The Financial Development Report 2010 ranks 57 of the world’s leading financial systems and capital markets. It analyses the drivers of financial system development in advanced and emerging economies to serve as a tool for countries to benchmark themselves and establish priorities for reform.The rankings are based on over 120 variables spanning institutional and business environments, financial stability, and size and depth of capital markets, among other factors. The breadth of factors covered in the report means that countries with high financial instability scores like the United Kingdom and US could still achieve a high relative ranking in the Index due to other strengths.The Financial Development Report benefited from the guidance and support of its Industry Partners with particular contributions from Actis, Barclays, JPMorgan Chase, Standard Chartered Bank and Troika Dialog. The Forum is also grateful for the participation of the London School of Economics, New York University, the University of Chicago Booth School of Business, and the World Bank. The views expressed in the report do not necessarily reflect those of the advisers to the project.The report draws on data taken from a variety of publicly available sources such as the World Bank as well as the World Economic Forum’s Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum with its network of Partner Institutes (leading research institutes and business organizations). The Forum’s Global Competitiveness Network, which sponsors related initiatives such as The Global Competitiveness Report, also supported this work.
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Content
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.
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.
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
Sweden
Singapore
Hong Kong SAR
Finland
Switzerland
Denmark
Canada
Netherlands
Norway
France
Belgium
Germany
Australia
Bahrain
United Kingdom
Austria
United States
Ireland
Korea, Rep.
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
Romania
Chile
South Africa
Saudi Arabia
Italy
Thailand
Panama
Czech Republic
Korea, Rep.
China
Poland
Kuwait
Egypt
Turkey
Slovak Republic
Peru
Philippines
Nigeria
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
Romania
Slovak Republic
Czech Republic
Turkey
Malaysia
Chile
Kuwait
Israel
Russian Federation
Poland
Colombia
Thailand
China
Kazakhstan
Panama
Morocco
Argentina
Jordan
Denmark
Sweden
South Africa
Poland
Bangladesh
Netherlands
Israel
Japan
Colombia
Egypt
Indonesia
Philippines
Italy
United States
Venezuela
Jordan
Russian Federation
Korea, Rep.
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
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
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
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
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
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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1.1: The Financial Development Index 2010
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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
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
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
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
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
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
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
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.
• 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.
45
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.
46
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
53
1.3: SME Finance: What Have We Learned and What Do We Need to Learn?
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.
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Barrier to the Entry and Post-Entry Growth of Firms.” Economic
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Important Are Financing Constraints? The Role of Finance in
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———. 2010. “Firm Innovation in Emerging Markets: The Role
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Poverty: Cross-Country Evidence.” Journal of Economic Growth 10
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Legal Constraints to Firm Growth: Does Firm Size Matter?”
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Beck, T., A. Demirgüç-Kunt, L. Laeven, and V. Maksimovic. 2006a. “The
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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
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how it changes over time, and about the various constraints to
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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
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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.
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Firm Size, and Growth.” Journal of Money, Credit, and Banking
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Beck, T., A. Demirgüç-Kunt, and M. S. Martinez Peria. 2010a. “Banking
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Beck, T., L. Klapper and J. C. Mendoza. 2010b. “The Typology of Partial
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55
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Berger, A. N. and G. F. Udell. 1998. “The Economics of Small Business
Finance: The Roles of Private Equity and Debt Markets in the
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———. 2006. “A More Complete Conceptual Framework for SME
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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
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Amsterdam: Netherlands.
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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.
56
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
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Fisman, R. and V. Saria-Allende. 2010. “Regulation of Entry and the
Distortion of Industrial Organization.” Journal of Applied
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Hallberg, K. 2000. “A Market-Oriented Strategy for Small and MediumScale Enterprises.” IFC Discussion Paper No. 48. Washington, DC:
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Khwaja, A. I. and A. Mian. 2005. “Do Lenders Favor Politically
Connected Firms? Rent Provision in an Emerging Financial
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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.
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“Entrepreneurship and Firm Formation Across Countries.” In
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to Entrepreneurship." Journal of Financial Economics 82 (3):
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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
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.
2nd pillar: Business environment .............................................42
4.0
Human capital ...............................................................................27
Taxes...............................................................................................53
Infrastructure ................................................................................35
Cost of doing business ................................................................44
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.
• 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.
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:
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 .....
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 .....
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 .....
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 .....
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 .....
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
2nd pillar: Business environment .............................................42
4.0
Human capital ...............................................................................27
Taxes...............................................................................................53
Infrastructure ................................................................................35
Cost of doing business ................................................................44
Currency stability..........................................................................31
Banking system stability..............................................................53
Risk of sovereign debt crisis ......................................................54
Size index .......................................................................................46
Efficiency index.............................................................................54
Financial information disclosure..................................................2
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................13
5.5
Human capital ...............................................................................11
Taxes...............................................................................................20
Infrastructure ................................................................................18
Cost of doing business ..................................................................6
Currency stability..........................................................................42
Banking system stability................................................................9
Risk of sovereign debt crisis ........................................................1
Size index .........................................................................................8
Efficiency index...............................................................................4
Financial information disclosure..................................................3
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................16
5.4
Human capital ...............................................................................18
Taxes...............................................................................................11
Infrastructure ................................................................................10
Cost of doing business ................................................................28
Currency stability..........................................................................33
Banking system stability..............................................................26
Risk of sovereign debt crisis ......................................................11
Size index .......................................................................................16
Efficiency index.............................................................................18
Financial information disclosure................................................32
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................14
5.5
Human capital ...............................................................................32
Taxes.................................................................................................1
Infrastructure ................................................................................22
Cost of doing business ................................................................10
Currency stability..........................................................................50
Banking system stability................................................................3
Risk of sovereign debt crisis ......................................................22
Size index .....................................................................................n/a
Efficiency index.............................................................................14
Financial information disclosure................................................36
Foreign exchange markets .........................................................35
Derivatives markets .....................................................................31
Equity market development ........................................................27
Bond market development ........................................................n/a
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
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
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
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
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
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
2nd pillar: Business environment .............................................57
2.8
Human capital ...............................................................................57
Taxes...............................................................................................48
Infrastructure ................................................................................57
Cost of doing business ................................................................57
Currency stability............................................................................7
Banking system stability..............................................................28
Risk of sovereign debt crisis ......................................................49
Size index .......................................................................................36
Efficiency index.............................................................................44
Financial information disclosure................................................55
Foreign exchange markets........................................................n/a
Derivatives markets....................................................................n/a
Equity market development ........................................................55
Bond market development ........................................................n/a
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................11
5.5
Human capital .................................................................................7
Taxes.................................................................................................8
Infrastructure ................................................................................12
Cost of doing business ................................................................29
Currency stability........................................................................n/a
Banking system stability..............................................................29
Risk of sovereign debt crisis ......................................................25
Size index .......................................................................................14
Efficiency index...............................................................................3
Financial information disclosure................................................15
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
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
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
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
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
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
2nd pillar: Business environment .............................................49
3.8
Human capital ...............................................................................43
Taxes...............................................................................................52
Infrastructure ................................................................................40
Cost of doing business ................................................................46
Currency stability............................................................................2
Banking system stability..............................................................16
Risk of sovereign debt crisis ......................................................42
Size index .......................................................................................28
Efficiency index.............................................................................53
Financial information disclosure................................................12
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
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
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
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
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
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
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
2nd pillar: Business environment ...............................................7
5.7
Human capital .................................................................................8
Taxes...............................................................................................19
Infrastructure ................................................................................11
Cost of doing business ..................................................................3
Currency stability..........................................................................37
Banking system stability................................................................8
Risk of sovereign debt crisis ......................................................12
Size index .......................................................................................12
Efficiency index.............................................................................11
Financial information disclosure..................................................3
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................31
4.5
Human capital ...............................................................................26
Taxes...............................................................................................27
Infrastructure ................................................................................31
Cost of doing business ................................................................35
Currency stability..........................................................................23
Banking system stability................................................................2
Risk of sovereign debt crisis ......................................................16
Size index .......................................................................................35
Efficiency index.............................................................................47
Financial information disclosure................................................17
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................38
4.3
Human capital ...............................................................................36
Taxes...............................................................................................24
Infrastructure ................................................................................47
Cost of doing business ................................................................34
Currency stability............................................................................4
Banking system stability..............................................................50
Risk of sovereign debt crisis ........................................................7
Size index .....................................................................................n/a
Efficiency index.............................................................................25
Financial information disclosure..................................................3
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................36
4.3
Human capital ...............................................................................44
Taxes...............................................................................................34
Infrastructure ................................................................................42
Cost of doing business ................................................................19
Currency stability..........................................................................10
Banking system stability..............................................................41
Risk of sovereign debt crisis ......................................................40
Size index .......................................................................................49
Efficiency index.............................................................................48
Financial information disclosure................................................27
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
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
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
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
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
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
2nd pillar: Business environment .............................................28
4.7
Human capital ...............................................................................20
Taxes...............................................................................................26
Infrastructure ................................................................................24
Cost of doing business ................................................................45
Currency stability..........................................................................24
Banking system stability..............................................................25
Risk of sovereign debt crisis ......................................................24
Size index .......................................................................................34
Efficiency index.............................................................................17
Financial information disclosure................................................19
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
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
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
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
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
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
2nd pillar: Business environment ...............................................6
5.8
Human capital .................................................................................5
Taxes...............................................................................................28
Infrastructure ..................................................................................2
Cost of doing business ..................................................................5
Currency stability..........................................................................29
Banking system stability..............................................................36
Risk of sovereign debt crisis ......................................................10
Size index .........................................................................................9
Efficiency index.............................................................................13
Financial information disclosure................................................52
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................48
3.8
Human capital ...............................................................................54
Taxes...............................................................................................38
Infrastructure ................................................................................50
Cost of doing business ................................................................40
Currency stability..........................................................................18
Banking system stability..............................................................11
Risk of sovereign debt crisis ......................................................52
Size index .......................................................................................20
Efficiency index.............................................................................51
Financial information disclosure................................................47
Foreign exchange markets........................................................n/a
Derivatives markets....................................................................n/a
Equity market development ........................................................39
Bond market development ........................................................n/a
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
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
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
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
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
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
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
2nd pillar: Business environment ...............................................4
5.9
Human capital .................................................................................1
Taxes...............................................................................................12
Infrastructure ..................................................................................6
Cost of doing business ..................................................................7
Currency stability..........................................................................28
Banking system stability..............................................................14
Risk of sovereign debt crisis ........................................................9
Size index .......................................................................................25
Efficiency index...............................................................................2
Financial information disclosure................................................44
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................10
5.6
Human capital ...............................................................................12
Taxes.................................................................................................6
Infrastructure ..................................................................................7
Cost of doing business ................................................................27
Currency stability........................................................................n/a
Banking system stability..............................................................27
Risk of sovereign debt crisis ......................................................13
Size index .......................................................................................23
Efficiency index.............................................................................16
Financial information disclosure................................................29
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................12
5.5
Human capital ...............................................................................17
Taxes...............................................................................................16
Infrastructure ..................................................................................4
Cost of doing business ................................................................20
Currency stability..........................................................................21
Banking system stability..............................................................35
Risk of sovereign debt crisis ......................................................15
Size index .......................................................................................15
Efficiency index.............................................................................32
Financial information disclosure................................................11
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
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
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
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
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
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
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
2nd pillar: Business environment ...............................................3
5.9
Human capital ...............................................................................19
Taxes.................................................................................................2
Infrastructure ..................................................................................1
Cost of doing business ................................................................14
Currency stability............................................................................9
Banking system stability................................................................6
Risk of sovereign debt crisis ........................................................3
Size index .........................................................................................6
Efficiency index...............................................................................5
Financial information disclosure................................................23
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
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
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
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
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
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
2nd pillar: Business environment .............................................25
4.7
Human capital ...............................................................................24
Taxes...............................................................................................35
Infrastructure ................................................................................23
Cost of doing business ................................................................30
Currency stability..........................................................................51
Banking system stability..............................................................55
Risk of sovereign debt crisis ......................................................53
Size index .......................................................................................38
Efficiency index.............................................................................56
Financial information disclosure................................................49
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................52
3.3
Human capital ...............................................................................39
Taxes...............................................................................................49
Infrastructure ................................................................................56
Cost of doing business ................................................................52
Currency stability..........................................................................15
Banking system stability..............................................................49
Risk of sovereign debt crisis ......................................................44
Size index .......................................................................................33
Efficiency index.............................................................................37
Financial information disclosure................................................50
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................54
3.2
Human capital ...............................................................................38
Taxes...............................................................................................51
Infrastructure ................................................................................55
Cost of doing business ................................................................55
Currency stability............................................................................6
Banking system stability..............................................................48
Risk of sovereign debt crisis ......................................................39
Size index .......................................................................................43
Efficiency index.............................................................................49
Financial information disclosure................................................35
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
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
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
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
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
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
2nd pillar: Business environment .............................................18
5.4
Human capital ...............................................................................14
Taxes...............................................................................................13
Infrastructure ................................................................................21
Cost of doing business ................................................................17
Currency stability..........................................................................40
Banking system stability..............................................................56
Risk of sovereign debt crisis ......................................................36
Size index .........................................................................................2
Efficiency index.............................................................................33
Financial information disclosure..................................................3
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................33
4.4
Human capital ...............................................................................25
Taxes...............................................................................................39
Infrastructure ................................................................................16
Cost of doing business ................................................................51
Currency stability..........................................................................25
Banking system stability..............................................................33
Risk of sovereign debt crisis ......................................................30
Size index .......................................................................................27
Efficiency index.............................................................................19
Financial information disclosure................................................16
Foreign exchange markets .........................................................25
Derivatives markets....................................................................n/a
Equity market development ........................................................13
Bond market development ........................................................n/a
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................24
4.8
Human capital ...............................................................................30
Taxes...............................................................................................23
Infrastructure ................................................................................26
Cost of doing business ................................................................32
Currency stability..........................................................................36
Banking system stability..............................................................17
Risk of sovereign debt crisis ......................................................45
Size index .......................................................................................21
Efficiency index.............................................................................29
Financial information disclosure................................................13
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
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
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
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
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
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
2nd pillar: Business environment .............................................20
5.1
Human capital ...............................................................................16
Taxes...............................................................................................37
Infrastructure ................................................................................17
Cost of doing business ................................................................15
Currency stability..........................................................................19
Banking system stability..............................................................39
Risk of sovereign debt crisis ......................................................28
Size index .........................................................................................4
Efficiency index.............................................................................12
Financial information disclosure................................................22
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................43
4.0
Human capital ...............................................................................40
Taxes...............................................................................................33
Infrastructure ................................................................................43
Cost of doing business ................................................................48
Currency stability..........................................................................39
Banking system stability..............................................................19
Risk of sovereign debt crisis ......................................................46
Size index .......................................................................................10
Efficiency index.............................................................................21
Financial information disclosure................................................54
Foreign exchange markets........................................................n/a
Derivatives markets....................................................................n/a
Equity market development ........................................................21
Bond market development ........................................................n/a
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................39
4.2
Human capital ...............................................................................46
Taxes...............................................................................................45
Infrastructure ................................................................................46
Cost of doing business ................................................................16
Currency stability..........................................................................47
Banking system stability..............................................................42
Risk of sovereign debt crisis ......................................................34
Size index .......................................................................................44
Efficiency index.............................................................................40
Financial information disclosure................................................40
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
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
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
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
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
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
2nd pillar: Business environment .............................................19
5.3
Human capital ...............................................................................15
Taxes...............................................................................................25
Infrastructure ..................................................................................8
Cost of doing business ................................................................18
Currency stability..........................................................................43
Banking system stability..............................................................47
Risk of sovereign debt crisis ......................................................14
Size index .......................................................................................31
Efficiency index.............................................................................28
Financial information disclosure................................................14
Foreign exchange markets .........................................................15
Derivatives markets .....................................................................18
Equity market development ........................................................10
Bond market development ........................................................n/a
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
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
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
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
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
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
2nd pillar: Business environment .............................................32
4.5
Human capital ...............................................................................51
Taxes...............................................................................................10
Infrastructure ................................................................................41
Cost of doing business ................................................................26
Currency stability..........................................................................11
Banking system stability..............................................................37
Risk of sovereign debt crisis ......................................................18
Size index .......................................................................................32
Efficiency index.............................................................................15
Financial information disclosure................................................39
Foreign exchange markets........................................................n/a
Derivatives markets....................................................................n/a
Equity market development ........................................................12
Bond market development ........................................................n/a
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................30
4.6
Human capital ...............................................................................28
Taxes...............................................................................................18
Infrastructure ................................................................................30
Cost of doing business ................................................................41
Currency stability............................................................................1
Banking system stability..............................................................13
Risk of sovereign debt crisis ......................................................23
Size index .......................................................................................17
Efficiency index.............................................................................30
Financial information disclosure..................................................1
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
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
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
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
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
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
2nd pillar: Business environment .............................................46
3.9
Human capital ...............................................................................50
Taxes...............................................................................................43
Infrastructure ................................................................................45
Cost of doing business ................................................................36
Currency stability..........................................................................17
Banking system stability..............................................................12
Risk of sovereign debt crisis ......................................................33
Size index .......................................................................................53
Efficiency index.............................................................................50
Financial information disclosure................................................21
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
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
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
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
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
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
2nd pillar: Business environment .............................................41
4.0
Human capital ...............................................................................49
Taxes...............................................................................................47
Infrastructure ................................................................................37
Cost of doing business ................................................................33
Currency stability..........................................................................14
Banking system stability..............................................................10
Risk of sovereign debt crisis ......................................................38
Size index .......................................................................................26
Efficiency index.............................................................................22
Financial information disclosure................................................46
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
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
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
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
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
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
2nd pillar: Business environment ...............................................8
5.7
Human capital .................................................................................9
Taxes.................................................................................................9
Infrastructure ................................................................................13
Cost of doing business ................................................................11
Currency stability..........................................................................22
Banking system stability..............................................................45
Risk of sovereign debt crisis ......................................................17
Size index .........................................................................................3
Efficiency index...............................................................................9
Financial information disclosure................................................18
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................56
2.8
Human capital ...............................................................................55
Taxes...............................................................................................57
Infrastructure ................................................................................54
Cost of doing business ................................................................54
Currency stability........................................................................n/a
Banking system stability............................................................n/a
Risk of sovereign debt crisis ......................................................51
Size index .......................................................................................50
Efficiency index.............................................................................41
Financial information disclosure................................................56
Foreign exchange markets........................................................n/a
Derivatives markets....................................................................n/a
Equity market development ........................................................52
Bond market development ........................................................n/a
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
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
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
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
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
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
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
2nd pillar: Business environment ...............................................9
5.6
Human capital ...............................................................................10
Taxes...............................................................................................17
Infrastructure ................................................................................19
Cost of doing business ..................................................................2
Currency stability........................................................................n/a
Banking system stability..............................................................24
Risk of sovereign debt crisis ........................................................8
Size index .......................................................................................30
Efficiency index...............................................................................6
Financial information disclosure..................................................3
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................50
3.6
Human capital ...............................................................................56
Taxes...............................................................................................54
Infrastructure ................................................................................52
Cost of doing business ................................................................31
Currency stability..........................................................................27
Banking system stability..............................................................23
Risk of sovereign debt crisis ......................................................57
Size index .......................................................................................41
Efficiency index.............................................................................43
Financial information disclosure................................................48
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................40
4.1
Human capital ...............................................................................42
Taxes...............................................................................................42
Infrastructure ................................................................................44
Cost of doing business ................................................................24
Currency stability..........................................................................30
Banking system stability..............................................................46
Risk of sovereign debt crisis ......................................................35
Size index .......................................................................................18
Efficiency index.............................................................................27
Financial information disclosure................................................31
Foreign exchange markets........................................................n/a
Derivatives markets....................................................................n/a
Equity market development ........................................................54
Bond market development ........................................................n/a
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................47
3.8
Human capital ...............................................................................45
Taxes...............................................................................................46
Infrastructure ................................................................................48
Cost of doing business ................................................................42
Currency stability..........................................................................26
Banking system stability..............................................................18
Risk of sovereign debt crisis ......................................................27
Size index .......................................................................................52
Efficiency index.............................................................................46
Financial information disclosure................................................24
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................53
3.3
Human capital ...............................................................................48
Taxes...............................................................................................40
Infrastructure ................................................................................53
Cost of doing business ................................................................56
Currency stability..........................................................................16
Banking system stability..............................................................34
Risk of sovereign debt crisis ......................................................43
Size index .......................................................................................39
Efficiency index.............................................................................45
Financial information disclosure................................................51
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
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
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
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
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
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
2nd pillar: Business environment .............................................35
4.4
Human capital ...............................................................................21
Taxes...............................................................................................30
Infrastructure ................................................................................29
Cost of doing business ................................................................50
Currency stability..........................................................................44
Banking system stability..............................................................20
Risk of sovereign debt crisis ......................................................26
Size index .......................................................................................42
Efficiency index.............................................................................39
Financial information disclosure................................................26
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................26
4.7
Human capital ...............................................................................35
Taxes...............................................................................................14
Infrastructure ................................................................................33
Cost of doing business ................................................................21
Currency stability..........................................................................35
Banking system stability..............................................................38
Risk of sovereign debt crisis ......................................................48
Size index .......................................................................................48
Efficiency index.............................................................................57
Financial information disclosure................................................34
Foreign exchange markets .........................................................42
Derivatives markets....................................................................n/a
Equity market development ........................................................28
Bond market development ........................................................n/a
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................34
4.4
Human capital ...............................................................................29
Taxes...............................................................................................41
Infrastructure ................................................................................32
Cost of doing business ................................................................25
Currency stability..........................................................................12
Banking system stability..............................................................51
Risk of sovereign debt crisis ......................................................41
Size index .......................................................................................47
Efficiency index.............................................................................55
Financial information disclosure................................................45
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................22
5.0
Human capital ...............................................................................33
Taxes.................................................................................................5
Infrastructure ................................................................................34
Cost of doing business ..................................................................9
Currency stability............................................................................5
Banking system stability................................................................1
Risk of sovereign debt crisis ........................................................6
Size index .......................................................................................37
Efficiency index.............................................................................10
Financial information disclosure................................................43
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
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
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
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
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
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
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
2nd pillar: Business environment ...............................................2
5.9
Human capital .................................................................................4
Taxes.................................................................................................7
Infrastructure ................................................................................14
Cost of doing business ..................................................................1
Currency stability........................................................................n/a
Banking system stability................................................................5
Risk of sovereign debt crisis ......................................................21
Size index .......................................................................................11
Efficiency index...............................................................................1
Financial information disclosure................................................33
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................27
4.7
Human capital ...............................................................................37
Taxes...............................................................................................31
Infrastructure ................................................................................28
Cost of doing business ................................................................22
Currency stability..........................................................................20
Banking system stability..............................................................21
Risk of sovereign debt crisis ......................................................19
Size index .......................................................................................40
Efficiency index.............................................................................20
Financial information disclosure................................................30
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................45
3.9
Human capital ...............................................................................52
Taxes...............................................................................................36
Infrastructure ................................................................................49
Cost of doing business ................................................................37
Currency stability..........................................................................34
Banking system stability..............................................................15
Risk of sovereign debt crisis ......................................................37
Size index .......................................................................................29
Efficiency index.............................................................................31
Financial information disclosure................................................28
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
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
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
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
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
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
2nd pillar: Business environment .............................................23
4.9
Human capital ...............................................................................23
Taxes...............................................................................................21
Infrastructure ................................................................................20
Cost of doing business ................................................................43
Currency stability..........................................................................46
Banking system stability..............................................................44
Risk of sovereign debt crisis ......................................................31
Size index .........................................................................................5
Efficiency index...............................................................................8
Financial information disclosure................................................20
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
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
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
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
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
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
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
2nd pillar: Business environment ...............................................1
6.0
Human capital .................................................................................2
Taxes.................................................................................................4
Infrastructure ..................................................................................3
Cost of doing business ................................................................13
Currency stability..........................................................................32
Banking system stability..............................................................43
Risk of sovereign debt crisis ........................................................5
Size index .......................................................................................13
Efficiency index...............................................................................7
Financial information disclosure..................................................3
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
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
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
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
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
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
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
2nd pillar: Business environment ...............................................5
5.8
Human capital .................................................................................3
Taxes...............................................................................................15
Infrastructure ..................................................................................5
Cost of doing business ................................................................12
Currency stability..........................................................................13
Banking system stability................................................................7
Risk of sovereign debt crisis ........................................................2
Size index .........................................................................................7
Efficiency index.............................................................................23
Financial information disclosure................................................42
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................37
4.3
Human capital ...............................................................................34
Taxes...............................................................................................32
Infrastructure ................................................................................38
Cost of doing business ................................................................38
Currency stability............................................................................8
Banking system stability..............................................................40
Risk of sovereign debt crisis ......................................................32
Size index .......................................................................................22
Efficiency index.............................................................................34
Financial information disclosure................................................37
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
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
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
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
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
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
2nd pillar: Business environment .............................................29
4.6
Human capital ...............................................................................47
Taxes...............................................................................................22
Infrastructure ................................................................................27
Cost of doing business ................................................................23
Currency stability..........................................................................48
Banking system stability..............................................................22
Risk of sovereign debt crisis ......................................................50
Size index .......................................................................................45
Efficiency index.............................................................................36
Financial information disclosure................................................25
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................44
3.9
Human capital ...............................................................................31
Taxes...............................................................................................50
Infrastructure ................................................................................39
Cost of doing business ................................................................47
Currency stability..........................................................................49
Banking system stability..............................................................32
Risk of sovereign debt crisis ......................................................56
Size index .....................................................................................n/a
Efficiency index.............................................................................52
Financial information disclosure................................................53
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................21
5.1
Human capital ...............................................................................22
Taxes.................................................................................................3
Infrastructure ................................................................................25
Cost of doing business ................................................................39
Currency stability........................................................................n/a
Banking system stability................................................................4
Risk of sovereign debt crisis ......................................................29
Size index .....................................................................................n/a
Efficiency index.............................................................................24
Financial information disclosure................................................41
Foreign exchange markets........................................................n/a
Derivatives markets....................................................................n/a
Equity market development ........................................................29
Bond market development ........................................................n/a
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................15
5.4
Human capital ...............................................................................13
Taxes...............................................................................................29
Infrastructure ..................................................................................9
Cost of doing business ..................................................................8
Currency stability..........................................................................45
Banking system stability..............................................................54
Risk of sovereign debt crisis ......................................................20
Size index .........................................................................................1
Efficiency index.............................................................................26
Financial information disclosure..................................................3
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................17
5.4
Human capital .................................................................................6
Taxes...............................................................................................44
Infrastructure ................................................................................15
Cost of doing business ..................................................................4
Currency stability..........................................................................41
Banking system stability..............................................................52
Risk of sovereign debt crisis ........................................................4
Size index .......................................................................................19
Efficiency index.............................................................................38
Financial information disclosure..................................................3
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................55
3.1
Human capital ...............................................................................41
Taxes...............................................................................................56
Infrastructure ................................................................................51
Cost of doing business ................................................................53
Currency stability............................................................................3
Banking system stability..............................................................30
Risk of sovereign debt crisis ......................................................55
Size index .......................................................................................51
Efficiency index.............................................................................42
Financial information disclosure................................................56
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
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
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
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
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
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
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
2nd pillar: Business environment .............................................51
3.5
Human capital ...............................................................................53
Taxes...............................................................................................55
Infrastructure ................................................................................36
Cost of doing business ................................................................49
Currency stability..........................................................................38
Banking system stability..............................................................31
Risk of sovereign debt crisis ......................................................47
Size index .......................................................................................24
Efficiency index.............................................................................35
Financial information disclosure................................................38
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
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
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
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
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
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
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.
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.
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.
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
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
Change in real effective exchange rate (REER) ............326
External vulnerability indicator ......................................326
Current account balance to GDP ..................................327
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
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
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
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
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) borrowers’
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
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] | 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
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
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
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
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] | 2009–10
weighted average
How would you rate the protection of property rights, including
financial assets, in your country? [1 = very weak; 7 = very strong] |
2009–10 weighted average
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] | 2009–10 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] | 2009–10 weighted average
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] | 2009–10
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
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] | 2009–10 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
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] |
2009–10 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] | 2009–10
weighted average
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] | 2009–10 weighted average
This variable is the gross tertiary enrollment rate | 2007 or most
recent available
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] | 2009–10 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] |
2009–10 weighted average
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
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
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
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
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
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
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
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
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
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 |
2007–09
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 | 2007–09
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
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 | 2007–09
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 | 2007–09
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 | 2007–09
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 |
2007–09
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
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] |
2009–10 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] | 2009–10 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
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] | 2009–10 weighted average
Raising money by issuing shares on the stock market in your country
is [1 = impossible; 7 = very easy] | 2009–10 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
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) borrowers’
penetration rate
This is the total number of borrowers from microfinance institutions
(MFIs) as a percentage of country’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
Bank’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 Bank’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 subscriber’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
6.08 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.
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
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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
382
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
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
383
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 country’s financial system are most important and with the ability to
empirically calibrate this view relative to other countries.