FOREWORD: The benefits and costs of financial market liberalization

摘要

The last two decades have seen many emerging economies liberalizing their financial markets, and in particular, their equity markets. Encouraged by the liberal policies of the respective governments, domestic companies have progressively accessed their stock markets for investment capital and foreign investors have enthusiastically participated in these markets as part of the strategy for international diversification of their investment portfolio. The result has been large increases both in the turnover and market capitalization of the stock markets in these emerging economies. The operational efficiency of the stock markets has increased, the cost of capital has decreased and efficiency of the banking system, the main provider of debt capital in emerging economies, has improved via competition. In general, it is believed that financial liberalization has had a positive effect on output, employment and other macroeconomic indicators of these countries.