Crises, Defaults and Controls Essay Example | Topics and Well Written Essays - 1250 words

Crises, Defaults and Controls - Essay Example Discussions in previous chapters to this paper reveal the sorry state of affairs with regard to the reforms made and the results gained and also in relation to other markets. There had been insignificant growth in domestic capital markets of various economies from early 1990s in comparison to that in industrialized economies. Some economies actually experienced deterioration in their capital markets. There has been a decrease in liquidity and listing in capital markets of many developing countries as firms cross-list and raise capital in financial centres internationally such as in London and New York. Stock markets remain segmented and highly illiquid, with capitalization and trading focused on few stocks. This chapter focuses on the more normative and puzzling part of the observation, which is motivating. This happens to be the question; what should be done on the reform agenda on capital markets going forward? To get the answers to this question, the study looks into what went wrong with all the reforms made before trying to look at what needs to be done moving forward. Three typological views are presented that shed light into perspectives that lead to different diagnoses plus policy recommendations. These views have messages summarized as (a) Get the right sequence (b) Observe patience and redouble effort and (c) Revisit fundamental issues and look into expectations Observe patience and redouble effort. This view provides that important elements of the reform package for capital markets are well known. According to this view, (a) Reforms are required to improve an enabling environment for the capital markets. (b) The reforms should have measures in place for efficiency enhancement and discipline in the market through completion. (c) Reforms in some areas have the important complementary role. (d) There is need for more specialized and technical reforms for enhancing capital market integrity and transparency. It is further noted that many of the