..................................0.13
27 Finland...................................0.05
28 Finland...................................0.12
28 Indonesia...............................0.05
29 South Africa...........................0.10
29 Norway..................................0.04
30 Malaysia ................................0.10
30 Saudi Arabia ..........................0.04
31 Chile ......................................0.07
31 South Africa ..........................0.03
32 Sweden .................................0.05
32 Czech Republic......................0.03
33 Philippines.............................0.04
33 Slovak Republic .....................0.02
34 Mexico ..................................0.03
34 Brazil .....................................0.02
35 Colombia ...............................0.02
35 Thailand .................................0.01
35 Czech Republic......................0.02
36 Malaysia ................................0.01
37 Hungary ................................0.00
37 Russian Federation................0.01
n/a Argentina.................................n/a
38 Romania ................................0.00
n/a Bangladesh..............................n/a
39 Colombia ...............................0.00
n/a China .......................................n/a
40 Philippines.............................0.00
n/a Egypt .......................................n/a
41 Chile ......................................0.00
n/a Israel........................................n/a
n/a Argentina.................................n/a
n/a Jordan .....................................n/a
n/a Bangladesh..............................n/a
n/a Kazakhstan ..............................n/a
n/a China .......................................n/a
n/a Kuwait .....................................n/a
n/a Egypt .......................................n/a
n/a Morocco ..................................n/a
n/a Jordan .....................................n/a
n/a Nigeria .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Pakistan...................................n/a
n/a Kuwait .....................................n/a
n/a Panama....................................n/a
n/a Morocco ..................................n/a
n/a Peru .........................................n/a
n/a Nigeria .....................................n/a
n/a Romania ..................................n/a
n/a Pakistan...................................n/a
n/a Russian Federation..................n/a
n/a Panama....................................n/a
n/a Slovak Republic .......................n/a
n/a Peru .........................................n/a
n/a Ukraine ....................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
n/a Vietnam ...................................n/a
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
3: Data Tables | Financial markets
6.07
SOURCE: Bank for International Settlements, Triennial Central Bank
Survey, December 2007
355
3: Data Tables | Financial markets
6.09
6.10
Stock market turnover ratio
Stock market capitalization to GDP
This is the ratio of the value of total shares traded to average real market capitalization | 2008 or most recent year available
This indicator is the value of listed shares as a percentage of GDP | 2008 or most recent year available
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
356
HARD DATA
1 Hong Kong SAR ................603.48
2 United States.....................271.78
2 Switzerland........................320.42
3 Netherlands.......................252.24
3 South Africa ......................308.43
4 Sweden .............................212.36
4 Jordan ...............................208.85
5 Korea, Rep.........................194.35
5 Malaysia ............................180.29
6 Switzerland ........................187.73
6 Canada ...............................174.42
7 Spain .................................186.20
7 India...................................173.16
8 Singapore ..........................184.59
8 Singapore ..........................172.54
9 Germany............................168.95
9 Australia ............................162.57
10 Finland ...............................162.15
10 Israel ..................................157.82
11 Japan.................................159.69
11 Finland...............................148.77
12 France................................146.61
12 United States .....................147.76
13 Australia .............................141.23
13 Sweden..............................141.03
14 Norway..............................139.00
14 United Kingdom ................136.61
15 Hungary.............................136.66
15 Chile ..................................132.49
16 Saudi Arabia1 ......................131.98
16 Netherlands.......................129.86
17 Belgium .............................108.82
17 Spain .................................128.52
18 Denmark .............................99.05
18 Russian Federation............124.58
19 Kuwait .................................95.68
19 Morocco ............................123.98
20 Indonesia.............................82.48
20 Korea, Rep. ........................118.42
21 Turkey ..................................79.19
21 Brazil ..................................113.36
22 Hong Kong SAR1 .................78.87
22 France ................................112.32
23 Pakistan...............................78.37
23 Peru ...................................109.78
24 Malaysia ..............................78.35
24 Japan .................................102.30
25 Canada.................................74.55
25 Egypt..................................101.72
26 Austria .................................69.52
26 Norway ..............................100.14
27 Vietnam1 ..............................64.39
27 Ukraine.................................97.72
28 South Africa ........................59.62
28 Denmark ..............................91.66
29 United Arab Emirates..........53.81
29 Belgium ...............................88.18
30 Russian Federation ..............51.80
30 Saudi Arabia ........................85.56
31 Philippines...........................50.89
31 Philippines ...........................76.26
32 Brazil ...................................50.33
32 Thailand ...............................73.27
33 Czech Republic....................48.67
33 Germany .............................64.98
34 India ....................................45.81
34 Austria .................................63.53
35 Poland .................................45.40
35 Ireland .................................58.23
36 Morocco ..............................45.14
36 Colombia .............................56.12
37 Israel ...................................44.47
37 Indonesia.............................55.34
38 Thailand ...............................42.27
38 Kazakhstan ..........................52.23
39 Mexico .................................37.52
39 Mexico.................................51.46
40 Egypt...................................28.98
40 Poland ..................................51.10
41 Chile.....................................27.22
41 Italy .....................................50.59
42 Romania ..............................24.57
42 Pakistan ...............................45.10
43 Jordan .................................23.98
43 Czech Republic....................44.19
44 Nigeria1 ................................19.43
44 Turkey...................................37.88
45 Argentina.............................16.97
45 Hungary ...............................31.89
46 Peru .......................................6.53
46 Argentina.............................30.45
47 Colombia ...............................5.51
47 Panama ...............................28.86
48 Bahrain ..................................4.98
48 Romania ..............................25.12
49 Panama..................................1.42
49 Vietnam1 ..............................20.12
50 Ukraine ..................................1.18
50 Bangladesh ..........................11.09
51 Slovak Republic1 ....................0.43
51 Slovak Republic......................7.79
n/a Bangladesh..............................n/a
n/a Bahrain ....................................n/a
n/a China .......................................n/a
n/a China .......................................n/a
n/a Ireland .....................................n/a
n/a Kuwait .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Nigeria .....................................n/a
n/a United Kingdom ......................n/a
n/a United Arab Emirates ..............n/a
n/a Venezuela ................................n/a
n/a Venezuela ................................n/a
SOURCE: Thorsten Beck, Asli Demirgüç-Kunt, and Ross Levine. 2000. “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 1
HARD DATA
1 Italy ...................................348.21
2007
New Database on Financial Development and Structure.” World Bank Economic Review 14: 597–605. Updated May 2009 1
2007
6.12
Stock market value traded to GDP
Number of listed companies per 10,000 people
This is the total value of shares traded on stock market exchanges as a percentage of GDP | 2008
This is the number of publicly listed companies per 10,000 people | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
HARD DATA
1 Switzerland ........................541.19
1 Hong Kong SAR.....................1.30
2 United States ....................383.51
2 Canada ...................................1.19
3 Netherlands.......................344.42
3 Singapore...............................1.01
4 Finland...............................299.38
4 Australia ................................0.98
5 Spain .................................276.39
5 Israel .....................................0.96
6 Korea, Rep.........................276.03
6 Romania ................................0.81
7 Sweden .............................270.88
7 Spain .....................................0.80
8 Singapore ..........................238.14
8 Kuwait ...................................0.73
9 Australia ............................236.06
9 Bahrain ..................................0.50
10 South Africa .......................197.40
10 Jordan ...................................0.45
11 Saudi Arabia.......................178.12
11 Malaysia ................................0.39
12 Italy ....................................167.02
12 Korea, Rep. ...........................0.38
13 France................................159.01
13 United Kingdom ....................0.37
14 Japan.................................153.75
14 Japan.....................................0.35
15 Canada ..............................153.33
15 Switzerland............................0.34
16 Norway..............................146.78
16 Slovak Republic .....................0.25
17 India ...................................127.37
17 Sweden .................................0.25
18 Germany............................122.73
18 United Arab Emirates............0.22
19 Denmark .............................98.78
19 United States ........................0.17
20 Jordan .................................82.97
20 Chile ......................................0.14
21 Ireland .................................82.91
21 France....................................0.11
22 Israel ...................................79.53
22 Poland....................................0.11
23 Belgium ...............................78.18
23 South Africa ..........................0.09
24 Russian Federation..............66.37
24 Germany ...............................0.08
25 Turkey ..................................49.74
25 Kazakhstan ............................0.08
26 Pakistan...............................46.34
26 Thailand .................................0.07
27 Hungary ..............................44.21
27 Peru .......................................0.07
28 Austria .................................42.65
28 Ukraine..................................0.07
29 Thailand ...............................39.70
29 Panama .................................0.06
30 Egypt...................................39.02
30 Saudi Arabia ..........................0.06
31 Chile ....................................36.97
31 Italy .......................................0.05
32 Morocco..............................35.86
32 India ......................................0.04
33 Czech Republic ....................27.02
33 Turkey....................................0.04
34 Poland .................................25.43
34 Hungary ................................0.04
35 Vietnam ................................17.67
35 Egypt.....................................0.04
36 Mexico .................................17.25
36 Pakistan.................................0.04
37 Kazakhstan ..........................14.72
37 Czech Republic......................0.03
38 Peru .......................................9.96
38 Argentina...............................0.03
39 Romania.................................7.04
39 Philippines.............................0.03
40 Argentina...............................4.75
40 Morocco................................0.03
41 Colombia ...............................4.38
41 Brazil .....................................0.03
42 Ukraine ..................................1.87
42 Russian Federation................0.02
43 Panama .................................0.41
43 Venezuela ..............................0.02
44 Slovak Republic .....................0.04
44 Indonesia...............................0.02
n/a Bahrain ....................................n/a
45 Bangladesh ...........................0.02
n/a Bangladesh..............................n/a
46 Colombia ...............................0.02
n/a Brazil........................................n/a
47 Vietnam .................................0.02
n/a China .......................................n/a
48 Nigeria ...................................0.01
n/a Hong Kong SAR ......................n/a
49 China .....................................0.01
n/a Indonesia.................................n/a
50 Mexico...................................0.01
n/a Kuwait .....................................n/a
n/a Austria .....................................n/a
n/a Malaysia ..................................n/a
n/a Belgium ...................................n/a
n/a Nigeria .....................................n/a
n/a Denmark..................................n/a
n/a Philippines ...............................n/a
n/a Finland.....................................n/a
n/a United Arab Emirates ..............n/a
n/a Ireland .....................................n/a
n/a United Kingdom ......................n/a
n/a Netherlands.............................n/a
n/a Venezuela ................................n/a
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
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
3: Data Tables | Financial markets
6.11
357
3: Data Tables | Financial markets
358
6.13
6.14
Private domestic bond market capitalization to GDP
Public domestic bond market capitalization to GDP
This variable is the domestic debt securities issued by financial institutions and corporations as a share of GDP | 2009
This variable is the domestic debt securities issued by government as a share of GDP | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
HARD DATA
1 Denmark............................175.69
1 Japan.................................184.57
2 United States.....................114.60
2 Italy .....................................89.27
3 Spain ...................................88.21
3 Belgium ...............................61.75
4 Italy .....................................75.69
4 United States.......................61.73
5 Netherlands .........................74.99
5 Canada ................................59.71
6 Austria .................................60.66
6 France .................................58.51
7 Sweden ...............................60.49
7 Hungary ..............................54.93
8 Australia ..............................60.26
8 Netherlands.........................48.09
9 Belgium ...............................58.19
9 United Kingdom ..................46.25
10 France .................................54.43
10 Czech Republic....................45.97
11 Malaysia ..............................50.44
11 Singapore ............................45.36
12 Japan ...................................37.42
12 Brazil ...................................44.54
13 Germany ..............................37.40
13 Germany .............................43.79
14 Norway................................30.30
14 Malaysia ..............................43.20
15 Finland.................................29.27
15 Thailand ...............................42.61
16 Switzerland..........................29.08
16 Ireland .................................39.47
17 Canada ................................28.45
17 Poland .................................38.91
18 Brazil ...................................24.42
18 India ....................................36.99
19 Ireland .................................22.42
19 Turkey..................................36.45
20 China ...................................19.35
20 Spain ...................................36.32
21 Thailand ...............................19.32
21 Philippines...........................33.37
22 Chile ....................................19.04
22 Austria .................................32.09
23 Mexico .................................17.67
23 Venezuela ............................30.60
24 United Kingdom ...................17.58
24 Denmark .............................29.79
25 South Africa.........................16.30
25 China ...................................29.34
26 Singapore ............................14.43
26 Sweden ...............................28.85
27 Hong Kong SAR ..................14.18
27 Pakistan ...............................27.59
28 Czech Republic.....................11.54
28 Slovak Republic ...................26.10
29 Hungary .................................7.95
29 South Africa ........................25.92
30 Slovak Republic .....................5.87
30 Colombia .............................25.06
31 India ......................................4.45
31 Switzerland..........................23.72
32 Peru .......................................4.12
32 Mexico ................................22.80
33 Argentina...............................3.58
33 Hong Kong SAR...................21.81
34 Indonesia ...............................1.63
34 Norway................................19.00
35 Venezuela ..............................1.53
35 Australia ...............................17.24
36 Philippines .............................1.04
36 Argentina.............................16.22
37 Colombia ...............................0.41
37 Indonesia.............................14.72
38 Turkey....................................0.08
38 Peru .....................................12.42
39 Pakistan.................................0.00
39 Finland..................................11.12
39 Poland ...................................0.00
40 Chile ......................................9.89
39 Russian Federation ...............0.00
41 Russian Federation................3.95
n/a Bahrain ....................................n/a
n/a Bahrain ....................................n/a
n/a Bangladesh..............................n/a
n/a Bangladesh..............................n/a
n/a Egypt .......................................n/a
n/a Egypt .......................................n/a
n/a Israel........................................n/a
n/a Israel........................................n/a
n/a Jordan .....................................n/a
n/a Jordan .....................................n/a
n/a Kazakhstan ..............................n/a
n/a Kazakhstan ..............................n/a
n/a Korea, Rep...............................n/a
n/a Korea, Rep...............................n/a
n/a Kuwait .....................................n/a
n/a Kuwait .....................................n/a
n/a Morocco ..................................n/a
n/a Morocco ..................................n/a
n/a Nigeria .....................................n/a
n/a Nigeria .....................................n/a
n/a Panama....................................n/a
n/a Panama....................................n/a
n/a Romania ..................................n/a
n/a Romania ..................................n/a
n/a Saudi Arabia ............................n/a
n/a Saudi Arabia ............................n/a
n/a Ukraine ....................................n/a
n/a Ukraine ....................................n/a
n/a United Arab Emirates ..............n/a
n/a United Arab Emirates ..............n/a
n/a Vietnam ...................................n/a
n/a Vietnam ...................................n/a
SOURCES: Bank for International Settlements, Quarterly Review, June
2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation data from the IMF, World Economic Outlook Database (April 2010)
SOURCES: Bank for International Settlements, Quarterly Review, June
2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation data from the IMF, World Economic Outlook Database (April 2010)
6.16
Private international bonds to GDP
Public international bonds to GDP
This variable is the international debt securities issued by financial institutions and corporations as a share of GDP | 2009
This variable is the international debt securities issued by government as a share of GDP | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
SCORE
1 Ireland ...............................215.33
1 Panama ...............................34.09
2 Netherlands.......................149.31
2 Belgium ...............................29.39
3 United Kingdom ................134.38
3 Austria .................................28.48
4 Spain .................................109.88
4 Ireland .................................25.60
5 Switzerland..........................85.90
5 Finland.................................24.06
6 Belgium ...............................84.76
6 Hungary...............................19.45
7 Sweden ...............................79.55
7 Philippines ...........................15.32
8 Germany .............................78.97
8 Argentina .............................15.11
9 France ..................................67.40
9 Poland ..................................11.36
10 Austria .................................66.75
10 Italy ......................................11.03
11 Italy......................................51.65
11 Germany ...............................8.79
12 Australia...............................51.06
12 Venezuela ..............................8.26
13 Norway ................................47.00
13 Spain .....................................8.15
14 United States ......................45.28
14 Colombia................................7.46
15 Denmark .............................44.65
15 Slovak Republic......................7.44
16 Hong Kong SAR ..................34.17
16 Turkey.....................................7.37
17 Kazakhstan ..........................32.47
17 Peru........................................7.31
18 Canada ................................32.39
18 Canada ..................................6.83
19 Singapore ............................29.91
19 Sweden .................................6.17
20 Finland.................................28.43
20 Denmark................................6.01
21 United Arab Emirates..........28.41
21 Ukraine ..................................6.01
22 Bahrain ................................26.07
22 Mexico ..................................5.02
23 Malaysia ..............................16.22
23 Czech Republic......................4.49
24 Korea, Rep...........................13.84
24 Israel .....................................4.31
25 Hungary ...............................11.70
25 Bahrain ..................................3.45
26 Russian Federation..............10.05
26 Netherlands...........................3.33
27 South Africa ..........................8.48
27 Brazil .....................................3.33
28 Japan .....................................7.81
28 South Africa ..........................2.92
29 Philippines.............................6.59
29 Romania ................................2.71
30 Mexico ..................................6.12
30 Indonesia...............................2.57
31 Ukraine..................................6.06
31 United Arab Emirates............2.53
32 Israel .....................................5.61
32 Russian Federation................2.47
33 Chile ......................................5.53
33 France ....................................1.88
34 Brazil .....................................5.06
34 Vietnam .................................1.81
35 Czech Republic......................4.82
35 Egypt .....................................1.81
36 Panama .................................4.56
36 Australia.................................1.50
37 Venezuela ..............................3.76
37 Malaysia.................................1.35
38 India ......................................3.39
38 United Kingdom.....................1.33
39 Thailand .................................3.29
39 Chile ......................................1.26
40 Kuwait ...................................2.96
40 Pakistan .................................1.14
41 Saudi Arabia ..........................2.94
41 Hong Kong SAR ....................0.80
42 Indonesia...............................2.81
42 Morocco................................0.79
43 Peru .......................................2.55
43 Korea, Rep. ...........................0.70
44 Colombia ...............................2.08
44 Jordan ...................................0.62
45 Argentina...............................2.00
45 Thailand .................................0.29
46 Turkey ....................................1.91
46 Singapore ..............................0.20
47 Egypt .....................................1.82
47 Switzerland............................0.19
48 China .....................................0.86
48 China .....................................0.09
49 Poland ...................................0.73
49 Japan.....................................0.06
50 Slovak Republic .....................0.70
50 United States ........................0.05
51 Pakistan.................................0.38
51 Bangladesh ...........................0.00
52 Nigeria...................................0.32
51 India ......................................0.00
53 Vietnam .................................0.30
51 Kazakhstan............................0.00
54 Bangladesh ...........................0.00
51 Kuwait ...................................0.00
54 Jordan ...................................0.00
51 Nigeria...................................0.00
54 Morocco................................0.00
51 Norway .................................0.00
54 Romania ................................0.00
51 Saudi Arabia ..........................0.00
SOURCES: Bank for International Settlements, Quarterly Review, June
2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation data from the IMF, World Economic Outlook Database (April 2010)
SOURCES: Bank for International Settlements, Quarterly Review, June
2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation data from the IMF, World Economic Outlook Database (April 2010)
3: Data Tables | Financial markets
6.15
359
3: Data Tables | Financial markets
6.17 Local currency corporate bond issuance to GDP This is investment grade and high-yield issuance corporate bonds as a share of GDP | 2009
RANK COUNTRY/ECONOMY
SCORE
1 Thailand .................................3.71 2 United States ........................3.51 3 France ...................................3.36 4 Switzerland............................3.12 5 China .....................................3.08 6 Netherlands ...........................3.01 7 Germany ...............................2.98 8 Finland...................................2.79 9 Malaysia ................................2.36 10 Austria...................................2.00 11 Philippines .............................1.94 12 Russian Federation ................1.93 13 Chile ......................................1.89 14 Canada...................................1.84 15 Spain......................................1.68 16 Japan .....................................1.55 17 Belgium .................................1.55 18 Italy........................................1.50 19 United Kingdom.....................1.46 20 Pakistan .................................1.38 21 Singapore ..............................1.23
360
22 Ireland ...................................0.95 23 Kazakhstan ............................0.71 24 Saudi Arabia ..........................0.70 25 India ......................................0.66 26 Colombia ...............................0.61 27 Mexico ..................................0.50 28 Vietnam .................................0.50 29 Sweden .................................0.34 30 Norway..................................0.32 31 Australia ................................0.24 32 Morocco................................0.21 33 Czech Republic ......................0.17 34 Brazil......................................0.16 35 Peru .......................................0.15 36 Indonesia ...............................0.11 37 South Africa ..........................0.04 38 Argentina...............................0.02 39 Ukraine..................................0.00 40 Poland ...................................0.00 n/a Bahrain ....................................n/a n/a Bangladesh..............................n/a n/a Denmark..................................n/a n/a Egypt .......................................n/a n/a Hong Kong SAR ......................n/a n/a Hungary...................................n/a n/a Israel........................................n/a n/a Jordan .....................................n/a n/a Korea, Rep...............................n/a n/a Kuwait .....................................n/a n/a Nigeria .....................................n/a n/a Panama....................................n/a n/a Romania ..................................n/a n/a Slovak Republic .......................n/a n/a Turkey ......................................n/a n/a United Arab Emirates ..............n/a n/a Venezuela ................................n/a SOURCES: Dealogic Analytics, data retrieved July 2010; GDP data from
the IMF, World Economic Outlook Database (April 2010)
Data Tables
Section VII Financial access
3: Data Tables | Financial access
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] | 2009â&#x20AC;&#x201C;10 weighted average
In your country, how difficult is it for entrepreneurs with innovative but risky projects to find venture capital? [1 = impossible; 7 = very easy] | 2009â&#x20AC;&#x201C;10 weighted average
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 5.07
1 Switzerland............................6.56
362
7
SCORE
2 United Kingdom ....................6.55
2 Norway..................................4.31
3 Canada ..................................6.53
3 Singapore ..............................4.21
4 Hong Kong SAR ....................6.44
4 Finland...................................4.19
5 South Africa ..........................6.42
5 Sweden .................................4.00
6 Sweden .................................6.36
6 Malaysia ................................3.91
7 France ...................................6.21
7 Indonesia...............................3.86
8 Norway..................................6.15
8 Israel .....................................3.86
9 Singapore ..............................6.13
9 Australia ................................3.83
10 Australia ................................6.13
10 United States ........................3.81
11 Finland ...................................6.10
11 Saudi Arabia ..........................3.81
12 Netherlands ...........................6.10
12 United Arab Emirates............3.72
13 Brazil .....................................6.04
13 Netherlands...........................3.71
14 United States ........................5.99
14 Bahrain ..................................3.69
15 Germany ...............................5.99
15 Canada ..................................3.65
16 Panama .................................5.96
16 Switzerland............................3.46
17 Belgium .................................5.87
17 Kuwait ...................................3.40
18 Chile ......................................5.86
18 Belgium .................................3.34
19 Israel .....................................5.80
19 China .....................................3.33
20 Denmark ...............................5.72
20 Panama .................................3.31
21 Spain .....................................5.65
21 Denmark ...............................3.30
22 Austria ...................................5.63
22 India ......................................3.25
23 Bahrain ..................................5.46
23 France ...................................3.23
24 Malaysia ................................5.42
24 Chile ......................................3.16
25 Saudi Arabia ..........................5.26
25 United Kingdom ....................3.02
26 India ......................................5.20
26 South Africa...........................3.01
27 United Arab Emirates ............5.17
27 Morocco................................3.00
28 Japan .....................................5.10
28 Egypt.....................................2.98
29 Thailand .................................5.07
29 Peru .......................................2.95
30 Ireland ...................................5.04
30 Austria ...................................2.93
31 Turkey....................................5.00
31 Thailand .................................2.90
32 Peru .......................................4.79
32 Japan.....................................2.83
33 Slovak Republic .....................4.77
33 Pakistan.................................2.81
34 Czech Republic......................4.67
34 Germany ...............................2.78
35 Jordan ...................................4.66
35 Jordan ...................................2.72
36 Hungary ................................4.65
36 Poland ...................................2.68
37 Mexico ..................................4.62
37 Vietnam .................................2.67
38 Indonesia...............................4.62
38 Spain .....................................2.64
39 Philippines.............................4.53
39 Brazil .....................................2.61
40 Kuwait ...................................4.52
40 Slovak Republic .....................2.61
41 Morocco................................4.50
41 Czech Republic......................2.59
42 Colombia ...............................4.46
42 Colombia ...............................2.54
43 Poland ...................................4.43
43 Philippines.............................2.46
44 Italy .......................................4.39
44 Romania ................................2.42
45 Korea, Rep. ...........................4.24
45 Kazakhstan ............................2.39
46 China .....................................4.16
46 Ireland ...................................2.30
47 Nigeria...................................4.02
47 Russian Federation................2.26
48 Romania ................................3.91
48 Mexico ..................................2.25
49 Pakistan.................................3.87
49 Bangladesh ...........................2.25
50 Egypt.....................................3.86
50 Korea, Rep. ...........................2.24
51 Vietnam .................................3.76
51 Turkey....................................2.23
52 Russian Federation................3.62
52 Italy........................................2.16
53 Kazakhstan ............................3.57
53 Hungary.................................2.15
54 Venezuela ..............................3.50
54 Venezuela ..............................1.96
55 Argentina...............................3.42
55 Nigeria ...................................1.96
56 Bangladesh ...........................3.23
56 Ukraine ..................................1.95
57 Ukraine..................................3.09
57 Argentina ...............................1.90
SOURCE: World Economic Forum, Executive Opinion Survey
1
MEAN: 3.02
1 Hong Kong SAR ....................4.44
SOURCE: World Economic Forum, Executive Opinion Survey
7
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] | 2009â&#x20AC;&#x201C;10 weighted average
Raising money by issuing shares on the stock market in your country is [1 = impossible; 7 = very easy] | 2009â&#x20AC;&#x201C;10 weighted average
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 3.06
1 Indonesia ............................4.32
7
SCORE
MEAN: 3.89
7
1 Hong Kong SAR..................5.16
2 China ..................................4.26
2 Saudi Arabia........................4.84
3 Malaysia..............................4.22
3 Singapore ...........................4.78
4 Saudi Arabia........................4.18
4 France.................................4.78
5 Egypt ..................................4.15
5 South Africa........................4.72
6 Panama...............................4.05
6 Canada................................4.71
7 Peru ....................................4.05
7 India....................................4.69
8 Vietnam...............................4.01
8 Malaysia..............................4.67
9 Philippines ..........................3.94
9 Bangladesh .........................4.63
10 Brazil...................................3.91
10 Indonesia ............................4.60
11 Bangladesh .........................3.86
11 Australia..............................4.59
12 Bahrain ...............................3.82
12 Norway ...............................4.57
13 Morocco .............................3.72
13 Chile ...................................4.43
14 Turkey .................................3.64
14 Sweden ..............................4.43
15 Japan ..................................3.62
15 Switzerland .........................4.41
16 India....................................3.59
16 Japan ..................................4.39
17 Czech Republic ...................3.55
17 United Arab Emirates .........4.27
18 Thailand ..............................3.54
18 Thailand ..............................4.25
19 Singapore ...........................3.50
19 Egypt ..................................4.24
20 Colombia ............................3.41
20 Panama...............................4.22
21 Hong Kong SAR..................3.37
21 Morocco .............................4.17
22 Pakistan ..............................3.36
22 United Kingdom..................4.09
23 Korea, Rep..........................3.35
23 Jordan.................................4.09
24 Finland ................................3.28
24 Vietnam ..............................4.07
25 Slovak Republic ..................3.23
25 United States .....................4.07
26 United Arab Emirates .........3.23
26 Israel...................................4.02
27 Chile....................................3.19
27 Czech Republic ...................3.97
28 Switzerland .........................3.12
28 Nigeria ................................3.96
29 Israel ...................................3.10
29 Kuwait.................................3.94
30 Jordan.................................3.00
30 Pakistan ..............................3.94
31 Poland.................................2.89
31 Brazil...................................3.92
32 Norway ...............................2.83
32 Turkey .................................3.92
33 Italy.....................................2.82
33 Finland ................................3.89
34 Sweden ..............................2.81
34 Germany .............................3.88
35 Australia..............................2.75
35 Bahrain ...............................3.86
36 Kuwait.................................2.67
36 China ..................................3.85
37 United States .....................2.67
37 Philippines ..........................3.81
38 Canada................................2.66
38 Austria.................................3.76
39 Venezuela ...........................2.65
39 Korea, Rep..........................3.75
40 Russian Federation .............2.60
40 Denmark .............................3.74
41 Nigeria ................................2.58
41 Netherlands ........................3.72
42 Austria ................................2.57
42 Peru ....................................3.71
43 Romania .............................2.56
43 Poland.................................3.70
44 South Africa........................2.53
44 Belgium ..............................3.61
45 Belgium ..............................2.51
45 Colombia ............................3.46
46 Mexico................................2.50
46 Italy.....................................3.46
47 Kazakhstan .........................2.42
47 Spain...................................3.31
48 Argentina ............................2.40
48 Romania..............................3.10
49 Germany .............................2.35
49 Mexico ................................3.01
50 France.................................2.27
50 Ireland .................................2.76
51 Denmark .............................2.13
51 Kazakhstan .........................2.75
52 Netherlands ........................2.10
52 Russian Federation .............2.74
53 Hungary..............................2.00
53 Slovak Republic ..................2.59
54 Ukraine................................1.88
54 Hungary ..............................2.59
55 United Kingdom ..................1.83
55 Argentina ............................2.38
56 Ireland .................................1.46
56 Ukraine ...............................2.35
57 Spain ...................................1.44
57 Venezuela ...........................2.13
SOURCE: World Economic Forum, Executive Opinion Survey
1
3: Data Tables | Financial access
7.03
SOURCE: World Economic Forum, Executive Opinion Survey
363
3: Data Tables | Financial access
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] | 2009–10 weighted average
This variable is comprised of equity capital, reinvested earnings, and intra-company loans | 2008
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
SCORE
1
MEAN: 3.18
1 Bahrain ..................................4.86
364
7
HARD DATA
1 Hong Kong SAR ..................29.90
2 Singapore ..............................4.50
2 Kazakhstan ..........................13.31
3 Finland...................................4.45
3 Singapore ............................12.83
4 Saudi Arabia ..........................4.39
4 Belgium ...............................12.69
5 Norway..................................4.39
5 Nigeria..................................11.69
6 United Arab Emirates............4.28
6 Sweden ...............................10.77
7 Hong Kong SAR ....................4.25
7 Chile ....................................10.38
8 Malaysia ................................4.21
8 Saudi Arabia ........................10.34
9 Sweden .................................4.20
9 Panama .................................9.72
10 Indonesia...............................3.98
10 Ukraine..................................9.20
11 Panama .................................3.97
11 Bahrain ..................................8.87
12 Australia ................................3.92
12 Vietnam .................................8.71
13 Belgium .................................3.90
13 Jordan ...................................8.52
14 Netherlands...........................3.69
14 Romania ................................8.24
15 Switzerland............................3.66
15 United Arab Emirates............5.96
16 Chile ......................................3.65
16 Russian Federation................5.72
17 Canada ..................................3.64
17 Czech Republic......................5.51
18 Kuwait ...................................3.62
18 Egypt.....................................5.05
19 Denmark ...............................3.55
19 Hungary ................................5.03
20 Thailand .................................3.44
20 Israel .....................................4.95
21 United States ........................3.39
21 Australia ................................4.69
22 France ...................................3.35
22 Colombia ...............................4.62
23 Peru .......................................3.33
23 Spain .....................................4.48
24 India ......................................3.29
24 United Kingdom ....................4.44
25 Pakistan.................................3.26
25 France ...................................4.39
26 South Africa ..........................3.23
26 Malaysia ................................4.21
27 Austria ...................................3.20
27 Slovak Republic .....................3.87
28 Slovak Republic .....................3.19
28 Poland ...................................3.84
29 Morocco ................................3.13
29 Thailand .................................3.82
30 Japan.....................................3.09
30 Peru .......................................3.79
31 Czech Republic......................3.08
31 Austria ...................................3.55
32 Egypt.....................................3.03
32 Denmark ...............................3.53
33 China .....................................2.98
33 Switzerland............................3.52
34 Jordan ...................................2.97
34 India ......................................3.36
35 Israel .....................................2.93
35 Canada ..................................3.35
36 Philippines.............................2.92
36 Pakistan.................................3.27
37 Poland ...................................2.87
37 South Africa...........................3.14
38 Colombia ...............................2.86
38 Turkey....................................2.96
39 Brazil .....................................2.82
39 Brazil .....................................2.86
40 Germany ...............................2.78
40 Argentina...............................2.86
41 Vietnam .................................2.70
41 Morocco................................2.63
42 United Kingdom ....................2.68
42 Mexico ..................................2.51
43 Turkey....................................2.57
43 United States ........................2.22
44 Romania ................................2.56
44 China .....................................2.21
45 Bangladesh ...........................2.55
45 Indonesia ...............................1.47
46 Spain .....................................2.50
46 Bangladesh ............................1.15
47 Hungary ................................2.50
47 Philippines.............................0.94
48 Mexico ..................................2.36
48 Korea, Rep. ...........................0.91
49 Russian Federation................2.28
49 Italy .......................................0.80
50 Italy........................................2.19
50 Germany ................................0.74
51 Venezuela ..............................2.13
51 Venezuela ..............................0.51
52 Ireland....................................2.11
52 Japan.....................................0.48
53 Korea, Rep.............................2.11
53 Kuwait ...................................0.05
54 Kazakhstan ............................2.09
54 Norway................................–0.02
55 Nigeria...................................2.00
55 Netherlands.........................–0.44
56 Ukraine ..................................1.94
56 Finland..................................–1.76
57 Argentina ...............................1.72
57 Ireland ..................................-8.79
SOURCE: World Economic Forum, Executive Opinion Survey
SOURCES: United Nations Conference on Trade and Development, 2010;
GDP data from the IMF, World Economic Outlook Database (April 2010)
7.08
Market penetration of bank accounts
Commercial bank branches
This is the number of commercial bank accounts per 100,000 adults | 2009
This is the number of commercial bank branches per 100,000 adults | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
HARD DATA
1 Japan ...........................717,241.60
1 Ireland ..................................57.27
2 Belgium......................396,895.40
2 Italy .....................................52.04
3 Ukraine .......................314,532.30
3 Belgium ...............................48.49
4 United Kingdom .........292,325.40
4 Denmark .............................45.36
5 Austria ........................240,270.80
5 France .................................43.21
6 Singapore ...................223,624.70
6 Spain ...................................38.19
7 Ireland ........................218,184.50
7 United States ......................36.33
8 Malaysia .....................206,332.80
8 Romania ..............................35.00
9 Hungary ......................205,827.10
9 Norway................................34.49
10 United States .............202,189.20
10 Poland .................................32.21
11 Slovak Republic ..........185,782.70
11 Australia...............................31.86
12 Netherlands ................176,579.20
12 Austria..................................27.54
13 United Arab Emirates .175,064.50
13 Slovak Republic ...................26.64
14 Czech Republic ...........173,925.70
14 Sweden ...............................25.87
15 Turkey .........................166,120.70
15 Netherlands.........................25.36
16 Poland .........................162,641.10
16 Canada.................................24.11
17 Thailand ......................144,883.80
17 Czech Republic ....................22.17
18 Colombia.....................126,743.70
18 Hong Kong SAR...................21.19
19 Venezuela ...................124,638.90
19 United Arab Emirates..........20.85
20 Mexico........................109,676.30
20 United Kingdom...................20.74
21 Brazil...........................106,535.40
21 Israel....................................19.85
22 Israel...........................105,570.80
22 Panama ...............................18.52
23 Argentina......................90,628.79
23 Hungary...............................18.31
24 Jordan ..........................89,880.90
24 Jordan ..................................17.79
25 South Africa..................83,913.41
25 Turkey...................................17.77
26 Peru ..............................78,336.68
26 Kuwait .................................16.47
27 Spain .............................78,047.07
27 Germany..............................15.91
28 Italy ...............................77,499.24
28 Chile ....................................14.92
29 France ...........................77,198.72
29 Mexico ................................14.67
30 India ..............................74,729.30
30 Colombia .............................14.30
31 Chile .............................72,975.51
31 Argentina.............................13.20
32 Indonesia ......................50,474.06
32 Brazil....................................12.71
33 Philippines ....................49,910.37
33 Japan...................................12.46
34 Nigeria...........................46,121.01
34 Korea, Rep...........................12.27
35 Panama.........................41,192.18
35 Philippines............................11.81
36 Bangladesh ...................31,667.14
36 Malaysia ...............................11.44
37 Morocco........................26,527.85
37 Thailand................................11.04
38 Pakistan........................22,949.28
38 Singapore ............................10.54
n/a Australia ..................................n/a
39 India .....................................10.11
n/a Bahrain ....................................n/a
40 Morocco................................9.92
n/a Canada ....................................n/a
41 Pakistan.................................8.68
n/a China .......................................n/a
42 South Africa ..........................8.00
n/a Denmark..................................n/a
43 Indonesia................................7.74
n/a Egypt .......................................n/a
44 Peru........................................7.31
n/a Finland.....................................n/a
45 Nigeria...................................6.42
n/a Germany..................................n/a
46 Bangladesh............................5.16
n/a Hong Kong SAR ......................n/a
47 Vietnam .................................3.21
n/a Kazakhstan ..............................n/a
48 Kazakhstan ............................2.79
n/a Korea, Rep...............................n/a
49 Ukraine ..................................2.74
n/a Kuwait .....................................n/a
50 Russian Federation................2.62
n/a Norway....................................n/a
51 China .....................................0.00
n/a Romania ..................................n/a
51 Finland...................................0.00
n/a Russian Federation..................n/a
51 Switzerland ...........................0.00
n/a Saudi Arabia ............................n/a
51 Venezuela..............................0.00
n/a Sweden ...................................n/a
n/a Bahrain ....................................n/a
n/a Switzerland..............................n/a
n/a Egypt .......................................n/a
n/a Vietnam ...................................n/a
n/a Saudi Arabia ............................n/a
SOURCE: Consultative Group to Assist the Poor (CGAP). 2010. “Financial
Access 2010,” Washington, DC: CGAP
SOURCE: Consultative Group to Assist the Poor (CGAP). 2010. “Financial
Access 2010,” Washington, DC: CGAP
3: Data Tables | Financial access
7.07
365
3: Data Tables | Financial access
7.09
7.10
Total number of ATMs
Total number of point of sale (POS) devices
This is the total number of ATMs per 100,000 adults | 2009
This is the total number of POSs per 100,000 adults | 2009
RANK COUNTRY/ECONOMY
RANK COUNTRY/ECONOMY
HARD DATA
1 Canada ..............................218.55
366
HARD DATA
1 Austria .............................4,174.11
2 United States ....................175.69
2 Australia .........................4,039.64
3 Australia ............................156.69
3 Spain ...............................3,711.27
4 Spain..................................154.76
4 Turkey.............................3,232.79
5 Belgium .............................138.32
5 Norway ...........................3,014.45
6 United Kingdom ................122.84
6 Canada ...........................2,556.01
7 Austria ...............................118.86
7 France ............................2,456.92
8 Germany ............................112.18
8 Netherlands....................2,343.41
9 Brazil ..................................112.06
9 United Kingdom .............2,330.70
10 France................................105.27
10 Ireland ............................2,258.04
11 Israel..................................104.33
11 Brazil ...............................2,247.41
12 United Arab Emirates..........99.27
12 Singapore .......................2,091.42
13 Italy ......................................97.81
13 Italy.................................2,091.02
14 Ireland..................................95.74
14 Switzerland.....................1,985.35
15 Switzerland..........................93.06
15 Belgium ..........................1,193.42
16 Russian Federation..............76.51
16 Malaysia .........................1,063.09
17 Ukraine ................................71.34
17 Kuwait ............................1,040.14
18 Thailand ...............................71.32
18 Czech Republic..................868.98
19 Netherlands.........................64.14
19 Germany ...........................836.53
20 Chile ....................................58.74
20 Hungary .............................831.30
21 Norway................................56.85
21 Slovak Republic .................713.06
22 Hungary ..............................55.62
22 Poland ...............................666.71
23 Malaysia ..............................53.99
23 Mexico ..............................592.14
24 Kuwait .................................53.42
24 Romania ............................540.33
25 Romania ..............................53.21
25 Chile ..................................486.07
26 South Africa ........................52.41
26 Colombia ...........................441.06
27 Kazakhstan ..........................52.10
27 Russian Federation............293.05
28 Singapore ............................49.83
28 Ukraine ...............................187.17
29 Slovak Republic ...................49.34
29 Kazakhstan ........................170.86
30 Poland..................................49.14
30 Indonesia ............................117.89
31 Mexico ................................44.80
31 Morocco..............................89.93
32 Turkey..................................44.25
32 India .....................................67.06
33 Panama ...............................40.56
33 Finland.................................64.29
34 Czech Republic....................39.91
34 Peru .....................................53.96
35 Finland.................................38.31
35 Pakistan...............................48.98
36 Argentina.............................36.85
n/a Argentina.................................n/a
37 Sweden ...............................36.63
n/a Bahrain ....................................n/a
38 Colombia .............................29.56
n/a Bangladesh..............................n/a
39 Venezuela ............................28.19
n/a China .......................................n/a
40 Jordan .................................26.27
n/a Denmark..................................n/a
41 Peru .....................................22.26
n/a Egypt .......................................n/a
42 Morocco ..............................18.63
n/a Hong Kong SAR ......................n/a
43 Indonesia.............................14.44
n/a Israel........................................n/a
44 Philippines ...........................14.25
n/a Japan .......................................n/a
45 India .......................................7.29
n/a Jordan .....................................n/a
46 Pakistan.................................4.06
n/a Korea, Rep...............................n/a
n/a Bahrain ....................................n/a
n/a Nigeria .....................................n/a
n/a Bangladesh..............................n/a
n/a Panama....................................n/a
n/a China .......................................n/a
n/a Philippines ...............................n/a
n/a Denmark..................................n/a
n/a Saudi Arabia ............................n/a
n/a Egypt .......................................n/a
n/a South Africa.............................n/a
n/a Hong Kong SAR ......................n/a
n/a Sweden ...................................n/a
n/a Japan .......................................n/a
n/a Thailand ...................................n/a
n/a Korea, Rep...............................n/a
n/a United Arab Emirates ..............n/a
n/a Nigeria .....................................n/a
n/a United States ..........................n/a
n/a Saudi Arabia ............................n/a
n/a Venezuela ................................n/a
n/a Vietnam ...................................n/a
n/a Vietnam ...................................n/a
SOURCE: Consultative Group to Assist the Poor (CGAP). 2010. “Financial
Access 2010,” Washington, DC: CGAP
SOURCE: Consultative Group to Assist the Poor (CGAP). 2010. “Financial
Access 2010,” Washington, DC: CGAP
Microfinance institution (MFI) borrowersâ&#x20AC;&#x2122; penetration rate This is the total number of borrowers from microfinance institutions (MFIs) as a percentage of countryâ&#x20AC;&#x2122;s poor population | 2007
RANK COUNTRY/ECONOMY
HARD DATA
3: Data Tables | Financial access
7.11
1 Bangladesh ..........................41.22 2 Vietnam ...............................29.03 3 Morocco..............................22.64 4 Mexico ................................20.96 5 Indonesia.............................19.66 6 Peru ......................................17.60 7 Chile ....................................15.34 8 Jordan .................................12.45 9 Philippines............................11.03 10 Malaysia .................................7.77 11 Egypt......................................7.16 12 Colombia ...............................6.46 13 India ......................................4.80 14 South Africa...........................4.10 15 Kazakhstan ............................3.37 16 Nigeria...................................3.00 17 Pakistan.................................2.61 18 Brazil ......................................1.62 19 Panama..................................1.56 20 Romania ................................0.97 21 Argentina...............................0.81 22 Ukraine..................................0.64 23 Venezuela ..............................0.62 24 Russian Federation................0.54 25 Poland ...................................0.25 26 China .....................................0.19 27 Korea, Rep. ...........................0.07 28 Thailand .................................0.06 29 Turkey....................................0.03 n/a Australia ..................................n/a n/a Austria .....................................n/a n/a Bahrain ....................................n/a n/a Belgium ...................................n/a n/a Canada ....................................n/a n/a Czech Republic........................n/a n/a Denmark..................................n/a n/a Finland.....................................n/a n/a France......................................n/a n/a Germany..................................n/a n/a Hong Kong SAR ......................n/a n/a Hungary...................................n/a n/a Ireland .....................................n/a n/a Israel........................................n/a n/a Italy..........................................n/a n/a Japan .......................................n/a n/a Kuwait .....................................n/a n/a Netherlands.............................n/a n/a Norway....................................n/a n/a Saudi Arabia ............................n/a n/a Singapore ................................n/a n/a Slovak Republic .......................n/a n/a Spain .......................................n/a n/a Sweden ...................................n/a n/a Switzerland..............................n/a n/a United Arab Emirates ..............n/a n/a United Kingdom ......................n/a n/a United States ..........................n/a SOURCE: Microfinance Information Exchange, Inc. (MIX). September
2007
367
Technical Notes and Sources
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 2010. 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 economies 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 1.01 Capital account liberalization This index measures the degree of capital account liberalization within a country, standardized on a 1–7 (most liberalized) scale | 2008 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 this Financial Development Index, and standardized the scores on a scale from 1 to 7. Source: Menzie Chinn and Hiro Ito. 2010. “Financial Openness Index.” Dataset available at http://www.ssc.wisc.edu/~mchinn/ research.html. Interaction results from World Economic Forum analysis.
1.03 Domestic financial sector liberalization This index measures the degree of domestic financial sector liberalization within a country, standardized on a 1–7 (most liberalized) scale | 2009 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 represented in the FDI 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 this Financial Development Index, and standardized the scores on a scale from 1 to 7. 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: IMF. Updated as of 2009 based on World Economic Forum analysis.
1.18 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 | 2009 This 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 2009
1.19 Strength of legal rights index 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 or most recent year available 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
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 | 2009 This index includes eight features related to legal rights in collateral law and two features in bankruptcy law. Source: The World Bank, Doing Business 2010
1.20 Central bank transparency This index measures the degree of transparency that exists in a central bank’s policy actions. The index ranges from 0 to 15, with higher scores indicating that a central bank operates with greater transparency | 2009 This index is the sum of scores for answers to 15 questions assessing transparency along five dimensions: politics, economics, procedure, policy, and operations. Questions are taken from methodology created by Nergiz Dincer and Barry Eichengreen in “Central Bank Transparency: Where, Why, and to What Effect?” (2007); updated by Pierre L. Siklos. 2010. “Central Bank Transparency: An Updated Look.” Applied Economics Letters (forthcoming). All euro zone countries, except the Slovak Republic, are assigned the score of the European Central Bank. Source: Pierre L. Siklos. 2010. “Central Bank Transparency: An Updated Look.” Applied Economics Letters (forthcoming).
369
Technical Notes and Sources
1.24 Time to enforce a contract This variable is the time in days to resolve a dispute related to a contract | 2009 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 2010
1.25 Number of procedures to enforce a contract This variable is the number of procedures from the moment the plaintiff files a lawsuit in court until the moment of payment | 2009 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 World Bankâ&#x20AC;&#x2122;s 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 2010
1.26 Strength of investor protection index
370
This index assesses the strength of investor protection on a 0-to-10 (best) scale | 2009 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 2010
1.27 Cost of enforcing contracts This variable is the cost of enforcing contracts as a percentage of legal claim | 2009 This variable is recorded as a percentage of the legal 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. Source: The World Bank, Doing Business 2010
Section II: Business environment
2.09 Marginal tax variation This is the 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 | 2010 The top tax rate on corporate income in a country is compiled by the Heritage Foundation from Ernst &Young, Deloitte, the IMF, investment agencies, and governmental sources. The profit tax rate is based on the taxes and mandatory contributions payable by a medium-sized company in its second year of operation. To make the data comparable across countries, several assumptions about the business are used. These include that the business is a limited liability, and that it is a taxable company with a gross margin (pretax) of 20 percent and a turnover of 1,050 times income per capita. Sources: Top tax rate data from the Heritage Foundation, 2010 Index of Economic Freedom; profit tax data from The World Bank, Doing Business 2010
2.10 Time to pay taxes This is the 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 2010
2.13 Internet users This variable is Internet users per 100 inhabitants | 2008 Internet users are people with access to the worldwide network. Sources: International Telecommunication Union, World Telecommunication Indicators 2009; national sources
2.14 Broadband Internet subscribers This variable is the total broadband Internet subscribers per 100 inhabitants | 2008 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. Sources: International Telecommunication Union, World Telecommunication Indicators 2009; national sources
2.06 Tertiary enrollment This variable is the gross tertiary enrollment rate | 2009 or most recent 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. Sources: UNESCO Institute for Statistics (retrieved August 24, 2010); The World Bank, World Development Indicators 2010; national sources
2.15 Telephone lines This variable is the number of main telephone lines per 100 inhabitants | 2008 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. Sources: International Telecommunication Union, World Telecommunication Indicators 2009; national sources
This indicator is the number of mobile cellular telephone subscribers per 100 inhabitants | 2008 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. Sources: International Telecommunication Union, World Telecommunication Indicators 2009; national sources
2.21 Time to register property This variable is the time in days to register property | 2009 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
2.16 Mobile telephone subscribers
Source: The World Bank, Doing Business 2010
2.17 Cost of starting a business This indicator is the cost of starting a business as a percentage of income per capita | 2009 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 2010
2.18 Cost of registering property
2.22 Time to close a business This variable is the time in years to close a business | 2009 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 2010
Section III: Financial stability 3.01 Change in real effective exchange rate (REER) This is the average percentage change in real effective exchange rate from year to year over the period 2005–09. Higher REER represents appreciation | As of 2009
This variable is the cost of registering property as a percentage of income per capita | 2009 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.
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 2010
Source: Moody’s Country Credit Statistical Handbook (May 2010)
2.19 Cost of closing a business This variable is the cost of closing a business as a percentage of the estate | 2009 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 2010
2.20 Time to start a business This variable is the time in days to start a business | 2009 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 2010
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 | 2009 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 Country Credit Statistical Handbook (May 2010)
3.03 Current account balance to GDP This variable is the three-year average of current account balance to GDP provides an indicator of the difficulty a country might have in mobilizing the foreign exchange necessary for debt service | 2007-2009 Balance of payments data are based upon the methodology of the 5th edition of the IMF’s Balance of Payments Manual (1993). Source: IMF, World Economic Outlook Database (April 2010)
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 | 2009 This variable is foreign-currency deposits in domestic banks / official foreign-exchange reserves + foreign assets of domestic banks (%). Source: Moody’s Country Credit Statistical Handbook (May 2010)
371
Technical Notes and Sources
3.05 External debt to GDP (developing economies) This variable is the external debt as a percentage of GDP | 2009 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 Country Credit Statistical Handbook (May 2010)
3.06 Net international investment position to GDP
3.11 Tier 1 capital ratio This is the weighted average Tier 1 regulatory capital ratio at the 10 largest banks | 2009 or most recent available This ratio is calculated based on the weighted average of assets held by the top 10 bank holding and holding companies, commercial banks, cooperative banks, Islamic banks, savings banks, and specialized governmental credit institutions in each country. The ratio is excluded for countries in which data are not available for the majority of the top 10 banks by assets. Source: BankScope database, data retrieved July 2010
(advanced economies) This variable is the net international investment position as a percentage of GDP | 2009 For advanced economies only, this variable measures the role they play in the international movement of capital. The estimate is based on the difference between the market value of an economy’s foreign assets and that of its liabilities relative to GDP. Source: Moody’s Country Credit Statistical Handbook (May 2010)
3.07 Frequency of banking crises This variable is calculated based on the number of banking crises that countries experienced from 1970 to 2010. Recent crises are weighted more heavily | As of 2010 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 neither fully nor borderline systemic in nature. Source: Luc Laeven and Fabian Valencia. 2008. “Systemic Banking Crises: A New Database.” IMF Working Paper 08/224, Washington, DC: IMF. Updated June 2010. All weighting is based on World Economic Forum analysis.
372
3.08 Financial strengths indicator This is the weighted average financial strength rating by bank assets | 2010 This indicator is a measure of a country’s banks’ ability to meet obligations to depositors and other creditors as viewed by specialized analysts. It incorporates quantitative and qualitative information on a country’s banks’ operating environment. The sample is restricted to larger banks in each country. Source: Moody’s Country Credit Statistical Handbook (May 2010)
3.09 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 | 2009 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 (data retrieved August 4, 2010), www.globalpropertyguide.com
3.12 Output loss during banking crises This is the difference between actual and trend real GDP during a banking crisis. Output loss during recent crises is weighted more heavily | 2010 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 neither fully nor borderline systemic in nature. Output loss is expressed as a percentage of trend real GDP for the period [T, T + 3] where T is the starting year of the crisis. Trend real GDP is computed by applying an HP filter ( = 100) to the GDP series over [T – 20, T – 1]. No output losses are reported for crises in transition economies that took place during the period of transition to market economies. Source: Luc Laeven and Fabian Valencia. 2008. “Systemic Banking Crises: A New Database.” IMF Working Paper 08/224, Washington, DC: IMF. Updated June 2010. All weighting is based on World Economic Forum analysis.
3.13 Local currency sovereign rating This variable measures the probability that a country will pay its local currency borrowing in a full and timely manner | 2010 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. Source: Standard and Poor’s, July 2010
3.14 Foreign currency sovereign rating This variable measures the probability that a country will pay its foreign currency borrowing in a full and timely manner | 2010 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. Source: Standard and Poor’s, July 2010
3.15 Aggregate macroprudential indicator 3.10 Financial Stress Index This measures the extent to which a country’s financial system is under strain | 2009 Index for advanced economies is the sum of the following seven standardized subcomponents: 12-month rolling beta of Bank Stock Index, TED or interbank spread, corporate bond yield spread, inverted term spread, monthly stock returns (measured as declines), Generalized Auto-Regressive Conditional Heteroskedasticity (GARCH) volatility of monthly stock returns, and real effective exchange rates. Index for emerging economies is the sum of the following five standardized subcomponents: 12-month rolling beta of Bank Stock Index, monthly stock returns (measured as declines), GARCH volatility of monthly stock returns, sovereign debt spreads, and Exchange Market Pressure Index. Source: Ravi Balakrishnan, Stephan Danninger, Selim Elekdag, and Irina Tytell. 2009. The Transmission of Financial Stress from Advanced to Emerging Economies. Washington DC: IMF.
This is the aggregate measure of macroprudential soundness based on real GDP growth, deposit interest rate, inflation volatility, and inflation level | 2009 or most recent 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 are as of 2009 except deposit interest rates, for which the latest available data are as of 2008. Sources: GDP and inflation level data from the IMF, World Economic Outlook Database (April 2010); deposit interest rate data from the World Bank, Financial Development Indicators, retrieved August 2010; inflation volatility data from Bloomberg, retrieved September 2010
4.03 Financial system deposits to GDP
This variable is based on total debt owed by government to domestic residents, foreign nationals, and multilateral institutions as a percentage of GDP | 2009 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.
This variable shows the demand, time, and saving deposits in deposit-money banks and other financial institutions as a share of GDP | 2008 The ratio is calculated using the following deflation method:
(0.5) ×
[
Sources: Public debt data from the Economist Intelligence Unit CountryData Database, data retrieved August 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
This measure shows the spreads on sovereign credit default swaps | 2010 This indicator reflects pricing of five-year senior credit default swaps for the government sector. Sources: CMA DataVision and Markit CDS, data retrieved July 2010
Section IV: Banking financial services 4.01 Deposit money bank assets to GDP
Ft P_et
+
Ft –1 P_et –1
]
,
P_at where F is deposit money 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 May 2009
4.02 Central bank assets to GDP
Ft P_et
+
,
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 May 2009
4.04 M2 to GDP This variable is the money and quasi-money supply as a percentage of GDP | 2009 This variables shows money and quasi-money as a percentage of GDP, calculated using the following deflation method:
(0.5) ×
[
Ft P_et
+
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.
4.05 Private credit to GDP This variable shows private credit by deposit-money banks and other financial institutions as a percentage of GDP | 2008 The ratio is calculated using the following deflation method:
(0.5) ×
These are claims on domestic real nonfinancial sector by the central bank as a share of GDP | 2008 The ratio is calculated using the following deflation method:
[
]
Sources: M2 supply data from the Economist Intelligence Unit CountryData Database, data retrieved August 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
GDPt
(0.5) ×
Ft –1 P_et –1
GDPt
These are claims on domestic real nonfinancial sector by deposit money banks as a share of GDP | 2008 The ratio is calculated using the following deflation method:
[
+
where F is demand and time and savings deposits, P_e is end-of-period CPI, and P_a is average annual CPI.
3.17 Credit default swap spreads
(0.5) ×
Ft P_et
Ft –1 P_et –1
]
Technical Notes and Sources
3.16 Manageability of public debt
,
GDPt P_at 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 May 2009
[
Ft P_et
+
Ft –1 P_et –1
]
,
GDPt P_at where F is credit to the private sector, 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 May 2009
4.06 Bank deposits to GDP This variable shows the demand, time, and savings deposits in deposit-money banks as a share of GDP | 2008 The ratio is calculated using the following deflation method:
(0.5) ×
[
Ft P_et
+
Ft –1 P_et –1
]
,
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 May 2009
373
Technical Notes and Sources
4.07 Money market instruments to GDP
This variable is the percentage of adults covered by a public credit registry | 2009 This figure includes information on repayment history, unpaid debts, and credit outstanding.
Sources: Bank for International Settlements, Quarterly Review June 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
4.08 Aggregate profitability indicator This variable is based on a three-year average of three measures of profitability: net interest margin, bank return on assets, and bank return on equity | 2006–08 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 calculated as net income as a percentage of total assets. Bank return on equity 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 May 2009
4.09 Bank overhead costs This is bank overhead costs as a percentage of total assets | 2008 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 May 2009
374
4.14 Public credit registry coverage
This variable is total money market instruments (US$ billions) as a percentage of GDP | 2009 Figures are based on the residence of the issuer.
4.1 Public ownership of banks This variable is the percentage of assets held by the 10 largest banks that is located in banks that are more than 25 percent government-owned | 2009 or most recent available This figure is based on bank holding and holding companies, commercial banks, cooperative banks, Islamic banks, savings banks, and specialized governmental credit institutions in each country. Banks owned by public authorities in foreign countries are not included in this measure. Source: BankScope database, data retrieved July 2010
4.11 Bank operating costs to assets This is non-interest expense as a percentage of average assets in last reported year | 2009 or most recent available This ratio is calculated based on the weighted average of assets held by the top 10 bank holding and holding companies, commercial banks, cooperative banks, Islamic banks, savings banks, and specialized governmental credit institutions in each country. Source: BankScope database, data retrieved July 2010
4.12 Non-performing bank loans to total loans This variable is the percentage of non-performing bank loans relative to total number of loans outstanding | 2009 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, October 2010
4.13 Private credit bureau coverage This variable is the percentage of adults covered by a private credit registry | 2009 This figure includes information on repayment history, unpaid debts, and credit outstanding. Source: The World Bank, Doing Business 2010
Source: The World Bank, Doing Business 2010
Section V: Non-banking financial services 5.01
IPO market share This is the three-year average of percentage of world initial public offerings (IPOs) issued in a given country as measured by US dollars | 2007–09 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 + overallotment 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. Market share calculation is based on IPOs in the 57 economies included in the FDI. Source: Dealogic Analytics, data retrieved July 2010
5.02 IPO proceeds amount This is the three-year average of total initial public offering (IPO) proceeds as a percentage of GDP | 2007–09 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. Sources: Dealogic Analytics, data retrieved July 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
5.03 Share of world IPOs This is the three-year average of the number of initial public offering (IPO) issues as a percentage of total global number of issues | 2007–09 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 is based on IPOs in 57 economies included in Index. Source: Dealogic Analytics, data retrieved July 2010
5.04 M&A market share This is the three-year average of the dollar value of mergers and acquisitions (M&As) occurring in a given country as a percentage of the total global value | 2007–09 This indicator is the 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 is based on M&A transactions in 57 economies included in Index. Sources: Dealogic Analytics, data retrieved July 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
This variable is the rank value of the three-year average of mergers and acquisitions (M&A) transactions in US dollars (including the net debt of the target) as a percentage of GDP | 2007–09 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. Sources: Dealogic Analytics, data retrieved July 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
5.06 Share of total number of M&A deals This is the three-year average of the percentage of world mergers and acquisitions (M&A) deals occurring in a given country as measured by the share of the total number of global M&A deals | 2007–09 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 is based on M&A transactions in 57 economies included in the Index. Sources: Dealogic Analytics, data retrieved July 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
5.07 Life insurance density This variable is the direct life insurance premiums from domestic sources to GDP | 2009 Only premium income from domestic risks is used to calculate insurance penetration and density. Cross-border business is not included. Sources: Swiss Re, World Insurance in 2009: Premiums Dipped, but Industry Capital Improved; GDP data from the IMF, World Economic Outlook Database (April 2010)
5.08 Non–life insurance density This variable is the direct non-life insurance premiums from domestic sources to GDP | 2009 Only premium income from domestic risks is used to calculate insurance penetration and density. Cross-border business is not included. Source: Swiss Re, World Insurance in 2009: Premiums Dipped, but Industry Capital Improved; GDP data from the IMF, World Economic Outlook Database (April 2010)
5.11 Non–life insurance coverage This is the direct domestic premiums for non-life insurance to per capita GDP | 2009 Only premium income from domestic risks is used to calculate insurance penetration and density. Cross-border business is not included. Source: Swiss Re, World Insurance in 2009: Premiums Dipped, but Industry Capital Improved; GDP data from the IMF, World Economic Outlook Database (April 2010)
5.12 Relative value-added of insurance to GDP This is the value added by insurance and pension services to the economy after costs are subtracted, as a percentage of GDP | 2009 This indicator represents what remains of total sales revenue after the costs of providing insurance and pension products are taken out, signifying the value that the insurance and pension sector creates in the economy. Figures are preliminary and subject to change. Source: Global Insight, World Industry Services, August 2010
5.13 Securitization to GDP This is the 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 | 2007–09 This figure is calculated based on a three-year average GDP. Sources: Dealogic Analytics, data retrieved July 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
5.14 Share of total number of securitization deals This is the three-year average of the sum of asset-backed securities (ABS), mortgage-backed securities (MBS), high-yield bonds, and highly leveraged loans deals as a percentage of total deals | 2007–09 This figure is calculated based on a three-year average of securitization deals. Source: Dealogic Analytics, data retrieved July 2010
VI: Financial markets 6.01 Spot foreign exchange turnover This is the percentage share of the 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 the 57 economies included in the FDI. Source: Bank for International Settlements, Triennial Central Bank Survey, December 2007
5.09 Real growth of direct insurance premiums This is the annual real rate of growth (%) of direct premiums (life and non-life) based on local currency prices | 2008 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 2008: Emerging Markets Leading the Way
5.1 Life insurance coverage This is the direct domestic premiums for life insurance to per capita GDP | 2009 Only premium income from domestic risks is used to calculate insurance penetration and density. Cross-border business is not included. Sources: Swiss Re, World Insurance in 2009: Premiums Dipped, but Industry Capital Improved; GDP data from the IMF, World Economic Outlook Database (April 2010)
Technical Notes and Sources
5.05 M&A transaction value to GDP
6.02 Outright forward foreign exchange turnover This is the percentage share of the 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. Percentages are based on the 57 economies included in the FDI. Source: Bank for International Settlements, Triennial Central Bank Survey, December 2007
375
Technical Notes and Sources
6.03 Foreign exchange swap turnover This is the percentage share of the 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 the 57 economies included in the FDI. Source: Bank for International Settlements, Triennial Central Bank Survey, December 2007
6.04 Interest rate derivatives turnover: Forward rate
6.08 Foreign exchange derivatives turnover: Options This is the percentage share of the world total of over-thecounter 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 the 57 economies included in the FDI. Source: Bank for International Settlements, Triennial Central Bank Survey, December 2007
6.09 Stock market turnover ratio This is the ratio of the value of total shares traded to average real market capitalization | 2008 or most recent year available The denominator is deflated using the following method: Tt
agreements This is the percentage share of world total of over-thecounter 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 the 57 economies included in the FDI. Source: Bank for International Settlements, Triennial Central Bank Survey, December 2007
6.05 Interest rate derivatives turnover: Swaps
376
This is the percentage share of the world total of over-thecounter 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 the 57 economies included in the FDI. Source: Bank for International Settlements, Triennial Central Bank Survey, December 2007
6.06 Interest rate derivatives turnover: Options This is the percentage share of the world total of over-thecounter 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 the 57 economies included in the FDI. Source: Bank for International Settlements, Triennial Central Bank Survey, December 2007
6.07 Foreign exchange derivatives turnover: Currency swaps This is the percentage share of the world total of over-thecounter 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 the 57 economies included in the FDI. Source: Bank for International Settlements, Triennial Central Bank Survey, December 2007
P_at (0.5) ×
[
Mt P_et
+
, Mt –1 P_et –1
]
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. 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
6.10 Stock market capitalization to GDP This indicator is the value of listed shares as a percentage of GDP | 2008 or most recent year available The ratio is calculated using the following deflation method:
(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: 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
6.11 Stock market value traded to GDP This is the total value of shares traded on stock market exchanges as a percentage of GDP | 2008 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 May 2009
6.12 Number of listed companies per 10,000 people This is the number of publicly listed companies per 10,000 people | 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 May 2009
This variable is the domestic debt securities issued by financial institutions and corporations as a share of GDP | 2009 Ratio is calculated using the following deflation method:
(0.5) ×
[
Ft P_et
+
Ft –1 P_et –1
]
,
GDPt
6.16 Public international bonds to GDP This variable is the international debt securities issued by government as a share of GDP | 2009 This figure shows international debt securities issued by government and is based on the nationality of issuer. The ratio is calculated using the following deflation method:
(0.5) ×
[
Ft P_et
+
Ft –1 P_et –1
]
,
Technical Notes and Sources
6.13 Private domestic bond market capitalization to GDP
GDPt
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. Sources: Bank for International Settlements, Quarterly Review, June 2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation data from the IMF, World Economic Outlook Database (April 2010)
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. Sources: Bank for International Settlements, Quarterly Review, June 2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation data from the IMF, World Economic Outlook Database (April 2010)
6.14 Public domestic bond market capitalization to GDP This variable is the domestic debt securities issued by government as a share of GDP | 2009 Ratio is calculated using the following deflation method:
(0.5) ×
[
Ft P_et
+
Ft –1 P_et –1
]
,
GDPt P_at
Sources: Bank for International Settlements, Quarterly Review, June 2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation data from the IMF, World Economic Outlook Database (April 2010)
6.15 Private international bonds to GDP This variable is the international debt securities issued by financial institutions and corporations as a share of GDP | 2009 This variable shows international debt securities issued by financial institutions and corporate issuers, and is based on the nationality of the issuer. The ratio is calculated using the following deflation method:
[
Ft P_et
+
This is investment grade and high-yield issuance corporate bonds as a share of GDP | 2009 Corporate bonds consist of industrial and utility businesses; this variable excludes all financial firms. Sources: Dealogic Analytics, data retrieved July 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
VII: Financial access
where F is amount outstanding of public domestic debt securities, P_e is end-of-period CPI, and P_a is average annual CPI.
(0.5) ×
6.17 Local currency corporate bond issuance to GDP
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. Sources: Bank for International Settlements, Quarterly Review, June 2010, http://www.bis.org/statistics/secstats.htm; GDP and inflation data from the IMF, World Economic Outlook Database (April 2010)
7.06 Foreign direct investment to GDP This variable is comprised of equity capital, reinvested earnings, and intra-company loans | 2008 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. Sources: United Nations Conference on Trade and Development, 2010; GDP data from the IMF, World Economic Outlook Database (April 2010)
7.07 Market penetration of bank accounts This is the number of commercial bank accounts per 100,000 adults | 2009 These data are collected as part of an access to a finance questionnaire administered in February 2010. The 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 142 countries. Source: Consultative Group to Assist the Poor (CGAP). 2010. “Financial Access 2010,” Washington, DC: CGAP.
7.08 Commercial bank branches This is the number of commercial bank branches per 100,000 adults | 2009 These data are collected as part of an access to a finance questionnaire administered in February 2010. The 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 142 countries. Source: Consultative Group to Assist the Poor (CGAP). 2010. “Financial Access 2010,” Washington, DC: CGAP.
377
Technical Notes and Sources
7.09 Total number of ATMs This is the total number of ATMs per 100,000 adults | 2009 These data are collected as part of an access to a finance questionnaire administered in February 2010. The 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 142 countries. Source: Consultative Group to Assist the Poor (CGAP). 2010. “Financial Access 2010,” Washington, DC: CGAP.
7.10 Total number of point of sale (POS) devices This is the total number of POSs per 100,000 adults | 2009 These data are collected as part of an access to a finance questionnaire administered in February 2010. The 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 142 countries. Source: Consultative Group to Assist the Poor (CGAP). 2010. “Financial Access 2010,” Washington, DC: CGAP.
7.11 Microfinance institution (MFI) borrowers’ penetration rate
378
This is the total number of borrowers from microfinance institutions (MFIs) 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
About the Authors
About the Authors
Thorsten Beck Thorsten Beck is a Professor of Economics and Chairman of the European Banking Center at Tilburg University. Before joining the university in 2008, he worked at the Development Research Group of the World Bank. His research and policy work has focused on two main questions: What is the effect of financial sector development on economic growth and poverty alleviation? What are the determinants of a sound and effective financial sector? Recently, his research has focused on access to financial services by small and medium-sized enterprises and households. Professor Beck is co-author of Making Finance Work for Africa and Finance for All? Policies and Pitfalls in Expanding Access. His country experience in both research and policy work includes Bangladesh, Bolivia, Brazil, China, Colombia, Mexico, Peru, Russia, and several sub-Saharan African countries. He is also a Research Fellow in the Centre for Economic Policy Research (CEPR) in London and a Fellow in the Center for Financial Studies in Frankfurt. He studied at Tübingen University, Universidad de Costa Rica, the University of Kansas, and the University of Virginia. 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 lower-income consumers and emerging enterprise applications for wireless technology. 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.
Lawrence Chuang Lawrence Chuang is an Associate with the Financial Institutions Team at the World Economic Forum. Mr. Chuang holds a BBA in Finance and Accounting from the Stephen M. Ross School of Business at the University of Michigan. In May 2011, he expects to complete his Master of Business Administration degree, with a concentration in Finance and Strategy, at the Yale School of Management. Prior to his graduate studies, Mr. Chuang worked within the Financial Institutions Group at BlackRock. Howard Davies Howard Davies is Director of the London School of Economics and Political Science. Prior to his current appointment he was Chairman of the Financial Services Authority, the United Kingdom’s single financial regulator since 1998. Howard Davies had previously served for two years as Deputy Governor of the Bank of England, after three years as Director General of the Confederation of British Industry. From 1987 to 1992 he was Controller of the Audit Commission. From 1982 to 1987 he worked for McKinsey & Company in London, and during 1985–86 was seconded to the Treasury as Special Adviser to the Chancellor of the Exchequer. He had previously worked at the Treasury and the Foreign and Commonwealth Office, including two years as Private Secretary to the British Ambassador in Paris. He is a non-executive trustee of the Tate Foundation and a member of the governing body, Royal Academy of Music. In 2004 he was elected to an honorary fellowship at Merton College and joined the board of Morgan Stanley as a non-executive director. In 2009, he became an advisor to the Government Investment Corporation of Singapore. His latest book, The Financial Crisis: Who Is to Blame? was published in July 2010. Michael Drexler Michael Drexler is a Managing Director and Global Head of Strategy, Commercial/Investment Banking and Wealth Management at Barclays in London. His remit covers business line reviews, business development, and the facilitation of executive committee/board discussions and acquisitions/disposals. Dr. Drexler also acts as a senior advisor in Financial Services to the World Economic Forum, and was elected a Young Global Leader by the World Economic Forum in 2010. He previously held positions in Principal Investments and Finance at Barclays Capital. Dr. Drexler joined Barclays Capital in 2002 from McKinsey & Company. Prior to that, he was an academic researcher at Stanford. He holds a doctorate in Mathematics from University of Oxford and an MSc in Electronic Engineering from the Technical University, Munich. An alumnus of Magdalen College, Oxford, he actively supports his old college in its activities.
379
About the Authors
380
Thierry Geiger Thierry Geiger is Associate Director and Economist within the Centre for Global Competitiveness and Performance and an alumnus of the Global Leadership Fellow Programme 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 Centre for Global Competitiveness and Performance 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 Centre for Global Competitiveness and Performance, 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 Manager with the Emerging Markets Finance team at the World Economic Forum USA. In addition to her work on The Financial Development Report 2010, Ms. Harry has also contributed to the Forum’s inaugural report on infrastructure investment, Paving the Way: Maximizing the Value of Private Investment in Infrastructure, and to ongoing work on mobile financial services. 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.
Partner Institutes
Partner Institutes
The World Economic Forum’s Centre for Global Competitiveness and Performance is pleased to acknowledge and thank the following organizations as its valued Partner Institutes, without which the realization of The Financial Development Report 2010 would not have been feasible: Argentina IAE—Universidad Austral María Elina Gigaglia, Project Manager Eduardo Luis Fracchia, Professor Australia Australian Industry Group Colleen Dowling, Senior Research Coordinator Nick James, Economist Heather Ridout, Chief Executive Austria Austrian Institute of Economic Research (WIFO) Karl Aiginger, Director Gerhard Schwarz, Coordinator, Survey Department Bahrain Bahrain Competitiveness Council, Bahrain Economic Development Board Nada Azmi, Manager, Economic Planning and Development Jawad Habib, Senior Partner, BDO Jawad Habib Rima Al Kilani, Director, International Marketing 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 Priscilla Boairdi, Associate, Competence Centre Entrepreneurship, Governance and Strategy Wim Moesen, Professor Leo Sleuwaegen, Professor, Competence Centre Entrepreneurship, Governance and Strategy Brazil Fundação Dom Cabral Marina Araújo, Economist and Researcher, The Competitiveness and Innovation Center Carlos Arruda, Executive Director, International Board and Professor and Coordinator, The Competitiveness and Innovation Center Arthur Kux, Economist and Research Assistant, The Competitiveness and Innovation Center Movimento Brasil Competitivo (MBC) Erik Camarano, Director President Cecília Macedo, Economist and Senior Projects Coordinator Nikelma Moura, Communications Assistant
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 Chile Universidad Adolfo Ibáñez Fernando Larrain Aninat, Director of the Master in Management and Public Policy, School of Government Camila Chadwick, Project Coordinator Leonidas Montes, Dean, School of Government 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 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 Department of Business Studies, Aalborg University Birgitte Gregersen, Associate Professor Gert Villumsen, Associate Professor Egypt The Egyptian Center for Economic Studies Omneia Helmy, Deputy Director of Research and Lead Economist Magda Kandil, Executive Director and Director of Research Malak Reda, Senior Economist 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
381
Partner Institutes
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
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 Kuwait National Competitiveness Committee Adel Al-Husainan, Committee Member Fahed Al-Rashed, Committee Chairman Sayer Al-Sayer, Committee Member
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 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
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National Competitiveness Council Adrian Devitt, Manager Caoimhe Gavin, Policy Advisor 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, Managing Director, Keizai Doyukai Jordan Ministry of Planning & International Cooperation Jordan National Competitiveness Team Hiba Abu Taleb, Primary Researcher Maher Al Mahrouq, Team Leader and Director of Policies and Studies Department Kawther 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, Project Manager
Malaysia Institute of Strategic and International Studies (ISIS) Mahani Zainal Abidin, Chief Executive Steven C.M. Wong, Senior Director, Economics Malaysia Productivity Corporation (MPC) Mohd Razali Hussain, 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 Alarcón Esteva, Economist Luis César Castañeda Valdés, Researcher Manuel J. Molano Ruíz, Deputy General Director Roberto Newell García, General Director Ministry of the Economy Paulo Esteban Alcaraz, Research Director, ProMéxico Trade & Investment Felipe Duarte Olvera, Undersecretary for Competitiveness and Standardization Javier Prieto, Technical Secretary for Competitiveness Jose Antonio Torre, Head of the Business Intelligence Unit, ProMéxico Trade & Investment Morocco Université Hassan II, LASAARE Fouzi Mourji, Professor of Economics 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) Frank Nweke Jr., Director General Sam Ohuabunwa, Chairman Chris Okpoko, Research Director, Research Norway BI Norwegian School of Management Eskil Goldeng, Researcher Torger Reve, Professor Pakistan Competitiveness Support Fund Arthur Bayhan, Chief Executive Officer Imran Naeem Ahmad, Communication Specialist Maryam Jawaid, Communication Specialist Panama INCAE Business School, Latin American Center for Competitiveness and Sustainable Development (CLACDS) Arturo Condo, Rector Marlene de Estrella, Director of External Relations Lawrence Pratt, Director, CLACDS Víctor Umaña, Researcher and Project Manager, CLACDS
Philippines Makati Business Club (MBC) in association with Management Association of the Philippines (MAP) Alberto A. Lim, Executive Director, MBC Arnold P. Salvador, Executive Director, MAP Marc P. Opulencia, Deputy Director, MBC Michael B. Mundo, Chief Economist, MBC Poland Economic Institute, National Bank of Poland Mateusz Pipien, General Director Piotr Boguszewski, Advisor Romania Group of Applied Economics (GEA) Liviu Voinea, Executive Director Irina Zgreaban, Program Coordinator
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 Dubai Economic Council Gayane Afrikian, Director, Dubai Competitiveness Centre Khawla Belqazi, Special Projects Manager
Russian Federation Bauman Innovation Alexei Prazdnitchnykh, Principal, Associate Professor Katerina Marandi, Consultant
Emirates Competitiveness Council Abdullah Nasser Lootah,Secretary General
Stockholm School of Economics, Russia Igor Dukeov, Area Principal Carl F. Fey, Associate Dean of Research
Institute for Social and Economic Research (ISER), Zayed University Nico Vellinga, Professor
Saudi Arabia National Competitiveness Center (NCC) Awwad Al-Awwad, President Khaldon Mahasen, Vice President
United Kingdom LSE Enterprise Ltd, London School of Economics and Political Science Niccolo Durazzi, Project Administrator Robyn Klingler Vidra, Researcher Jane Lac, Project Manager
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 Peter Klatik, Researcher Matej Tunega, Researcher South Africa Business Leadership South Africa Friede Dowie, Director Michael Spicer, Chief Executive Officer Business Unity South Africa Simi Siwisa, Director Jerry Vilakazi, Chief Executive Officer Spain IESE Business School, International Center for Competitiveness Antoni Subirà, Professor María Luisa Blázquez, Research Associate Sweden Center for Strategy and Competitiveness, Stockholm School of Economics Christian Ketels, Senior Research Fellow Örjan Sölvell, Professor Switzerland University of St. Gallen, Executive School of Management, Technology and Law (ES-HSG) Beat Bechtold, Communications Manager Alexander Jungmeister, Vice Executive Director Rubén Rodriguez Startz, Project Manager
Partner Institutes
Peru Centro de Desarrollo Industrial (CDI), Sociedad Nacional de Industrias Néstor Asto, Project Director Luis Tenorio, Executive Director
Venezuela CONAPRI—Venezuelan Council for Investment Promotion Eduardo Porcarelli, 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 to economic growth has become even more pronounced in recent years, yet there is still surprisingly little agreement about how to define and measure their development. To address this gap, the World Economic Forum has undertaken an ongoing initiative that aims to provide business leaders and policymakers with a common framework for identifying and discussing the key factors in the development of global financial systems and markets. The Financial Development Report 2010, in its third edition, measures and analyzes the factors enabling the development of financial systems in 57 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 third Financial Development Index (FDI), developed by the World Economic Forum in collaboration with the academic community, multilateral organizations, and business leaders. It 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 the availability of financing to small- and medium-sized enterprises and the impact of capital flows on financial development. The Report contains detailed profiles for the 57 economies covered by the FDI this year; Morocco and Romania are two new additions to the Index. Data used in the calculation of the FDI are fully annotated and clearly presented. Written in a nontechnical language and style, the Report appeals to a large audience made up of policymakers, business leaders, academics, and different organizations of civil society. It aims to provide policymakers with a balanced perspective as to which aspects of their countryâ&#x20AC;&#x2122;s financial system are most important and with the ability to empirically calibrate this view relative to other countries.
ISBN-13: 978-92-95044-93-7