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This paper introduces the updated and expanded version of the Financial Development and Structure Database and presents recent trends in structure and development of financial institutions and markets across countries. The authors add indicators on banking structure and financial globalization. They find a deepening of both financial markets and institutions, a trend concentrated in high-income countries and more pronounced for markets than for banks. Similarly, the recent increase in cross-border lending and debt issues has been concentrated in high-income countries, while low and lower-middle income countries have experienced an increase in remittance flows. Low net interest margins, rising profitability and declining stability in high-income countries' banking sectors characterize the recent financial sector boom in high income countries leading up to the global financial crisis of 2007

Access to Finance --- Banking sectors --- Banking structure --- Banks and Banking Reform --- Bond --- Bond markets --- Debt --- Debt issues --- Debt Markets --- Deposits --- Economic Theory and Research --- Emerging Markets --- Equity markets --- Finance and Financial Sector Development --- Financial crisis --- Financial development --- Financial institutions --- Financial markets --- Financial sector development --- Financial system --- Financial systems --- Globalization --- International bank --- International bond --- International bond issues --- Macroeconomics and Economic Growth --- Private Sector Development --- Remittance

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The authors attempt to predict sovereign ratings for developing countries that do not have risk ratings from agencies such as Fitch, Moody's, and Standard and Poor's. Ratings affect capital flows to developing countries through international bond, loan, and equity markets. Sovereign rating also acts as a ceiling for the foreign currency rating of sub-sovereign borrowers. As of the end of 2006, however, only 86 developing countries have been rated by the rating agencies. Of these, 15 countries have not been rated since 2004. Nearly 70 developing countries have never been rated. The results indicate that the unrated countries are not always at the bottom of the rating spectrum. Several unrated poor countries appear to have a "B" or higher rating, in a similar range as the emerging market economies with capital market access. Drawing on the literature, the analysis presents a stylized relationship between borrowing costs and the credit rating of sovereign bonds. The launch spread rises as the credit rating deteriorates, registering a sharp rise at the investment grade threshold. Based on these findings, a case can be made in favor of helping poor countries obtain credit ratings not only for sovereign borrowing, but for sub-sovereign entities' access to international debt and equity capital. The rating model, along with the stylized relationship between spreads and ratings can be useful for securitization and other financial structures, and for leveraging official aid for improving borrowing terms in poor countries.

Access to Finance --- Bankruptcy and Resolution of Financial Distress --- Capital flows --- Debt Markets --- Developing Countries --- Economic Theory and Research --- Emerging market --- Emerging market economies --- Emerging Markets --- Equity markets --- Finance and Financial Sector Development --- Foreign currency --- International bond --- Loan --- Macroeconomics and Economic Growth --- Private Sector Development --- Sovereign rating --- Sovereign Ratings

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April 2000 - Debt-equity ratios do not tend to increase after financial liberalization, but there is a shift from long-term to short-term debt. Globalization has uneven effects for firms with and without access to international capital markets. Countries with deeper domestic financial markets are less affected by financial liberalization. Schmukler and Vesperoni investigate whether integration with global markets affects the financing choices of firms from East Asia and Latin America. Using firm-level data for the 1980s and 1990s, they study how leverage ratios, the structure of debt maturity, and sources of financing change when economies are liberalized and when firms gain access to international equity and bond markets. The evidence shows that integration with world financial markets has uneven effects. On the one hand, debt maturity for the average firm shortens when countries undertake financial liberalization. On the other hand, domestic firms that actually participate in international markets get better financing opportunities and extend their debt maturity. Moreover, firms in economies with deeper domestic financial systems are affected less by financial liberalization. Finally, they show that leverage ratios increase during times of crisis. In an appendix, they analyze the previously unstudied case of Argentina, which experienced sharp financial liberalization and was hit hard by all recent global crises. This paper - a product of Macroeconomics and Growth, Development Reseach Group - is part of a larger effort in the group to understand financial development and financial integration. The authors may be contacted at sschmukler@worldbank.org or vesperon@wam.umd.edu.

Banks and Banking Reform --- Bond --- Bond Markets --- Debt --- Debt Markets --- Debt Maturity --- Debt-Equity --- Economic Development --- Emerging Economies --- Emerging Markets --- Equity --- Finance and Financial Sector Development --- Financial Liberalization --- Financial Markets --- Financial Structure --- Financial Systems --- Globalization --- International Bond --- International Financial Markets --- International Markets --- Maturity Structure --- Private Sector Development --- Share --- World Financial Markets

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GUARANTEES -- 351.82 --- LEGAL OPINIONS -- 351.82 --- INTERNATIONAL BOND ISSUES -- 351.82 --- AA / International- internationaal --- 347.730 --- 341.8 --- Conflict of laws --- -Conflict of laws --- International finance --- -340.97 --- Mc2.i --- International monetary system --- International money --- Finance --- International economic relations --- Choice of law --- Intermunicipal law --- International law, Private --- International private law --- Private international law --- Law --- Legal polycentricity --- Financiële instellingen: algemeen. --- Internationaal economisch recht. --- Bankruptcy --- Law and legislation --- Civil law --- 347.73 --- Security (Law) --- Suretyship and guaranty --- 347.734 --- 333.150 --- 347.731 --- Set-off and counterclaim --- Debtor and creditor --- Derivative securities --- -Payment --- Clearing of securities --- 346.077 --- Ib1.i --- Clearance of securities --- Clearing of stocks --- Settlement of securities --- Stock clearing --- Clearinghouses (Banking) --- Securities --- Banks and banking --- Payment --- Commercial law --- Extinguishment of debts --- Performance (Law) --- Balance of trade --- Derivative financial instruments --- Derivative financial products --- Derivative instruments --- Derivatives (Finance) --- Financial derivatives --- Structured notes (Securities) --- Cessio bonorum --- Insolvency --- Privileged debts --- Business failures --- Debt --- Creditor --- Contracts --- Obligations (Law) --- Credit --- Creditors' bills --- Fraudulent conveyances --- Liens --- Compensation (Civil law) --- Counterclaim --- Recoupment --- Bills of particulars --- Civil procedure --- Guaranty --- Principal and surety --- Sureties --- Surety law --- Accessory obligations --- Liability (Law) --- Comfort letters --- Delegation (Civil law) --- Subrogation --- Collateral security --- Secured transactions --- Financieel recht. Commerciele organisatie. Handelsinstellingen --- Bank- en spaarinstellingen (recht). --- Giro instellingen: algemeen. --- Wetgeving op effectenbeurzen, de goederenbeurzen en de deviezenbeurzen. Raider. --- Securities processing --- 347.740 --- 347.755 --- Asset-backed financing --- -Debtor and creditor --- Subordination agreements (Finance) --- 346.07 --- Ed4.g --- Bank loans --- Priorities of claims and liens --- Asset-backed securities --- Asset-based financing --- Asset securitization --- Securitization, Asset --- Corporations --- Covered bonds --- Juridische instrumenten van het krediet: algemeenheden. --- Leningcontract. Commerciële lening. Rente. Bankdeposito's. --- Commercial loans --- -Securities --- -Bonds --- -Suretyship and guaranty --- 343.032 --- Hc2.g --- Bond issues --- Debentures --- Negotiable instruments --- Debts, Public --- Stocks --- Commercial lending --- Loans, Commercial --- Loans --- Blue sky laws --- Capitalization (Finance) --- Investment securities --- Portfolio --- Scrip --- Securities law --- Underwriting --- Investments --- Investment banking --- 346.072 --- -AA / International- internationaal --- 347.736 --- -340.978 --- wetgeving i.v.m. faillissementen. Uitstel van betaling. --- 333.600 --- -346.092 --- Jb1.g --- Financiële markten. Kapitaalmarkten (algemeenheden). --- 347.73 Financieel recht. Commerciele organisatie. Handelsinstellingen --- Financiële instellingen: algemeen --- Bank- en spaarinstellingen (recht) --- Giro instellingen: algemeen --- Wetgeving op effectenbeurzen, de goederenbeurzen en de deviezenbeurzen. Raider --- Financiële markten. Kapitaalmarkten (algemeenheden) --- Internationaal economisch recht --- Juridische instrumenten van het krediet: algemeenheden --- Leningcontract. Commerciële lening. Rente. Bankdeposito's --- wetgeving i.v.m. faillissementen. Uitstel van betaling --- -Law and legislation --- -Bankruptcy