|
|
|
|
|
|
|
|
|
|
  |
 |
  |
Financial Markets Development
August 1988
>> This Is USAID >> USAID Policy Papers >> Financial Markets Development Effective financial markets are indispensable to the pursuit of sustained, broad-based economic growth. * Unfortunately, financial markets development is one of the most complex areas in the development field. Policy perspectives differ, often sharply, and the costs of establishing and implementing poor policies are high. I. Introduction
The purposes of this policy paper are to (1) describe USAID's policy on financial markets development, and (2) provide guidance on the development of USAID's programs and projects in financial markets. ** USAID should promote a system of financial markets that is integrated and relative undistorted, one that relies heavily on competitive financial institutions, and on policies to facilitate competition. This system should be capable of effectively mobilizing private savings, allocating that savings to investments yielding maximum returns, and maximizing the participation of the general populace.
* A financial system is composed of many financial markets, each offering different types of financial services, serving different sets of customers, and operating in particular geographic areas. Markets can be classified as involving debt instruments, equity instruments, or foreign exchange (or some hybrid involving more than one of these, e.g., letters of credit). The policy approaches and principles described in this policy paper are applicable to the development of all financial markets.
[return to text]** The policy guidance presented in this paper apply to the use of all USAID resources (DA, ESF, PL 480, U.S.-owned local currency) and, when practicable, host country-owned local currency. References to forms of USAID activities (such as "project" and "program") are used interchangeably in this policy paper. The policies presented in this document should be applied in concert with those in the USAID policy papers on Private Enterprise Development (revised March 1985) and Pricing, Subsidies, and Related Policies in Food and Agriculture (November 1982); the Guidelines on Terms of Aid (revised October 1985); and the guidance contained in cables 1986 STATE 259310 and 259314 on the private enterprise local currency lending program described in sections 106 and 108 of the Food Security Act of 1985. Additional guidance on the Housing Guaranty Program is provided in the Shelter Policy Paper (February 1985).
[return to text]
 |
|||
Last Updated on: July 11, 2001 |
