Publication

This paper identifies and discusses the conditions needed for achieving strong and stable capital markets in emerging economies, which it says are illiquid and underdeveloped. The author groups these conditions into four pillars 1) macroeconomic stability, 2) sound banking systems, 3) high institutional quality, and 4) an adequate regulatory and supervisory framework. She argues that these functions are interdependent, complementary and equally important, and therefore failure to strengthen any of them will weaken all of them.