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GINNA FERNANDA ROMERO GARCIA

64131081

Emerging Capital Markets and Globalization


THE LATIN AMERICAN EXPERIENCE
Whither Capital Market Development?
In the 90s many economists and politicians had great prospects of market development in
emerging countries particularly in Latin America, however the reality is different because
markets are illiquid by the growing number of companies that have contributed and have
content international capital financial centers. On the other hand public debt is shifting to
corporate bond markets in many countries.
Internationalization
Use of international financial intermediaries and markets issuers and investors of local
values. Addition, globalization is an important factor because local capital markets tend to
leave forgotten the overseas market.
International participation can become an important factor in the local market as this sends
positive signals to investors to invest in domestic markets.
Evolution and globalization of capital markets
Local capital markets have influenced the conception of international capital markets, likewise
as local markets and events on the changes that occur in international markets influence.
This describes first major developments in international capital markets and then describes
how Latin American countries have responded to these events worldwide.

Main Developments in International Capital Markets

Developed countries are those with a greater advance in development. It can be said that
many of the international markets most important capital of the world are the countries
belonging to what is known as the G-8 that over time have shown an increase in their
financial markets by issuing bonds and actions.
Capital flows from rich countries, where the economies of developed countries was the only
beneficiary, which has led in certain cities like London, Tokyo, New York and Frankfurt the
most important capital flows focus of the world. Different forces have fostered the recent
development of the capital market and financial globalization. These forces are: government
policies, technological and financial innovation, and factors of demand and supply.

Developing Countries and the Globalization Process

The other hand there not only developed countries have benefited from the changes in
financial markets, but also global trends have affected developing countries in at least two
ways. First the financial markets of other countries have made available to the other countries
in order to attract their domestic markets to international level and secondly the economies of
developing countries have used the methods used capital markets that characterized
developed economies by reforming their local markets.

GINNA FERNANDA ROMERO GARCIA


64131081

Main Developments in Domestic Capital Markets


In Latin America national markets have fallen behind due to high dollarization, as well as lack
of liquidity. We also have that bond markets are a boost for domestic markets. Bond markets
in Latin America are short-term.
Some markets have gone gaining strength over time, as are the derivatives market mainly
adopted by Latin American countries such as Chile, Mexico, Colombia, among others. On the
other hand we have the market for structured financial transactions, remains a method used
in developing countries, taken mainly by Brazil and Mexico.
Factors behind the Development and Internationalization of Capital Markets
What are the driving factors behind the processes of domestic capital market development
and internationalization?
1)
2)
3)
4)
5)

To analyze across the country.


To understand macroeconomic and institutional factors example economic stability.
Get an economic development
Development of stocks and bonds
Since the capital markets have evolved through the reforms that the respective
governments have proposed.

On the other hand promote the development of domestic capital market however some
countries have not been developed due to lack of reforms.
The fundamentals that drive the internationalization of securities markets are analyzed.
Policy Implications
Stock markets in emerging economies, especially in Latin America, it is disappointing despite
the reforms introduced two decades ago. Addition in emerging capital markets remain
underdeveloped, other countries experienced deterioration in their capital markets finally
about Latin America the result is discouraging because capital markets are lower than
expected.
Conclusions
1.
2.
3.
4.

Capital markets are analyzed in emerging economies particularly in Latin America.


It must analyze the National capital markets hand of globalization.
The capital market and internationalization are closely related.
The use of international markets has negative and positive effects on domestic
markets.

Positive effects

The financing obtained by companies and governments in international markets tends


to be longer than that obtained in domestic markets.
Best investment opportunities with the National Investors in international markets.

Negative effects

GINNA FERNANDA ROMERO GARCIA


64131081

The list of big business in international markets can have a negative impact on the
negotiations of the domestic market.
The funding in international markets is volatile.