Module 10

It had been brought to attention the state of development of domestic securities markets in many developing economies, especially those of Latin America to be or become disheartening and puzzling. Even though economies from developing countries have been showing some type of growth during the 1990, it's not considered to be enough. At the same time, other countries show corrosion of their capital markets. In addition, many emerging economies show stock markets remaining very liquid and segmented. Binds also show concentration at the short end at the maturity range. As for Latin America, it shows even more deterrence given the fact that many reforms have been taken in affect over the past decade. After controlling per capita income, economies size, macroeconomic policies, and legal and institutional development, Latin America capital markets are below than expected. Evidence has proved that other characteristics other than those mention, play a significant role. Two criticisms have been brought to attention from experts or professionals in this field. Some complain that the study fails to capture sufficient operational guidance as to what they should be doing differently. Other complain that the reforms has holes all over it without stating well-defined or/ and specific alternatives. Everyone asks the questions of what went wrong with the reform agenda issued in the past and what can we do to make these reforms more attractive or efficient. This calls for process that by nature requires resorting to judgment. There are three typological views used only for presentation purposes, help represent the nature of debate and to high policy issues under debate. They are known as, 1) "be patient and redouble the efforts", 2) and "get the sequence right" 3) "revisit basic issues and revise expectations". The first review states the noticeable element of the capital market reforms is well known. The second view reveals what is arguable in the first view, to one degree or another, might be the problem rather than the solution. The third becomes acknowledged because of the last two view shortcomings. Basic the point is to go back to the basic which means to revisit basic issues from standpoints that are frequently underplayed. Financial globalization calls for reforms to be looked at a whole not one that centers only on local dimensions. Many studies have the tendency to measure and compare financial development across countries in reference of size and activities of domestic markets such as ratio of GDP variables as assets, liabilities, capital, income and turnover. The bigger picture is to capture linkage between financial markets and the way local markets cab enhance the working of a financial system as a whole. This linkage are critical in the developing of financial markets such as housing finance, structured finance, infrastructure finance, where domestic and international securities markets can produce suitable products,